Scottish Court of Session Decisions

The Workmen's Compensation Act 1897 (60 and 61 Vict. cap. 37) Sched. II, sec. 8, as made applicable to Scotland by sec. 14 ( a), provides:—“Where the amount of compensation under this Act shall have been ascertained, or any weekly payment varied, or any other matter decided under this Act, either by a committee or by an arbitrator or by agreement, a memorandum thereof shall be sent, in manner prescribed by [Act of Sederunt] by the said committee or arbitrator, or by any party interested, to the [sheriff clerk] for the district in which any person entitled to such compensation resides, who shall, subject to such [Act of Sederunt] on being satisfied as to its genuineness, record such memorandum in a special register without fee, and thereupon the said memorandum shall for all purposes be enforceable as a [Sheriff Court] judgment: Provided that the Sheriff may at any time rectify such register.”

The Act of Sederunt of 3rd June 1898, section 7 ( a), provides:—“The memorandum as to any matter decided by a committee, or by an arbitrator other than a sheriff, or by agreement, which is by paragraph 8 of the second schedule appended to the Act required to be sent to the sheriff clerk, shall be as nearly as may be in the form set forth in Schedule A appended hereto. Where such memorandum purports to be signed by or on behalf of all the parties interested, or where it purports to be a memorandum of a decision or award of a committee or of an arbitrator agreed on by the parties and to be signed, in the former case by the secretary or by at least two members of the committee, and in the latter case by the arbitrator, the sheriff clerk shall proceed to record it in the special register to be kept by him for the purpose without further proof of its genuineness. In all other cases he shall, before he records it, send a copy [for which, unless it is supplied to him along with the memorandum, he shall be allowed to charge at the rate of 1s. a sheet] to the party or parties interested (other than the party from whom he received it) in a registered letter containing a request that he may be informed within a reasonable specified time whether the memorandum and award (or agreement) set forth therein are genuine; and if within the specified time he receives no intimation that the genuineness is disputed, then he shall record the memorandum without further proof; but if the genuineness is disputed he shall send a notification of the fact to the party from whom he received the memorandum, along with an intimation that the memorandum will not be recorded without a special warrant from the Sheriff.”

On July 26, 1906, William Hughes junior, panman, 25 Inglis Street, Dennistoun, Glasgow, brought an action against the Thistle Chemical Company, Easterhouse, near Glasgow, and the individual partners thereof, with conclusions (1) for reduction of “( First) a pretended receipt granted by the pursuer in favour of the defenders the Thistle Chemical Company, dated 8th February 1905; ( Second) a pretended receipt granted by William Hughes senior, the pursuer's father, in favour of the defenders the Thistle Chemical Company, and bearing nodate; ( Third) a pretended receipt granted by Mrs Hughes, the pursuer's mother, in favour of the defenders the Thistle Chemical Company, dated 21st February 1905; and ( Fourth) a pretended memorandum of an agreement made under the Workmen's Compensation Act 1897, entered into between the defenders the Thistle Chemical Company, the partners of said company, and the pursuer, dated 3rd March 1905, and registered in the special register kept by the Sheriff Clerk of Lanarkshire at Glasgow on 6th July 1906”; and (2) for declarator “that no agreement as to compensation to be paid under the Workmen's Compensation Act 1897 by the defenders to the pursuer in respect of an accident which occurred to the pursuer while in the defenders' employment on 17th January 1905, has been concluded between the pursuer and the defenders.”

The defenders, inter alia, pleaded—“(1) The action is incompetent, in respect that the provisions of the Workmen's Compensation Act include application to the Court in reference to the subject-matter of the action. (2) Res judicata, in respect that the subject-matter of the action has been judicially decided and a final judgment pronounced thereon. (3) The pursuer's averments are irrelevant and insufficient to support the conclusions of the action.”

The facts of the case are given in the opinion ( infra) of the Lord Ordinary ( Johnston), who, on 5th December 1906, pronounced

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an interlocutor repelling the defenders' first three pleas-in-law, finding the cause unsuitable for jury trial, and therefore dispensing with the adjustment of issues, and allowing parties a proof of their averments.

