Scottish Court of Session Decisions

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Cite as: [1907] ScotLR 899, [1907] SLR 899

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SCOTTISH_SLR_Court_of_Session

Page: 899↓

Court of Session Inner House First Division.

(Single Bills.)

Friday, July 12. 1907.

44 SLR 899

Robertson

v.

Brandes, Schonwald & Company.

(See ante, May 23, 1906, 43 S.L.R. 635, 8 F.210.)

Subject_1Expenses
Subject_2Process
Subject_3Contract
Subject_4Arbitration — Expenses of Action where Defender Repudiates Liability but on Action being Raised Calls for Arbitration, and is Successful as to Applicability of Arbitration though Eventually Unsuccessful before the Arbiter.
Facts:

A merchant claimed damages from a firm from whom he had purchased goods, on the ground that goods of inferior quality had been delivered. The firm repudiated liability, but, on a summons being served, called on the pursuer in terms of the contract to arbitrate, and a question thereupon arose whether the arbitration clause was valid and the dispute covered by it. In the discussion of this question the defenders were throughout successful. The pursuer, who had contested the arbitration but had obtained an award thereunder, asked for the expenses of raising the action and of the discussion in the procedure roll, the other expenses having already been dealt with.

Held that the defenders were not liable in expenses, having been willing to arbitrate, but were not entitled to expenses, having at first repudiated liability.

Headnote:

The case is reported ante ut supra.

The action was by John Robertson, grain merchant, Perth, against Brandes, Schönwald, & Company, Place de la Meir, Antwerp, to recover damages for breach of contract, the defenders having delivered, as alleged, goods disconform to contract. On May 23rd 1906, on a reclaiming note, the Division had sisted procedure in hoc statu, holding that the arbitration clause in the contract between the parties, and consequently whether the dispute between the parties came within it, fell to be construed by the law of England. An award of damages in arbitration proceedings had now been given to the pursuer, and the case came up upon a note. The only question remaining between the parties was as to the expenses of raising the action and of the discussion in the procedure roll.

The damage claimed had been discovered on the 4th January 1906, and intimated by cable to the defenders on the 5th, when they repudiated liability, and a correspondence had thereafter ensued, in which they had maintained that position. The pursuer used arrestments jurisdictionis fundandœ causa, and served his summons edictally on 22nd January. On the 24th January the defenders called upon the pursuer to arbitrate, and there arose difficulty connected with the arbitration (reported in previous report, 43 S.L.R. 635).

The expenses of the arbitration proceedings had been dealt with in the award; the expenses of the reclaiming note had been dealt with in the interlocutor sisting procedure, pronounced thereon on May 23rd 1906; and the expenses of an amendment of the record had been dealt with when the amendment was allowed.

The pursuer moved for the expenses of raising the action and the discussion in the procedure roll, and argued—The result of the arbitration showed that the claim made was in large part well founded. The defenders being foreigners the action was necessary—(1) to arrest, (2) to get a decree, the arbiter having no power to pronounce a a decree. Thus the defenders were liable in the expenses claimed. Arbitration was only offered by the defenders after the summons was served.

Argued for the defenders—The action was unnecessary, and the pursuer had been uniformly unsuccessful in this Court though he had succeeded before the arbiter; therefore the defenders were entitled to the expenses, they having all along been willing to arbitrate. Levy & Co. v. Thomsons, July 10, 1883, 10 R. 1134, 20 S.L.R. 753, was referred to.

Judgment:

Lord President—The point to be decided here is a question of expenses. The pursuer is a merchant in this country who had bought a certain quantity of slag from the defenders, who are a foreign firm, and the action is an action for damages for faulty delivery of the slag. The action having been raised, the defenders pleaded an arbitration clause. There was a decision by the Lord Ordinary on that point, which was affirmed by your Lordships, with the result that the dispute had to go to arbitration. The arbitration then proceeded, and in it the pursuer got an award of a sum of money as damages and also an award of expenses. The defenders have paid these sums; so there is now no question that the action must be taken out of Court, and that, in consequence of the payments I have referred to, the defenders are entitled to be assoilzied.

There only remains the question of expenses. Now the expenses of the cause have to a great extent been already dealt with. An amendment of the record was allowed and the expenses of the amendment have been disposed of. So also have the expenses of the reclaiming-note to this Court; and the only expenses now remaining to be dealt with are the expenses of the raising of the action and of the discussion in the procedure roll. Now, I am not aware that this is a point which has yet been settled by decision—at any rate no trace of it is to be found in the case of Levy & Company v. Thomsons, July 10, 1883, 10 R. 1134. In that case there is nothing in the books to show what happened in the preliminary stages. Here, however, we have some correspondence, from which it is quite clear that the defenders were all along quite willing to arbitrate. There

Page: 900↓

may be cases where a pursuer is entitled to bring the defender into Court—where, for instance, the defender refuses either to pay or to arbitrate—and in such cases, if the defender subsequently pleads arbitration, the pursuer would naturally be entitled to recover the expenses of raising the action. But I think that, following on what was said in Levy, where as here the defender is all along willing to arbitrate, the pursuer cannot recover the expenses of raising the action.

On the other hand, I do not think the defenders here are entitled to an award of their expenses, for they have been to a certain extent in the wrong, since they disputed their liability for any payment at all. We shall therefore pronounce a decree of absolvitor and find no expenses due to or by either party.

Lord Kinnear and Lord Dundas concurred.

The Court recalled the sist and assoilzied the defenders, finding no expenses due to or by either party.

Counsel:

Counsel for the Pursuer— Morison, K.C.— T. Graham Robertson. Agents— J. & J. Galletly, S.S.C.

Counsel for the Defenders— Boyd. Agents— Boyd, Jameson, & Young, W.S.
1907