Scottish Court of Session Decisions

This was an action of reduction of a decree-arbitral pronounced by Mr William M'Jannet, writer, Glasgow, as oversman in a reference under the Lands Clauses Act entered into between the Glasgow City and District Railway Company and Messrs MacGeorge, Cowan, & Galloway, writers, Glasgow.

MacGeorge, Cowan, & Galloway, the defenders, were owners of a dwelling-house in West Regent Street, Glasgow, with a bleaching-ground behind the same, used by them as their writing chambers, and the title to which was in the names of the individual partners as trustees for their firm. The house fronted West Regent Street.

The pursuers the Glasgow City and District Railway Company were empowered by their private Act (Glasgow City and District Railway Act, 45 and 46 Vict. cap. ccxvi.), inter alia, to construct a tunnel underneath certain streets in Glasgow, including West Regent Street. Section 48 of that Act provided that “if by reason of the construction of the said covered way or tunnel any structural damage shall be caused to any buildings, present or future, fronting or abutting on the streets or roads in or under which Railway No. 1 is constructed, or any buildings erected or which may hereafter be lawfully erected upon the land over or by the side of the tunnel, or to the foundations of any such buildings, the company shall make compensation therefor.” The defenders gave notice to the railway company that they claimed in respect of structural damage to their property, including depreciation in marketable value caused by pursuers' operations, the sum of £1400, and £100 for damage which they sustained as occupiers.

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The claim bore to be exclusive of all other claims competent to the claimants in virtue of the company's private Act or at common law. It reserved their right to amend or augment it in respect of all matters which should come to their knowledge after the date of intimation (10th April 1884), and for all structural and other or further damage which should accrue. As the pursuers refused to admit this claim an arbitration under the Lands Clauses Act was entered into. The arbiters nominated Mr William M'Jannet, writer, Glasgow, as oversman, and eventually after proof had been led, at which the oversman was present by arrangement of parties, the arbiters on 10th October 1884 devolved the reference on him.

On 28th October Mr M'Jannet issued a note of his proposed findings as follows:—I. “That by reason of the construction of the covered way or tunnel made by the respondents in West Regent Street, Glasgow, the claimants' property, situated at and forming No. 91 of that street, has prior to 1 st October 1884 sustained structural damage to the buildings erected on and forming part of said property, and to the foundations of such buildings, and that the claimants are entitled to be paid by the respondents, as compensation in respect thereof, as follows, viz.—(1) As owners the sum of £950 sterling; and (2) as occupiers the sum of £50 sterling.” II. “That the claimants are further entitled to be paid by the respondents the expenses incurred by them in and incident to the arbitration, and that the respondents are also liable for the expenses (including outlays) incurred to the clerk and legal assessor.”

After a representation against these findings, and answers thereto, the oversman issued a deliverance, in which he adhered to the proposed findings, as well in respect of amount as in form, and he on 17th December 1884 pronounced the decree-arbitral which it was sought by this action to reduce—“Find that by reason of the construction of the covered way or tunnel made, or in course of being made, by the respondents in West Regent Street, Glasgow, the claimants' property situated at and forming No. 91 of that street had, at the date of their notice to and claim against the respondents, dated 10 th April 1884, sustained structural damage to the buildings erected on and forming part of said property, and to the foundations of such buildings, and that the claimants are entitled to be paid by the respondents, as compensation in respect thereof, as follows— videlicet, first, the said Andrew MacGeorge, William Cowan, and Hugh Henry Galloway as trustees foresaid, as owners of the said property, the sum of £960 sterling; and second, the said MacGeorge, Cowan, & Galloway, as occupiers thereof, the sum of £50 sterling.”

The pursuers objected to the decree-arbitral as being incongruous, inconsistent and inextricable, inasmuch as it bore to be an adherence to proposed findings which fixed the date up to which structural damage had been sustained, and compensation in respect thereof due, at 1st October 1884, and at the same time in its latter part fixed the date at 10th April 1884; further, that the defenders craved £1400 in their notice and claim, and when ordered to lodge a claim on the arbitration increased it so as to claim as at 5th August 1884 £2500, and the evidence at the proof was directed to proving that claim, and indeed was brought down to 1st October 1884. They averred that in these circumstances the oversman acted wrongfully, illegally, and corruptly in fixing the date up to which he gave damages at 10th April 1884.

The defenders averred that the decree-arbitral did not exhaust the submission, because it fixed the date at 10th April 1884, while the claim and the decree applied to compensation up to 5th August 1884, and evidence was led as to the condition of the buildings down to 1st October 1884, or at all events 5th August 1884. They also stated that the arbiters took into account deterioration in marketable value and other items other than structural damage, for which there was no legal claim. They pleaded that the pursuers' averments were irrelevant.

The Lord Ordinary on 3d June 1885 found the pursuers' statements irrelevant and dismissed the action.