Opinion.—“The pursuer William Hughes was injured on 17th January 1905, when in the employment of the defenders the Thistle Chemical Company, Glasgow. On 3rd March the defenders lodged, in terms of the 8th section of the 2nd schedule to the Workmen's Compensation Act 1897, with the Sheriff Clerk of Lanarkshire a memorandum of agreement alleged to ascertain the amount of compensation due to the pursuer under that Act, and requested that the same should be recorded. The Sheriff Clerk, in terms of the above section and of the relative Act of Sederunt, notified the pursuer, who on 6th March intimated that the genuineness of the memorandum was disputed on the ground that he had come under no agreement whatever to accept Workmen's Compensation benefits in respect of the accident to him while in the defenders' employment. The Sheriff Clerk therefore intimated to the defenders that the memorandum would not be recorded without a special warrant from the Sheriff. So far, procedure was in accordance with the statute and Act of Sederunt. Thereafter the defenders presented to the Sheriff of Lanarkshire a petition in ordinary Sheriff Court form, in which they called the present pursuer as defender, praying the Court ‘to ordain the Clerk of Court to register in the register kept in terms of the Workmen's Compensation Act 1897, in the Sheriff Court of the county of Lanark at Glasgow, the memorandum of an agreement made under said Workmen's Compensation Act 1897 between the pursuers and the defender, dated said memorandum the 3rd day of March 1905, and lodged with the Clerk of Court on said date, and to find the defender liable in expenses.’

On this petition a record was made up, debate followed, a proof was led, and generally procedure was taken before the Sheriff-Substitute, with appeals to the Sheriff, which lasted till November 1905, to all intents and purposes as if the application had been the initiation of an ordinary action for declarator—incompetent, by the way, in the Sheriff Court—that a valid agreement had been entered into. On 7th November 1905 the case was appealed to the First Division, when, following the decision of the consulted Judges in the case of Binning v. Easton & Sons, 8 Fr. 407, the appeal was found incompetent, the judgment of the Sheriff was recalled, and the matter sent back to the Sheriff-Substitute, who, in accordance with his own previous judgment to the effect that an agreement in the terms stated in the memorandum had been entered into between the present defenders and pursuer on 6th July 1906, ordered the memorandum of agreement to be recorded and it has been recorded accordingly.

The pursuer, who had, pending the above proceedings raised an action of damages against the defenders at common law and under the Employers' Liability Act on 26th July 1906, in order to clear the way for prosecuting said action of damages, raised the present action for reduction of the foresaid memorandum of agreement, and of three documents preceding it in date, upon which the Sheriff-Substitute had founded his judgment, but he also concludes in the second place for declarator—… ( quotes declarator supra) … In defence to this action of reduction and declarator the defenders plead—… ( quotes defenders' pleas 1 and 2.) …

I do not think that these pleas are well founded. After some difference of opinion between the two Divisions of the Court, it has now been authoritatively decided by the case of Binning v. Easton & Sons, supra, that the Sheriff-Substitute in ordering the memorandum in question to be recorded was acting ministerially and not judicially, and the position taken by the defenders in these pleas appears to me to be inconsistent with that judgment. The defenders are in this dilemma:—If they maintain that the Sheriff-Substitute's judgment on the application for recording is res judicata, the Sheriff-Substitute must have been acting judicially, and this the Court, in the case of Binning v. Easton & Sons, supra, have decided that he was not. If they admit, as they are bound to do by reason of that judgment, that he was acting ministerially, then there can be no res judicata.

There has been, I think, some difficulty introduced into this matter by the Act of Sederunt of 3rd June 1898, and I think it doubtful whether in some of its provisions that Act has not, ex facie at least if not in reality, gone beyond what was intended by the statute in virtue of which it was made, and which is now better understood than it was on its first enactment. Going back to the second schedule appended to the Act itself, and which must be read as part of it, it is provided by section 8 thereof, reading it short and as applied to Scotland, that where the amount of compensation under the Act has been ascertained by agreement, a memorandum thereof shall be sent in manner prescribed by Act of Sederunt by any party interested to the Sheriff Clerk of the county in which any person entitled to such compensation resides, who shall, subject to such Act of Sederunt, on being satisfied as to its genuineness, record such memorandum in a special register, ‘and thereupon the said memorandum shall for all purposes be enforceable as a Sheriff Court judgment,’ but it is added—‘provided that the Sheriff may at any time rectify such register.’ As indicated by the Lord President in the case of Binning v. Easton & Sons, supra, it is, I think, more than doubtful whether this section in its entirety, if at all, was intended to be applicable to Scotland, and whether the recording, so far as Scotland was concerned, was not intended to be provided for by section 14 ( b). But as section 8 is not among the sections of the schedule specially declared not to apply to Scotland, I must treat it as so

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applying, Taking it thus, I think that there is now no doubt that what it provides is that the Sheriff Clerk, on a memorandum of agreement being presented to him, if he is satisfied of its genuineness, shall record it, with a view to ready enforceability as fictione juris the equivalent of a Sheriff Court decree. But the Sheriff Clerk's being satisfied of its genuineness, as he is not a judge, cannot give it more than prima facie effect, or prevent its being challenged by suitable action in a competent court. Whether that might be done by action in the Sheriff Court under the proviso at the end of the 8th section—that the Sheriff may at any time rectify the register—has yet to be determined. But if it could, then the Sheriff in such proceeding would be acting judicially, and be subject to review.

