Scottish Court of Session Decisions

The Waterworks Clauses Act 1847 enacts as follows (section 22):—“Except where otherwise provided for by agreement between the undertakers and other parties, if the owner, lessee, or occupier of any mines or minerals lying under the reservoirs or buildings belonging to the undertakers, or under any of their pipes or works which shall be underground,… be desirous of working the same, such owner, lessee, or occupier shall give the undertakers notice of his intention to do so thirty days before the commencement of working, and upon the receipt of such notice it shall be lawful for the undertakers to cause such mines to be inspected by any person appointed by them for the purpose, and if it appears to the undertakers that the working of such mines or minerals is likely to damage the said works, and if they be willing to make compensation for such mines to such owner, lessee, or occupier thereof, then he shall not work the same, and if the undertakers and such owners do not agree as to the amount of such compensation, the same shall be settled as in other cases of disputed compensation.”

The facts in this case are fully stated in the reports of the preceding cases referred to above. The following summary of them is sufficient for the purposes of the present report.

The Clippens Oil Company were the proprietors of a mineral field at Straiton, Mid-Lothian, and owners of the adjoining mineral field of Pentland, through which two pipes belonging to the Edinburgh Water Trustees were laid. One of these, carrying water from the Crawley district, and known as the Crawley pipe, was laid in 1821 under powers contained in a Statute of 1819, the other carrying water from the Moorfoot district, and known as the Moorfoot pipe, was laid in 1877. So far as laid through the mineral fields belonging to and leased by the Clippens Oil Company, the pipes, though a few feet apart from each other, were laid in the same track. At various periods from and after 1882 the Clippens Oil Company gave notice, in terms of section 22 of the Waterworks Clauses Act 1847 (quoted supra) that they proposed to work their minerals in the vicinity of and under the pipe-track. The last of these notices was dated 8th January 1897.

In March 1897 the Water Trustees presented a note of suspension and interdict against the Clippens Oil Company, praying that the latter should be interdicted from working their minerals within 40 yards of the said pipes. After certain procedure the First Division, by interlocutor dated 3rd February 1898, refused the note.

On 17th February 1898 the Water Trustees served a notice on the Clippens Oil Company, which, after narrating the notices received from the company, proceeded as follows:—“Now therefore we. the said Edinburgh and District Water Trustees, in pursuance of the provisions of the said Waterworks Clauses Act 1847 and Acts incorporated therewith, hereby give you notice that it appears to us that the working of the mines or minerals hereinafter mentioned is likely to damage our said pipe-track or line of pipes, and that we are willing to make compensation therefor in so far as you are entitled thereto, and for all loss or damage occasioned to you by the non-working thereof, and to treat with you for the payment of such compensation, and we hereby require you to leave the said mines or minerals unworked”—(Here followed a specification of the particular minerals referred to)—“Declaring that the foregoing notice is given without prejudice and under reservation of all our answers and objections to the said notices served on us by or on behalf of you or your predecessors, and of all objections to your working out the said minerals competent to us, and of our right of support of the Crawley pipes passing through said mineral field.”

In consequence of this notice the Clippens Oil Company discontinued their workings.

On 21st May 1898 and 11th June 1898 notices in similar terms to that of 17th February were served by the Water Trustees upon the Clippens Company with reference to the freestone in the vicinity of the said pipes.

As the parties were unable to agree as to the amount of compensation to be paid in respect of the minerals, arbiters were appointed, and Mr Andrew Jameson, Q.C., was appointed oversman. The Water Trustees' nominations contained reservations similar to the reservations in their notices. Their claim to a right of support for the Crawley pipe and the fact that they had brought an action to have it declared were brought to the notice of the arbiters and oversman. They pleaded that the arbitration proceedings should be sisted until a decision had been obtained in that action. On 11th November 1898 the oversman issued two decrees-arhitral, whereby he fixed the amount of compensation to be paid by the Water Trustees at £8079 for the minerals referred to in the first notice, and at £2250 for the minerals referred to in the second and third notices.

On 20th December 1898 the Clippens Oil Company brought the present action, concluding for payment of these sums.

The defenders averred that they had raised an action of declarator of their right, to support for the Crawley pipe, and pleaded, inter alia, that the action should

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be sisted pending the decision of the said action of declarator.

On 10th August 1899 the Lord Ordinary sisted the action in respect of the dependence of said action of declarator.

On a reclaiming-note the Court adhered.