“ Opinion.—Three objections have been stated to the award by the oversman in this case, but only two of them were insisted on by the pursuers. The first objection was that the award by the oversman does not exhaust the submission. The award gives damages down to the 10th of April 1884, which was the date of the notice and claim made by the pursuers. It was, however, only on the 5th of August 1884 that the defenders lodged their claim in the arbitration, and the complaint against the award is that the oversman took the date of the notice and claim, and not the date when the actual paper or claim was lodged. The oversman on the 28th of October 1884 issued a note of proposed findings in which he stated that he was prepared to find that the claimants had prior to 1st October 1884 sustained structural damage to the buildings erected on and forming part of the said property—to a certain extent. According to the plain reading of this, it meant that the oversman had estimated the damage down to 1st October, but against his proposed findings there were representations given in by the parties, and the oversman altered, as he was entitled to do, his proposed findings, and gave damages, not as at 1st October 1884, but as at the date of the notice and claim on 10th April 1884. The pursuers of this action of reduction say that the damages ought to have been brought down to 5th August 1884, when the claim was actually lodged, and that they may be harassed by an additional claim at the instance of the defenders. The Lord Ordinary is of opinion that their pleas are groundless, 1st, because the proper period for claiming damage was the date of the notice of claim on 10th April 1884, and 2dly, because the 48th section of the Act, incorporating the pursuers' company, expressly provides that no claim for compensation shall be made after six months from the discovery of any structural injury to the buildings of the owner, and such six months have long expired.

The second objection, which was not pressed, and which is set forth in the 16th article of the condescendence [ i.e., that evidence had been led applying to the period down to 1st October 1884, as above stated] need not be adverted to; but the third objection is, that whereas the pursuers' Act of Parliament allows compensation to be made for structural damage—that is, damage to a house

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or building of the defenders—the oversman in awarding compensation wilfully took into account deterioration in the marketable value of the property and other items of damage other than structural damage, for all which the defenders under the recited Act have no legal claim.

Now, the award itself expressly bears that the defenders ‘sustained structural damage to the buildings erected on and forming part of said property, and to the foundations of such buildings, and that the claimants are entitled to be paid by the respondents as compensation in respect thereof,’ &c. It is now sought to contradict this statement of the oversman by evidence. The only evidence as to what passed in his mind that can be adduced is the parole evidence of the oversman himself, and such evidence is in the opinion of the Lord Ordinary wholly incompetent, as was decided by the House of Lords in the case of The Duke of Buccleuch v. Metropolitan Board of Works, 29th June 1872, L.R. 5 Eng. and Ir. Ap. 418. ‘The award,’ said Lord Cairns, ‘is a document which must speak for itself, and the evidence of the umpire is not admissible to explain or to aid, much less to attempt to contradict (if any such attempt should be made), what is to be found upon the face of that written instrument.’ And this view was given effect to in a case in the Court of Session— Rogerson and Others v. Rogerson, 31st January 1885, 12 R. 583.

The result is that the averments being irrelevant, the action must be dismissed.”

The pursuers reclaimed.

By interlocutor of 13th November 1885 the Court after argument allowed the pursuers to lodge a minute of amendment. They did so by adding a statement to Cond. 16, above referred to, setting forth that the defenders in their notice and claim of 14th April 1884 only claimed £1400, but when ordered to lodge a claim in the reference increased it by £1100, making it £2500 as at 5th August 1884, “and as the decree-arbitral now stands the defenders may make a new claim for the said £1100 or whatever damage they may allege has become apparent from and after 10th April 1884, and the evidence at the proof was directed to proving this latter claim, and indeed was brought down to 1st October 1884. In the circumstances the said oversman acted wrongfully, illegally, and corruptly in fixing the date up to which he gave damages as 10th April 1884.” The 17th article of the condescendence as amended was as follows—“Throughout the whole proceedings preliminary to and in course of the reference the question as to what kind of damage the claimants were entitled to compensation for, and what subject or elements of damage the arbiters and oversman were entitled to consider, was distinctly raised by both parties. In their original claim of 10th April 1884 the defenders claimed damages in respect of the structural damage already sustained, ‘including depreciation in the marketable value of said property,’ while in the counter notice by the pursuers, dated 2d July 1884, the pursuers ‘protest that in so far as it (the said notice and claim) demands compensation for damage, other than the structural damage provided for by the said 48th section of the said Act, it is incompetent, and we do not admit the right of you to prefer such claims, and we are not willing to pay the amount of compensation claimed by you, and will not enter into an agreement for that purpose;’ and the same protest was repeated in the pursuers' nomination of an arbiter dated 18th July 1884. Further, the defenders, in article 4 of their claim lodged in the reference on 5th August 1884, founded on and claimed damages under not only section 48 of the said special Act, but under section 6 of the Railways Clauses Consolidation (Scotland) Act 1845, which latter section the pursuers have all along maintained is excluded, except as regards the structural damage provided for by said section 48 of the special Act. The defenders in the said claim further claim damages at common law, while in their answers to the said claim pursuers plead that, so far as the defenders' claims extend beyond structural damage, they are incompetent and invalid. And in the proof taken before the said arbiters and oversman evidence was led by the defenders (the claimants) with regard to alleged damage sustained by them in connection with the property in question other than structural damage. In particular, they led evidence to show that the subjects in question would be permanently depreciated in value in ways quite unconnected with structural damage to the existing buildings, and that, inter alia, in the following ways— First, that a prospective and hypothetical purchaser would not give so good a price for the site, including therein both ground built upon and ground unbuilt on, because it had lost its good reputation, or, as stated by the witnesses and counsel for the defenders, that there was a ‘fama’ against it. Second, that such prospective and hypothetical purchaser would not give so good a price for the subjects in question with the view of developing the property by heightening the walls of the existing buildings, and otherwise adding to them; and third, the defenders, on their evidence and by their counsel, suggested other speculative grounds of damage, such as the inconvenience of having a railway under the street in front of the house. It was maintained, on the contrary, for the pursuers that all that the defenders were entitled to get was damage for injury to the structure of buildings in question as they then stood, and it was proposed to the oversman by Mr James Graham, arbiter for the defenders, that the arbiters or the oversman (in case of devolution taking place) should make two sets of findings in order that the parties might get the opinion of the Court on the point of law raised upon the statute. This was done in presence of the counsel for both parties, and both the oversman and the counsel for the defenders apparently acquiesced in the proposal. Further, in the representation made by them when the oversman had issued his proposed findings the pursuers requested the oversman to separate in his award, the different items of damage, in these terms—‘The respondents do not conceal from the oversman that in their view he, in giving effect to some extent to the opinions of these witnesses in support of that claim, has taken into consideration an element not embraced in the submission, and to give effect to which is in their judgment ultra vires, and with the view of enabling them to properly raise that question, and obtain a judicial determination upon it, they respectfully ask the oversman, should he on reconsideration adhere to the award proposed, or propose to award any sum exceeding £300, to state

