Scottish Court of Session Decisions

This was an action raised by William Barr, contractor, against the Commissioners of the Burgh of Queensferry, concluding for payment of £900.

The pursuer's case was that he had contracted with the defenders to execute the mason, brick, and plaster-work of certain swimming-baths which they proposed to erect, and that the contract price was £1531. He had executed work to the amount of at least £1200, receiving payment to account of £550, when the defenders' architect, professing to be dissatisfied with the work done, took the remainder of the plaster-work out of his hands. This, the pursuer maintained, was a breach of contract. (Cond. 5) “By said breach of contract on the part of the defenders the pursuer has sustained loss and damage to the extent of at least £200.” Payment of the balance of the amount due for work done had been refused.

The defenders founded upon a provision in their contract with the pursuer to the effect that in the event of any difference arising with respect to the execution of the work, “the parties shall refer and submit such differences to the determination of” the defenders' architect. They averred that many important questions with regard to the character of the work executed fell to be determined by their architect, who had meanwhile declined to certify any sums due to the pursuer. They denied breach of contract, and averred facts and circumstances tending to show that it was the pursuer who was in breach.

The pursuer pleaded—“(1) The sums sued for being addebted and resting-owing by the defenders to the pursuer, decree should be granted as concluded for, with expenses. (2) The defenders having by their actings condescended on broken their contract with the pursuer, are bound to make reparation to the pursuer for the damage he has thereby sustained.”

The defenders pleaded—“(2) The action being barred by the arbitration clause in the contract, ought to be dismissed, or at all events sisted until the arbiter has determined the matters in dispute between the parties.”

On 22nd December 1898 the Lord Ordinary ( Low) allowed the parties a proof of their respective averments, “under reservation of any question which may arise during the course of the inquiry, falling within the scope of the reference contained in the contract” between the pursuer and the defenders.

Opinion.—… “I think that it is plain that that clause does not empower the arbiter to assess damages for breach of contract, and accordingly that part of the action is not excluded by the reference.

The question of the ascertainment of the balance, if any, still due to the pursuer for the work which he has done is attended with more difficulty. The defenders argued that in order to ascertain the balance a number of questions required to be determined, which under the contract fell to be decided by the arbiter, such as the question whether there had been undue delay in executing the work whereby penalties had been incurred.

Now, the clause of reference in this case is to Mr Henry, not as architect, but as an individual, whom failing, to an arbiter to be appointed by the Sheriff. That is a proper clause of reference, and not a mere executorial clause in the sense of being only a provision for the speedy settlement, during the course of the work, of questions naturally falling within the province of the architect for the time.

I do not think, however, that the clause applies to the existing state of matters.

Page: 449↓

The pursuer's averment is that the defenders unwarrantably took a material part of the contract out of his hands, and that the defenders having thereby broken their contract, he, as he was entitled to do, declined to proceed further with the contract. Of course the contract did not contemplate and did not provide for such a position of matters, and I am therefore of opinion that the claim is not excluded by the reference clause. In arriving at that conclusion, I have, I think, followed the principles laid down in the following authorities:— M'Cord, 24 D. 75; Tough v. Dumbarton Water-works Commissioners, 11 Macph. 236; Mackay v. Parochial Board of Barry, 10 R. 1046; M'Alpine v. Lanarkshire Railway Company, 17 R. 113.

I shall therefore allow a proof, but it may be that in the course of the inquiry questions may arise which are within the scope of the reference clause, and which would fall to be remitted to the arbiter. The proof therefore will be without prejudice to the right of parties to have such questions, if they should arise, disposed of by the arbiter.”

The defenders reclaimed, and argued—The Lord Ordinary had taken a wrong course. There were two grounds on which the pursuer had based his action. One was the debt owing to him under the contract, and the other was breach of contract. That was how the total of £900 which he now sued for was arrived at. But the decision of the claim of damages for breach of contract depended in all likelihood upon the decision of certain questions as to the work executed which fell within the arbitration clause of the contract. The course taken by the Lord Ordinary was plainly inconvenient, for the proof allowed by him would almost certainly have to be interrupted in order that parties might proceed to the arbiter for his decision. The proper course would have been to sist the cause. Authority referred to:— Wilson & M'Farlane v. Stewart & Company, February 24, 1898, 25 R. 655.

The pursuer argued that the course taken by the Lord Ordinary was right, and presented no practical inconvenience. He founded on Tough v. Dumbarton Water-works Commissioners. December 20, 1892, 11 Macph. 236; Kirkwood v. Morrison. November 6, 1877, 5 R. 79; Savile Street Foundry Company v. Rothesay Tramways Company, March 20, 1883, 10 R. 821; and M'Alpine v. Lanarkshire & Ayrshire Railway Company, November 26, 1889, 17 R. 113, per L. P. Inglis, 121.