Scottish Court of Session Decisions

This was an appeal from an order of the Railway and Canal Commissioners at the instance of Alexander Cowan & Sons, Limited, papermakers, Penicuik, applicants and appellants, against the North British Railway Company, respondents.

The following statement of the facts upon which the application was founded is taken from the opinion of Sir Frederick Peel:—“Messrs Cowan are papermakers carrying on business in the Penicuik district, and have in connection with one of their mills a siding called Low Mill siding. This siding forms a junction with the Penicuik Railway, now North British, 22 chains north of Penicuik Station, and was constructed by Messrs Cowan on their own land and at their own expense at the same time as the Penicuik Railway, and it has been in use ever since that railway was opened in 1872. Its incoming traffic consists chiefly of coal from Arniston and other collieries, and of esparto grass and rags from Granton, Leith, and other places, and the total yearly tonnage is very considerable, that of coal alone exceeding 30,000 tons. In November 1899 Messrs Cowan claimed to have a rebate off the company's coal rate, on the ground that it included the Penicuik terminal for station accommodation, or that it did not differ in amount from the coal rate to the station, although in the one case station accommodation was provided, and in the other was not.” …

On 15th December 1899 Messrs Cowan & Sons presented this application to the Railway Commissioners, in which they averred as follows:—“(2) The applicants receive at their Low Mill siding large quantities of coal for use in their works. These coals are received from Arniston, Tranent, Carberry, Loanhead, and Whitehill on the respondents' line, and also from other places on their line. Said coal is received and unloaded by the applicants entirely on their Low Mill siding. The applicants' coal traffic is dealt with by the respondents as regards delivery thereof in exactly the same way as all the applicants' other traffic is dealt with. The applicants do not ask and do not receive any station accommodation for said coal traffic. (3) The respondents, notwithstanding that they are not required by the applicants to provide any accommodation for their coal at Penicuik Station, charge the applicants rates for coal which are of the same amount as they charge traders at Penicuik Station who receive accommodation there. (4) These rates include a charge for station terminal, and the respondents have refused and still refuse to make any allowance or rebate to the applicants in respect thereof. (5) These charges have since 31st December 1892 included a charge for station terminal at the Penicuik end of the journey, and have to that extent been illegal as against the applicants. The said charges for said station terminal, amounting as after mentioned to £2500, have been paid since 31st December 1892 under protest. (6) The applicants have suffered loss or damage by said illegal charges. The amount of coal received by them from 31st December 1892 to 30th September 1899, is 197,552 tons 19 1 2 cwt. The applicants estimate the said loss and damage in respect of said illegal charges on the above tonnage at £2500.”

The applicants applied to the Commissioners “(1) To determine what are the reasonable or just rebates to be made by the respondents from the rates charged by them to the applicants upon coal traffic passing to the private siding of the applicants, in respect that the respondents do not require and will not be required to provide station accommodation or perform terminal services. (2) For an order directing the respondents to repay the sum of £2500 to the applicants in respect of the illegal charges above mentioned. (3) Alternatively for an order directing the respondents to pay the sum of £2500 to the applicants as damages for overcharges on their coal traffic since 31st December 1892.”

The respondents lodged answers, in which they averred—“(2) It is admitted that the applicants receive coal at their Low Mill siding from Arniston, Tranent, Carberry, Loanhead (Burghlee Colliery), and Whitehill on the respondents' railway, and that for such coal the respondents charge rates of the same amount as those that are in operation to Penicuik Station. (3) It is denied that the rates for the coal in question include a charge for station terminal. These rates include the rate for conveyance, and a charge in addition for services at the colliery end, and services at the Penicuik end, including the use of the Railway Company's waggons both at the colliery sidings or branches and on the applicants' siding. The respondents make a special stop of their trains at Low Mill siding with the applicants' coal, which they are not bound to do, and for which if it is done they are entitled to be paid a reasonable sum.”

The Railway and Canal Traffic Act 1894 enacts—section 4—“Whenever merchandise is received or delivered by a railway

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company at any siding or branch railway not belonging to the company, and a dispute arises between the railway company and the consignor or consignee of such merchandise as to any allowance or rebate to be made from the rates charged to such consignor or consignee in respect that the railway company does not provide station accommodation or perform terminal services, the Railway and Canal Commissioners shall have jurisdiction to hear and determine such dispute, and to determine what, if any, is a reasonable and just allowance or rebate.”

The Railway Rates and Charges (No. 25) Order Confirmation Act 1892 enacts—section 5—that “the company may charge for the services hereunder mentioned, or any of them … a reasonable sum by way of addition to the tonnage rate. Any difference arising under this section shall be determined by an arbitrator to be appointed by the Board of Trade at the instance of either party… (1) Services rendered by the company at or in connection with sidings not belonging to the company.”

Proof was allowed and led.

The facts established, so far as not narrated supra, appear sufficiently from the judgments.