In the action referred to (which is reported ante, p. 121), the Water Trustees concluded for declarator that they were entitled to have the Crawley pipe supported so that it might serve continuously as a conduit for water, and for interdict against the Clippens Oil Company working the minerals under or adjacent to the pipe so as to injure it or interfere with the flow of water. On 28th June 1900 the Lord Ordinary ( Pearson) issued an interlocutor, in which he found that within certain limits therein defined the defenders in that action were bound to abstain from working the minerals referred to in that action, and interdicted them from doing so. On a reclaiming-note the First Division, by interlocutor dated November 27th 1900, recalled this interlocutor and found that the defenders were “not entitled to work the shale, limestone, and other minerals … adjacent to or under the pipe or aqueduct belonging to the pursuers, in such manner as to injure … the said pipe or aqueduct, or to interfere with the continuous flow of water through the said pipe or aqueduct,” and granted interdict in terms of the above finding.

In their defences to the present action the defenders averred, inter alia—“It is estimated that in order that adequate support may be given to the said Crawley pipe or aqueduct it is necessary that the minerals subjacent and adjacent to it should not be worked for at least 45 yards on the south or east side of the pipe, and for at least 145 yards on the north or west side thereof. The minerals, for the non-working of which the pursuers claimed compensation in the said arbitrations, were all situated within the said limits, within which they cannot further work without depriving the Crawley pipe of the support which it has enjoyed since 1821. If the pursuers were to attempt to work out the said minerals, the result would be that the said pipe would subside and be broken, and the supply of water from the Crawley Spring to the Castlehill Reservoir would be cut off.

They pleaded, inter alia—“(2) The sums awarded in the said decrees-arbitral are not due to the pursuers, and the defenders are entitled to absolvitor, in respect (1) the defenders, under the statute in virtue of which said pipe or aqueduct was laid, and at common law, are entitled, under the circumstances above set forth, to have adequate support therefor when it passes through the lands of Pentland and Straiton, so as to receive through it a continuous and uninterrupted flow of water from the Crawley Spring to the Castlehill Reservoir. (2) The minerals for which compensation was claimed and awarded in the said arbitrations could not be worked out without causing the said pipe to subside and be broken, and the defenders therefore were not entitled to work the same, or to be compensated for leaving the same unwrought. (3) The whole of the proceedings in the said arbitration were expressly under reservation of the defenders' whole rights and pleas with regard to the pursuers' title to work the said minerals, and their right to compensation for being prevented from working them.”

On 17th July 1900 the Lord Ordinary pronounced the following interlocutor:—“The Lord Ordinary recals the sist pronounced by interlocutor of 10th August 1899, and having heard counsel and considered the cause, Finds (1) that the awards sued on were obtained, and are held by the pursuers under reservation of all objections competent to the defenders to the working out of the minerals in question, and of their right of support of the Crawley pipe passing through the mineral field; (2) that by the Lord Ordinary's judgment of 28th June 1900, in the relative action of declarator and interdict between the parties, the defenders' right to have the Crawley pipe Supported has been declared in the terms therein set forth, and in respect thereof the present pursuers have been interdicted from working the minerals within an area which is admitted at the bar to be substantially the same as the area of minerals dealt with in the awards now sued on; (3) that the pursuers, being bound to leave the said minerals unworked by reason of the defenders' rights which were reserved as above mentioned, and independently of the notices given by the defenders to the pursuers under the Waterworks Clauses Act 1847, are not entitled to enforce the said awards or either of them against the defenders: Therefore assoilzies the defenders from the conclusions of the summons, and decerns; finds the defenders entitled to expenses,” &c.

Opinion.—“I explained in a former note my reason for sisting this action hoc statu, in respect of the dependence of an action of declarator and interdict at the defenders' instance against the present pursuers. That action has now been decided by me, and my judgment is under reclaiming-note; and the first question I have to decide is, whether the sist in this action should now be recalled, or whether it should be continued until the action of declarator is finally disposed of.

This question is largely one of expediency. If the removal of the sist were to lead to a proof or to some costly or protracted procedure, the cost of which might be thrown away in the event of a different view being ultimately taken in the declarator, I should think that ought to be avoided. But there is no such proposal here on either side. The discussion on the merits of this case shews that the dispute between the parties turns on legal questions. I see no good reason why I should not now decide these, so that this case may be dealt with effectively together with the action of declarator and interdict.

The awards which are sought to be enforced in this action were pronounced in two references under the Waterworks Clauses Act 1847, which were substantially

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in the same terms, but applied to different minerals.

The defenders do not dispute that as regards the amount of compensation the awards are final. Their contention is that the awards themselves must be regarded as qualified, and that as things have turned out, the qualification bars the pursuers from obtaining decree for the sums ascertained by the awards.