Now, the Act of Sederunt, in section 7, makes much more elaborate provision with regard to the recording of memorandums of agreements. It provides, first, that where a memorandum purports to be signed by or on behalf of all the parties interested the Sheriff Clerk shall proceed to record it without further proof of its genuineness. In such case it is impossible to contend that the act of the Sheriff Clerk in recording it gives it unchallengeable validity. If, for instance, a signature is forged, there can be no doubt that the memorandum is challengeable, and that its being recorded would be no bar. The section then proceeds to deal with the case in which the memorandum does not purport to be signed on behalf of all the parties interested, and then if, after notice provided to be given, the genuineness of the memorandum is disputed the Sheriff Clerk is not to record it without a special warrant from the Sheriff. If this means that the special warrant of the Sheriff is to be granted only after an ordinary Sheriff Court litigation has run its course, and that the Sheriff's judgment directing the Sheriff Clerk to record or not to record is to be final, I think the provision is not justified by the power to make Acts of Sederunt conferred on the Court by the 8th section of the 2nd schedule to the Act. But I cannot think that any such proceeding was contemplated when the Act of Sederunt was framed. As has been pointed out in the case of Binning v. Easton & Sons, supra, the act of recording is still the act of the Sheriff Clerk; the Sheriff is his official superior and entitled to direct him, and he is bound to follow such direction. All that I think the Act of Sederunt meant, or could competently mean, was that the Sheriff Clerk should apply for such direction and should follow it. I do not think that the Act of Sederunt contemplated anything like the proceeding which the Sheriff-Substitute allowed to be initiated and carried on before him, in which an elaborate proof was led really to constitute the agreement, and the merits of the question involved were gone into as if in a declarator. I doubt even whether such a summary proceeding as might have been taken under the 52nd section of the Sheriff Courts Act 1876 was intended. I think that the Sheriff was meant to act and could only act as the Sheriff Clerk would have done, but applying his presumably riper and more skilled experience. He should, I think, at most have called the parties before him and have ascertained what the real question between them was, and if he found that this question was one such as we have had disclosed here, where the alleged agreement has to be spelt out by establishing authority to a third party to make it, or by proving acquiescence in and homologation of an agreement which such party had not power to make, then I think that his clear course was to say that he was not so satisfied of the genuineness of the memorandum as to justify his giving special warrant or direction to the Sheriff Clerk to record it, and that he was not entitled to order proof to be led in order that he might satisfy himself of the existence and validity of the agreement alleged and so of the genuineness of the memorandum. The term genuineness is not an expression very happily chosen, but is applied only to the memorandum, and I am unable to read it as involving the validity of the agreement on which it proceeds unless it is merely the prima facie validity. In what the Sheriff-Substitute did do he was really determining judicially in order that he might act ministerially. That was, in my opinion, outwith the schedule to the statute and not contemplated by the Act of Sederunt. I am fully alive to the fact that this opinion is in opposition to what was said by Lord Adam in delivering the judgment of the First Division in the case of Traill & Sons v. Cochrane, 3 F. 1091, but having regard to the decision by the consulted Judges in Binning v. Easton & Sons, supra, I do not think that I am bound by the judgment in Traill & Sons v. Cochrane.

I shall therefore repel the first two pleas for the defenders.

It was further pleaded by the defenders that even if this could be regarded as an action of reduction, the pursuer's averments were not relevant, and that there was no issuable matter. I have come, however, to the conclusion that reduction is not necessary, and that the pursuer gets all that he requires if he succeeds in obtaining declarator that there was no agreement ever entered into by him as alleged in the memorandum which was recorded. If there was no agreement the memorandum ought not to have been executed and ought not to have been recorded, and the Sheriff-Substitute may now be directed to rectify the register, which under the final proviso of section 8 of the second schedule to the Act he has power to do. The reduction of the memorandum does not appear to me to be apposite or necessary, though, if it be thought otherwise, the direction to the Sheriff-Substitute may take that form, for which the conclusions of the summons provide.

Nor do I think that it would do anything but confuse the necessary inquiry to attempt to reduce the matter to issues and send the case to a jury. The subjects of inquiry

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are whether, when the pursuer's father signed the undated receipt he had any authority from the pursuer? Whetherif he had such authority he made an agreement? Whether in signing the receipt the pursuer was aware that such agreement had been made? And whether, in doing so he acquiesced in or homologated that agreement? And as bearing on this, his state of body and mind, the information given him, and the inducements presented to him at the time of signing will have to be inquired into. Whether pursuer's mother signed or had any authority to sign the receipt. Whether, if the pursuer's father had no authority to effect an agreement for him, all or any of these receipts can be interpreted as importing an agreement, or as acquiescing in or homologating an agreement made on his behalf without authority, or as adopting an agreement assumed by the defenders to have been made though never made with authority on his behalf. What is really to be inquired into is the constitution of the alleged agreement, and, because it is necessary to inquire into this reversely in the form of a negative declarator (for which I think there is an amply relevant record), whether that be or be not accompanied by a formal reduction, to do so by way of a jury trial or issues would be, I think, to obscure the real question and run the risk of the miscarriage of justice. It would in fact be to treat the reduction as the primary conclusion because it is stated first in the summons, and the declarator as a mere consequence, whereas I consider the declarator to be the real essence of the case, and the reduction, if necessary at all, to be merely ancillary.