The Railway Commissioners on 6th August 1900 pronounced the following order: “Now therefore, after hearing counsel and witnesses for the applicants and for the Railway Company, this Court doth find and determine that the applicants are not entitled to a rebate or allowance off the rates charged to them by the Railway Company for the carriage of coal to the said Low Mill siding, in respect of the Railway Company not providing station accommodation for the applicants at Low Mill siding, and this Court doth therefore order that the said application be, and the same is hereby dismissed.”

Sir F. Peel—[ After stating the facts ut supra, and dealing with a different question the appeal in which is reported voce Cowan & Sons v. North British Railway Company, March 19, 1901, 3 F. 677, 38 S.L.R. p. 514]—“Messrs Cowan's other application, referred to above, is for a rebate from the rates they have been charged on coal delivered at their siding in respect that station accommodation has not been provided. This is a different issue from that with which the former case between the same parties was concerned. There it was a question under section 5 of the North British Rates and Charges Act 1892, of what it would be proper for the Railway Company to charge in addition to the tonnage rate for alleged special services at a siding not their own; here Messrs Cowan claim, under section 4 of the Traffic Act 1894, to have a deduction from their rate in consideration of their not using a station. … Now, the coal for Low Mill siding is carried from different collieries, but the Arniston colliery sends the largest quantity, and it appears that the rate from that colliery to the siding, where station accommodation is not provided, is the same as to Penicuik Station where it is provided. It also appears that the respondents revised their coal rates on the passing of their Rates and Charges Act 1892, and that the principle on which the rates were revised and made up was to charge the maximum for conveyance that their Act allows, and to add to this 2d. for terminals, or services at both ends, at or in connection with sidings not belonging to the company. More than two-thirds of their gross coal traffic being siding—to—siding traffic, it was for this traffic in particular that they fixed the rates, but the rates so fixed were also applicable to their other or siding—to—station traffic, where such description of traffic was comparatively small and unimportant. The 2d. is, they state, much below the cost of siding services, which they estimate to cost them 3d. a ton at the colliery or forwarding end, and 3 1 2d. at the delivery end, and as a separate charge the amount is low, and viewed apart from its equalling the station charge, could scarcely be disputed. But 2d. is also all that is extra to conveyance in the siding—to—station rate, and like the charge of 2d. for the services at the two ends in the siding-to-siding rate, is partly for accommodation at Penicuik Station, and partly for services at the colliery end. But the portion applicable to the station would not exceed 1d., and 1d. per ton therefore is the maximum sum available for allowance as rebate, and if the question as to a rebate turned only upon what it should be actually put at, we might, though we have no jurisdiction to determine the payment for services in connection with sidings, require to consider whether a reasonable charge for such work would not absorb a good portion of the sum to which a rebate is limited. But, on the whole, I think no sufficient ground has been shown for any rebate whatever being allowed. There is no coal delivered at the station which competes with coal consigned to Low Mill siding, and the station accommodation therefore is not an undue preference warranting a lower rate for the siding under the Traffic Act 1854. Nor is it, under the circumstances, a ground for rebate under the Act of 1894. The reason of the station and siding rates not differing in amount is that the quantity using the station is so small that the company did not think it worth while to have a rate of carriage for it differing from the siding rate. They had fixed a rate for the sidings where the coal traffic is very large, and rather than have a separate rate for a station traffic out of all proportion smaller they made the siding rate applicable to it. Messrs Cowan's coal traffic is about 97 per cent. of the whole coal traffic to Penicuik, including their own. In 1897 the tonnage to the station was 685 tons, and to Messrs Cowan's siding 30,506 tons. The small tonnage dealt with at the station has no doubt station accommodation for a rate no higher than the rate for coal carried to the siding, but for the reasons above stated I do not think that this furnishes a ground for diminishing the charge for coal to the siding or granting a rebate from it.

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Viscount Cobham—The applicants in this case, Messrs Cowan, owners of the Low Mill sidings on the North British Railway, ask that a rebate should be allowed them under section 4 of the Traffic Act of 1894 from the rates charged for coal consigned to their sidings from various collieries in the district. The onus of proving their claim lies upon them, and accordingly they bring evidence to prove that these rates, although siding-to-siding rates, include a charge for station accommodation. The fact upon which they mainly rely to establish their contention is the existence of what has been in previous cases called a comparable rate—that is to say, a rate in which there is a terminal element, but which in other respects is comparable with the rate in dispute. The Penicuik Station rate for coal quoted for comparison in this case, except in one important particular, fulfils these conditions. The traffic in respect of which it is charged is collected from the same collieries, it is conveyed practically the same distance to a station near the sidings, and except that station accommodation is provided, it has the benefit of the same services as the coal delivered at Messrs Cowan's sidings. The rates themselves are identical, and if we follow the principle laid down in Tennant's case ( 10 R. and C. Cases 194), we must assume that the station rates include some charge for the station accommodation provided. It only remained for the coal traffic at the station to bear some reasonable proportion to that at the siding, and the applicants would have established by means of this comparison a very strong presumption in support of their case. But in point of fact the coal traffic at Penicuik Station is wholly insignificant, having been between January 1893 and September 1899 about 3 per cent. of the total coal traffic at the station and siding combined, or an average of about 1000 tons in each year. The station rate has been therefore little more than a paper rate, and although it would have saved much trouble if the Railway Company had fixed different rates for the station and the sidings, I think their explanation may be accepted, that in view of the insignificance of the station coal traffic they had not thought it worth while to make any distinction. At anyrate, I cannot regard rates under which so wholly disproportionate an amount of traffic is carried as “comparable” rates for the purposes of this inquiry.

