Scottish Court of Session Decisions

The Governors of George Heriot's Trust, with the approval of the Scotch Education Department, presented a petition to the Court for alteration of the scheme of administration drawn up by the Commissioners under the Educational Endowments (Scotland) Act 1882, approved of by Her Majesty in Council on 12th August 1885.

The said scheme contained the following clause (95):—“It shall be in the power of the Court of Session to alter the provisions of this scheme upon application made to them, with consent of the Scotch Education Department, by the governing body or any party interested, provided that such alteration shall not be contrary to anything contained in the Educational Endowments (Scotland) Act 1882.”

The petitioners craved, inter alia, that clause 26 of the said scheme should be deleted, and the following clause substituted therefor:—“The Governors shall have power to grant retiring allowances to any headmaster or assistant teacher or other employees in George Heriot's Hospital School, to any principal, professor, or teacher, or other employees fully and exclusively employed in the Heriot-Watt College, and to any other officials or employees of the Trust, in accordance with a scheme to be approved by the Scotch Education Department.”

In support of this alteration they averred—“The petitioners believe and aver that it would be a great advantage to them to possess this power, and that its occasional exercise would conduce to the efficient and economical management of the Trust. The teachers and officers of the Trust hold office at the pleasure of the petitioners (clauses 13, 44, 46). There are cases, however, in which old and faithful servants of the Trust have, on account of age or infirmity, become less efficient in the performance of their duties than in their younger and more vigorous years, and while dismissal in such circumstances would, in the view of the petitioners, be a hardship if not an act of cruelty, they are of opinion that it would be in the interests of the Trust that they should have power, to be exercised under the control of the Scotch Education Department, to pension off tried and faithful servants when circumstances justify it.”

Mr James A. Fleming, advocate, to whom the Court remitted to report upon the regularity of the procedure, and upon the proposed alteration of the scheme, reported that the procedure had been in all respects regular, and further reported in the following terms on the alteration in question:—“The petitioners also ask that power should be given to them to grant retiring allowances to any of their employees in accordance with a scheme which is to be approved by the Scotch Education Department. I have some doubt as to whether this addition is within your Lordships' powers, which are limited to alterations not contrary to anything contained in the Educational Endowment (Scotland) Act 1882. The petitioners have power to apply such portion of the funds as they think fit in the maintenance and upkeep of the Hospital School (section 37) and the Heriot-Watt College (section 57), and to determine the salaries of the teaching staff and the mode of payment of these salaries (sections 48 and 68). So far as the proposal affects new appointments, and is for the purpose of getting better officers for the same salary, or as good officers for a lower salary, it would seem to be a very slight extension of the petitioners' existing powers, and one that might reasonably be given in express terms. But when the purpose, as stated in the petition, is to make a voluntary allowance so as to secure the retiral of aged and infirm servants who have presumably all along been paid a

Page: 97↓

sufficient salary, an objection might be taken to such an application of the Trust funds as inconsistent with the objects of the Trust and with the provisions of the Act. As regards pensions, the Act provides (section 13) that compensation shall be made for the vested interests of any individual holding any pension at the date of the Act, but (section 14) that any such interest acquired after the passing of the Act should be subject to the provisions of the scheme framed under the Act. Section 18, which deals with the tenure of office of officers in the employment of the governing body, gives no power to permit retiring allowances, and there is no case, so far as I have been able to learn, of a scheme framed under the Act containing such a power. Further, the Act provides (section 15) that the Trust funds shall continue to be applied for the educational benefit of the class favoured by the founder. Should, however, your Lordships be of opinion that this addition is not contrary to anything contained in the Act, I would humbly report that I think it would be for the advantage of the Trust, and would tend to its more efficient, and possibly more economical, management were such a power to be granted. At the same time, I would respectfully suggest that the section should be limited so that the pensions should be on no higher scale than those provided for permanent civil servants by the Superannuation Acts 1834 to 1892.”

The Educational Endowments (Scotland) Act 1882 (45 and 46 Vict. cap. 59), sec. 14, enacts—“Every interest, right, privilege, or preference which any person may acquire after the passing of this Act, in or relative to any educational endowment … or in or relative to any office, place, employment, pension, compensation allowance, bursary, or emolument in the gift of any such governing body, shall be subject to the provisions of any scheme made under this Act.”

The petitioners argued that the proposed alteration was not contrary to anything contained in the Act of 1882, and that the application of the Governors of Dollar Institution, November 28, 1890, 18 R. 174, had been refused because the proposal there was, not to institute a general pension scheme, but to make payments to certain named persons.

At advising—