The circumstances are these—the defenders have two main water-pipes running side by side through the pursuers' mineral field—the one carrying Crawley water having been laid in 1821, and the other carrying Moorfoot water in 1877. The pursuers had, on 25th November 1896, and at varioùs earlier dates, given notice to the defenders of their intention to work minerals adjacent to and under the pipetrack; and they were in course of so working when the defenders for the first time, on 17th February 1898, gave them a counter-notice, in pursuance of the Water works Clauses Act, that the working of the minerals was likely to damage their pipes, and that they were willing to make compensation to them for the same, ‘so far as you are entitled thereto,’ and requiring them to leave the said minerals unworked.

The defenders, however, had by this time discovered that while their Moorfoot pipe was regulated by the provisions of the Waterworks Clauses Act, it was open to them to plead that their Crawley pipe was in a different legal position, it having been laid under a statute of 1819, which they maintained gave them absolute right to support for the Crawley pipe. They accordingly qualified their statutory notice of 17th February 1898, not merely by stating their willingness to make compensation to the pursuers only so far as they were entitled thereto, but also by adding the following reservation—‘Declaring that the foregoing notice is given without prejudice to, and under reservation of, all our answers and objections to the said notices served on us by or on behalf of you, and your predecessors, and of all objections to your working out the said minerals competent to us, and of our right of support of the Crawley pipes passing through said mineral field.’ These expressions were repeated at length in the defenders' nomination of an arbiter, which was expressly made ‘without prejudice to, and under reservation of, all our said answers and objections, and of our said right of support, all as above mentioned.’

Two other notices and nominations relating to other strata of minerals were made and given by the defenders in May and June 1898, subject to the same qualifications and reservations as those just quoted. These became the subject of the second reference.

It is to be observed that this is not analogous to cases under the Lands Clauses Acts, where a notice to treat makes a contract which is binding on both parties, that the land included in the notice shall be taken. Under the Waterworks Clauses Acts the position of the parties is quite different. The notice is merely an inhibitory measure intended to stop the workings subject to compensation. There seems to be no reason why such a notice should not be qualified by reference to a legal claim to have the workings stopped on a different ground, without compensation.

But the pursuers contend that the defenders, in giving notice under the Waterworks Clauses Act, chose their remedy; and that they have already got the benefit of it in obtaining an immediate stoppage of the mineral workings. They point out that the qualification or reservation is in general terms, and that its conditions are capable of being satisfied consistently with working out the minerals; while under the statutory notices the mineral owners are bound to leave the minerals unworked. Thus the defenders, having themselves set the statutory machinery in motion, and having obtained thereby the benefit conferred by the statute, must pay the statutory compensation.

This contention, however, must be examined in connection with what has been done in the declarator. If that action had resulted in the defenders' right of support to the Crawley pipe being maintained otherwise than by leaving the minerals unworked, I think there would have been much force in the pursuers' argument. But I held that the Clippens Company did not in that action succeed in making out a case for substituted support, and the result is that they stand interdicted from working substantially the very minerals to which the statutory notices applied. The area is not exactly the same, but I was informed that the difference is so small that it may be disregarded.

In my opinion it follows that the qualifications under which the notices were given and the arbiters were nominated are precisely applicable to the circumstances, and that the whole proceedings in the arbitration must be held as having taken place under reservation of the question of law as to the support of the Crawley pipe. It turns out that the company were not entitled to work the minerals; that, apart from and prior to the statutory notices, they lay under an obligation of support which required the minerals to be left unworked without further payment or compensation. I therefore hold that the qualification has become absolute, and that the awards are not enforceable.

It was urged for the pursuers that, even so, this result could not receive effect on the record as it stands, and possibly not without the awards being reduced. No motion was made for an amendment of the record. But in the view I take, the record sufficiently raises the true question between the parties so far as it could be done at the date of closing the record, and in assoilzieing the defenders I shall pronounce findings which will show the ground of judgment. As to the awards themselves

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it is true that in their operative part they give decree against the present defenders in unqualified terms. But in the narrative they distinctly set forth the qualifications under which the reference proceedings were instituted. And even if they did not, I think they must be read in connection with and subject to the terms of the initiating documents (the notices and the nominations), which determine the scope of the reference. In this view the pursuers, in my opinion, hold the awards subject to the qualification that if they are bound to leave the minerals in question unworked otherwise than in pursuance of the statutory notices, then the sums ascertained by the awards shall not be exigible.”