It is open, however, to the applicants to prove their claim by other evidence than that of a comparable rate. They have failed in their claim to a 2 1 2d. rebate on the proportional principle, but they say that, even assuming that the coal rates are made up of the maximum conveyance rate, and 2d. added for services at both ends (and I think that this was sufficiently proved), a rebate of 1d. should be allowed from the added 2d. The penny, they say, although this has not been admitted or I think proved, is charged for services at the Low Mill sidings, and regard being had to the decision in the previous case, this is said to be wrongly charged, and a corresponding rebate is claimed. It may be questioned whether a rebate from a rate that is above the maximum can be claimed under section 4 of the Act of 1894, but however this may be, I think it as well to say that, while giving full effect to our previous decision, and without quantifying the value of each service, I am satisfied by the evidence before us that 2d. cannot be more than the company are reasonably entitled to ask in return for what they do for the applicants' traffic, and that there is no ground for asking for any rebate from it. As regards the other points raised, and also the second application of Messrs Cowan, I entirely agree with the views of my colleagues.

Lord Stormonth Darling—I agree with my colleagues in their conclusion on the question of rebate, because I do not think that the applicants have shown any just cause for granting one, and I say so mainly because the insignificant quantity of coal delivered at Penicuik Station seems to me to deprive the rate to that station of all the importance which in ordinary circumstances would attach to it as a “comparable rate.”

Messrs Cowan & Company appealed, and argued—The respondents rendered no terminal services for which they were entitled to charge anything more than the maximum rate for conveyance. It had already been decided that the services performed by them at the siding were nothing save for conveyance, which only ended when they put the trucks on to the siding— Cowan & Sons v. North British Railway Company, January 26, 1898, 10 R. and C. Cases 169. There was nothing to distinguish coal from the other traffic dealt with by that order, it having been excluded only on a technical objection as to whether it fell within the expression “goods” used in the application. The same principle must necessarily be applied to coals— Lancashire and Yorkshire Railway Company v. Gidlow [1875], 7 E. & I. App. 517. But where something more than the maximum rate was charged, and there were no terminal services in respect of which charges could be made, the extra amount must be set down to siding services for which, as had been shown, the respondents were not entitled to charge. Terminal charges were dealt with by section 4 of the Railway and Canal Traffic Act 1894, and could not be held to apply to siding charges. (2) But in any case the Commissioners had exceeded their jurisdiction in determining that the respondents were entitled to charge for their services at the siding, for that question was one which was by statute relegated to the consideration of an arbiter appointed by the Board of Trade, and the Commissioners had no jurisdiction to decide it—Railway Rates and Charges Confirmation Act 1892, sec. 5. Alternatively it was a condition-precedent to the right of the respondents to charge for services that they should first have obtained the determination of the arbiter that the charge was reasonable. (3) It was competent to examine the Commissioners' opinions to discover their grounds of judgment,

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and if these were erroneous their order was open to review— North Eastern Railway Company v. North British Railway Company, December 17, 1897, 25 R. 333, at 346, 35 S.L.R. 282. Sir F. Peel's opinion showed that he had formed the wrong view that where there was no comparable rate a trader was not entitled to rebate. That was only one way of proving his claim. Nor was it necessary for the trader to prove affirmatively that the company were making a terminal charge— Salt Union, Limited v. North Staffordshire Railway Company, July 12, 1898, 10 R. and C. Cases 179.

Argued for the respondents—Unless the appellants could make out that they were in fact charged for station accommodation which they did not get, they were not entitled to a rebate—Railway and Canal Traffic Act 1894, sec. 4. The Commissioners had decided that there was no case for a rebate, because the appellants were in fact not so charged. That was quite a good ratio decidendi, and that was an end of the question— Salt Union Limited v. North Staffordshire Railway Company, supra. The Commissioners, however, had power to consider all questions affecting the application, and to examine the grounds for their charge alleged by the respondents. They found on doing so that the respondents were performing services at the siding which were advantageous to the appellants, and for which the appellants ought to pay, and were right in setting that off against a claim for rebate— Corporation of Birmingham, &c. v. Midland Railway Company, April 15, 1896, 9 R. and C. Cases 165. The application had been made by the appellants under section 4 of the Act of 1894, and the jurisdiction exercised by the Commissioners had been precisely in accordance with that section. They had not been asked to determine as arbitrators a difference under section 5 of the Act of 1892, and accordingly the appellants' objection to their jurisdiction was unfounded.

At advising—