Even if I thought otherwise I should not be prepared to send the case to a jury, as I think it not improbable that it may be necessary to consider judicially the question left open by the judgment in Binning v. Easton & Sons, though decided in Traill & Sons v. Cochrane, whether an agreement under the Act must in Scotland be in writing or can be proved by parole.

I shall therefore repel also the defenders' third plea-in-law, and send the case to proof.”

The defenders reclaimed, and argued—The series of receipts produced here established an agreement for compensation under the Workmen's Compensation Act— Little v. P. & W. M'Lellan, Limited, January 16, 1900, 2 F. 387, 37 S.L.R. 287. Fowler v. Hughes, January 23, 1903, 5 F. 394, 40 S.L.R. 321, was, v. opinions, to the same effect, though on the one receipt there produced the decision was against an agreement. There being an agreement, a memorandum thereof was rightly recorded, and in any case there was no appeal against the Sheriff's decision in that matter— Binning v. Easton & Sons, January 18, 1906, 8 F. 407, 43 S.L.R. 312. The intention of the Workmen's Compensation Act was that the Sheriff's judgment on the genuineness of a memorandum should be final and should not be got behind. Such an intention was easily to be implied where, as here, a new jurisdiction was conferred — Lord President Inglis' opinion in Marr & Sons v. Lindsay, June 4, 1881, 8 R. 784, at p. 785, 18 S.L.R. 535—and that no appeal was competent had been decided in the case of the Railway Clauses Consolidation Act 1845, section 61, a similar instance of the conferring of a new jurisdiction on the Sheriff— Mainv. Lanarkshire and Dumbartonshire Railway Company, December 17, 1893, 21 R. 323, esp. Lord Adam at p. 324, 31 S.L.R. 239. This intention that the Sheriff's decision should be final was confirmed by the power conferred on him to rectify the register, i.e., if necessary to delete a recorded memorandum. The Sheriff was entitled to take evidence and determine judicially in order that he might act ministerially— Cochrane v. Traill & Sons, July 19, 1901, 3 F. 1091, Lord Adam at p. 1093, 38 S.L.R. 848. The action was an attempt to review the judgment of the Sheriff acting in a ministerial capacity and in a matter where his jurisdiction was at once privative and final by statute. It should be dismissed as incompetent and irrelevant. [Counsel also argued that the averments were irrelevant. For the reduction of a written contract, averments of essential error induced by the opponent were necessary— Stewart v. Kennedy, March 10, 1890, 17 R. (H.L.) 25, 27 S.L.R. 469—averments, even stronger, amounting to fraud, must be made for the reduction of a decree of a Court. A recorded memorandum was a decree of Court—Workmen's Compensation Act, 1897, Schedule II, section 8.]

Argued for the respondent—The Lord Ordinary's judgment was right. The Sheriff's granting warrant to record the alleged memorandum of agreement was a ministerial act only— Binning, cit. sup.—and consequently could not support the plea of res judicata. The memorandum might still be reduced, e.g., on the ground of forgery, or the agreement itself on the ground of fraud, or essential error, or a declarator might be brought that an agreement never existed—opinions in Binning, cit. sup. The Sheriff was no doubt the final authority on the genuineness of a memorandum, but on that only, leaving the agreement to be attacked otherwise— Macdonald v. Fairfield Shipbuilding and Engineering Company, Limited, October 20, 1905, 8 F. 8, Lord Kyllachy at p. 12, 43 S.L.R. 1. It was a strained view of the statute that its intention was that the Sheriff's granting warrant to record was to finally settle all questions and to be subject to no species of review, and it was contrary to the opinions in Binning, cit. sup. In that case Lord Kyllachy (at 8 F. 414) had given his opinion that a reduction was competent. The power given to the Sheriff to rectify did not affect the question, as it merely referred to power to alter the compensation standing the agreement. [On the relevancy of the averments counsel argued that essential error only need be averred, the agreement being in fact a gratuitous alienation — M'Laurin v. Stafford, December 17, 1875, 3 R. 265, 13 S.L.R. 174; M'Caig v. Glasgow University Court, July 2, 1904, 6 F. 918,

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41 S. L. R. 700. The essential error was induced by material matters being withheld — Fowler v. Hughes, cit. sup. The recorded memorandum was not a decree of a Court, but only enforceable as such.]

At advising—