The pursuers reclaimed, and argued—The Lord Ordinary's judgment failed to give effect to the legal character of a notice to treat under the Waterworks Act. Such a notice placed an embargo on the working of the mineral owners, and failing agreement also necessarily involved the submission of the case to an arbitrator, whose award was final on the question of compensation. If the Water Trust issued statutory notices they must submit to the statutory result. The reservation in the notices either reserved only the question of the reclaimers' title to the minerals, which was in any case reserved at common law, or it was an attempt to obtain the statutory advantage, i.e., immediate stoppage of the mineral workings without paying the statutory price, i.e., submission to an arbiter. If it meant the latter, such an attempt must fail, because the character and scope of the arbitration was not a matter of agreement between the parties, but of statutory provision. Nor were the reclaimers bound to choose between taking the notices subject to the reservation and ignoring them as not conform to statutory form. A reservation did not make a notice incompetent—Cripps on Compensation, 4th ed., p. 153; Chilworth Gunpowder Company v. Manchester Ship Canal, November 21, 1891, 8 Times L.R. 79. The effect was that the notice was good, but the reservation was only effectual if the question was one which could be reserved. The only point which could be reserved was the question of the mineral owner's title, on which the validity of the award admittedly depends— Metropolitan Board of Works v. Howard, August 7, 1889, 5 Times L.R. 732; Campbell v. Mayor and Corporation of Liverpool, February 10, 1870, L.R., 9 Eq. 579. Of that there was here no question. Anything else, such as the question how far the minerals could be worked without bringing down another pipe which the workers were bound to support, was an element in fixing the amount of compensation. That was for the arbiter to consider, and it must be assumed that he had done so. It was a question intra fines compromissi on which the arbiter was final— Dumbarton Water Commissioners v. Lord Blantyre, November 12, 1884, 12 R. 115. The reservation was useless, because it was an attempt to reserve from the consideration of the arbiter a question which he was bound to take into consideration in fixing the amount of the award. In the present case, as it happened, the reclaimers' difficulty in working their minerals was their obligation to support the Crawley pipe, which belonged to the respondents. But suppose the Crawley pipe had belonged to someone else, or the obligation had been to keep up a public road, could the respondents have alleged that their reservation entitled them to refuse to carry out the arbiter's award? Whether the respondents were or were not correct in maintaining that in English law an arbitrator under the Waterworks or similar Acts was a mere valuator, that was not law in Scotland. An arbitrator, whether under a private or a statutory reference, was entitled to consider and decide any question of law which was incidental to the decision of the question directly submitted to him, and was final thereon— Caledonian Railway Company v. Turcan, February 22, 1898, 25 R. (H. L.) 7, per Lord Watson, at p. 17.

Argued for the respondents—The case must be taken on the averment now made by the respondents, that it was impossible to work the minerals in question and yet afford that support to the Crawley pipe to which they were entitled by the interlocutor of November 27, 1900 (reported ante, p. 121). If that were so, the pursuers were asking compensation for minerals which they had no right to work. It must be held that these minerals were already paid for at the time when the Crawley pipe was laid down, and the right of support for it secured. The arbiter's award was only final as to the amount of compensation; it was not final on questions of title to the minerals, nor on the right to work them. In all the cases under similar statutory arbitrations in England it had been held that the arbiter was only a valuator, and that the question whether the party claiming the compensation had the right to the minerals and the right to work them was for the Court in an action on the award— London and Blackwall Railway Company v. Cross, 1886, 31 Ch. Div. 354; Brierly Hill Local Board v. Pearsall, 1884, 9 App. Cas. 595; London and North—Western Railway Company v. Walker and Others [1897], 1 Q.B. 921. An arbiter under the statute was in a different position from an arbiter at common law; all he was entitled to determine was how much compensation was due if it should be found that the claimants had a right to compensation at all. Secondly, the reservations in the notices sent to the pursuers were effectual, and necessarily reserved for future consideration the question of the defenders' right to support apart from the notices. There was nothing in the statute to prevent a notice being given which contained a conditional promise to pay compensation, and if so, there was no reason why the condition should not be given effect to. There was no hardship in this to the pursuers, because if they had chosen they might have declined to accept a conditional notice as a valid notice under the statute.

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Having accepted, they had no right to object to the defenders obtaining the benefit of the condition. Thirdly, even on the assumption that the question of the pursuers' right to work the minerals was a question which the arbiter was entitled to decide, it was obvious that the fact that they were otherwise bound to abstain from working the minerals in question, or nearly the whole of them, greatly affected their value, and therefore ought to have affected the compensation given for them. The arbiter had failed to take this into consideration, and his award ought therefore to be reduced.

After the hearing was concluded the defenders put in a minute in which they averred that the sums paid as compensation “were fixed by the oversman on the footing that the pursuers had an absolute right as owners to work out the said minerals, unqualified by any legal obligation not to work the same so as to injure the Crawley water-pipe.”

At advising—