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the sum to which the claimants are in his judgment entitled on the evidence for the reparation of the structural damages hitherto done, and separately the amount to which he conceives they are entitled in respect of “depreciation in market value,” or apprehension of future injuries.’ The said oversman, however, wrongfully, illegally, and corruptly refused, or at least failed, to comply with the pursuers' request, and the pursuers believe and aver that in awarding the said sum of £950 sterling he took into account and gave damages for speculative deterioration in the future marketable value of the property in question, and of the site or solum, of the said property, with reference to future and speculative operations thereon apart from the presently existing buildings, and in the site so deteriorated the said oversman computed not only the ground on which the buildings stood but a considerable extent of unbuilt-on ground behind the said buildings. The pursuers believe and aver that he also took into account the deterioration that might in his view accrue to the property from there being a railway under the street in front of it, and other items of speculative damage and amenity damage, for all which the defenders, under the terms of the recited Act, have no legal claim. The pursuers believe and aver that the greater part of the said sum of £950 was really awarded in respect of claims which it was incompetent and illegal for the oversman to take into consideration under the said special Act, but notwithstanding that the said sum was awarded in respect of such claims the said oversman falsely, corruptly, and illegally set forth in the said decreet-arbitral that it was awarded in respect of ‘structural damage to the buildings erected on and forming part of said property, and to the foundation of such buildings.’ In proceeding as aforesaid the said oversman acted illegally and corruptly in the sense of the Act of Regulations 1695. In the circumstances above stated the present action of reduction is necessary.”

The defenders' 2d, 3d, and 5th pleas on the record as amended were—“(2) The pursuers statements so far as material being unfounded in fact, the defenders should be assoilzied. (3) The objections to the decree-arbitral being unfounded, and the said decree-arbitral being in every respect valid and final between the parties, the defenders should be assoilzied. (5) The arbiter, not having been guilty of legal corruption, and the decree-arbitral not being ultra vires of the arbiter or ultra fines compromissi, the defenders should be assoilzied.

On 4th December 1885 the Court allowed the pursuers a proof of their averments in article 17 as amended. Under this allowance of proof Mr M'Jannet, the oversman, was examined as a witness before Lord Shand. The material evidence given by him is quoted in the opinion of the Lord President.

Argued for the pursuers—The award of the oversman was wrong; he had acted ultra vires, and ultra fines compromissi. He had awarded compensation for other than structural damage, and he had never applied his mind to structural damage in the sense of the Act. His mode of calculation was to take one-fifth of the value of the subjects, including the back ground, and call that structural damage; this was clearly an erroneous method of estimating structural damage. The oversman had clearly taken a wrong view of the statute; he had felt a difficulty, and got over it by using a statutory phrase and calling the sum which he had allowed an award for structural damage.

Replied for defenders—There were two points which had to be distinguished and kept separate. (1) The kind of damage. (2) The mode of estimating the pecuniary loss to the claimant. If the arbiter had only dealt with structural damage, he could not competently be examined as to the grounds of his decision. He stated in his award (which was the proper evidence) that he only dealt with structural damage, and there was no evidence that he had acted ultra vires.