Scottish Court of Session Decisions

In 1896 Messrs Wilson & Macfarlane, plasterers, Glasgow, contracted to do the plaster-work of certain tenements which were being erected by Messrs Stewart & Co., builders, Glasgow. These were to be charged for at schedule rates, and to be paid for by instalments. The contract contained a reference clause by which it was provided—“Should any disputes or differences of opinion arise on any matter connected with the contract or the execution of the work, the same shall be and hereby are referred to the decision of Mr John Sim, clerk of works, whose award shall be final and binding on all parties without appeal. An action was raised by Messrs Wilson & Macfarlane against Messrs Stewart & Co., in which they claimed payment of a sum of £460 for work done under the contract at schedule rates. They amended their record by stating the claim alternatively as a claim of damages through the defenders' breach of contract.

The pursuers averred that in April 1897 they withdrew their men and Drought the contract to an end owing to the defenders' failure to observe their part, and in

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particular to pay the stipulated instalments. The defenders averred that the work had not been done in terms of the contract.

They pleaded—“(4) The present action is excluded by the reference clause in the contract.”

The Lord Ordinary ( Pearson) on 3rd February 1898 allowed parties a proof before answer.

Opinion.—“In 1896 the pursuers contracted to do the plaster-work of certain tenements in Glasgow which were being erected by the defenders. The work was to be charged for at schedule rates, and to be paid for by instalments.

The pursuers allege that in April 1897 they withdrew their men, and brought the contract to an end, owing to the defenders' failure to observe their part of the contract, and in particular to pay the stipulated instalments.

The pursuers claim as due to them a sum of £460. As originally stated, the claim was for work done by the pursuers under the contracts at schedule rates, including materials on the ground, the work being, however, subject to measurement in terms of the contract. The claim was for £700, less £240 paid to account as under the contract, leaving £460 due.

The pursuers have now been allowed to amend the record by stating their claim alternatively as a claim of damages through the defenders' breach of contract.

The defenders, on the other hand, justify their refusal to make further payments, alleging that the pursuers were themselves in breach of their contract, and have involved the defenders in damages far exceeding the sum sued for.

The defenders plead that the action is excluded by a reference clause in the contract, which provided that should any disputes or differences of opinion arise on any matter connected with the contract or the execution of the work, they should be referred to Mr John Sim, clerk of works. I do not think that all the questions now raised between the parties fall under this reference clause. It was urged that at all events some of them might do so, but if it should so turn out, this may be worked out by allowing the parties an opportunity of obtaining the arbiter's judgment upon them when the time comes.

In these circumstances I think the case must go to proof, and the defenders' position both on that plea and on the other parts of the case will be sufficiently safeguarded if the proof is before answer.

The defenders criticised the pursuers' new alternative case on damages as being not a real alternative but only another way of putting his case for work done under the contract.

The figure remains the same; and the pursuers do not disclose their case as to the proper measure of damages. I have sometimes thought it would be an improvement if our rules of pleading were made more strict in that particular. But if the circumstances infer loss and damage, I think that according to our practice it is sufficient to make a general averment as to the amount of it.”

The defender reclaimed, and argued that the pursuer not having any relevant claim of damages, the only real question was whether there was anything due to them for work done. Accordingly the case should be sisted till the arbiter's decision on this point, which clearly fell under the arbitration clause, had been obtained, and even if the pursuers had any claim in respect of damages, it would in no way be affected.

It was suggested by the Court in the course of the argument that the defenders' fourth plea was not an appropriate one on which to found this contention. The defenders submitted that it was the practice of the Court to use such a plea for the purpose of limiting the action in the manner proposed, but in deference to the views of the Court added the following plea—“(5) In respect that the question raised in condescendence 9 and answer 9, relative to the quantity and quality of the work done by the pursuers, falls to be determined by John Sim, the arbiter named in the contracts founded on, the action ought to be sisted pending the decision of that question.”