Scottish Court of Session Decisions

The Workmen's Compensation Act 1906 (6 Edw. VII, cap. 58), enacts—section 1 (1)—“If in any employment personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall … be liable to pay compensation …” Section 7 (1)—“This Act shall apply to masters, seamen, and apprentices to the sea service, and apprentices in the sea-fishing service, provided that such persons are workmen within the meaning of this Act, and are members of the crew of any ship registered in the United Kingdom, or of any other British ship or vessel of which the owner, or (if there is more than one owner) the managing owner, or manager resides or has his principal place of business in the United Kingdom.… (2) This Act shall not apply to such members of the crew of a fishing vessel as are remunerated by shares in the profits or the gross earnings of the working of such vessel.”

The Partnership Act 1890 (53 and 54 Vict. cap. 39), enacts—section 2—“In determining whether a partnership does or does not exist, regard shall be had to the following rules:—(2) The sharing of gross returns does not of itself create a partnership, whether the persons sharing such returns have or have not a joint or common right or interest in any property from which or from the use of which the returns are derived. (3) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but the receipt of such a share, or of a payment contingent on or varying with the profits of a Business, does not of itself make him a partner in the business;…”

Elizabeth Murray or Clark and Elizabeth Clucas Clark, Skelberry, Lunnasting, claimed in the Sheriff Court at Lerwick compensation under the Workmen's Compensation Act 1906, from the firm of G. R. & W. Jamieson, merchants, Sandwick, and the individual partners thereof, in respect of the death by drowning of Levie James Clark on the ground that he was at the time a workman in their employment. The claimants were respectively the mother and sister of the deceased.

The matter was referred to the arbitration of the Sheriff-Substitute at Lerwick ( Broun), who awarded compensation, and at the request of the firm stated a case on appeal.

The case stated that the following facts were admitted or proved:—(1) The appellants are fishcurers, bakers, and general merchants at Brownie's Taing, Sandwick, and are also agents at Sandwick for the North of Scotland and Orkney and Shetland Steam Navigation Company, one of which company's boats calls as a rule once a week at Sandwick, during the herring fishing season from May to October. (2) For the purposes of their business of fishcuring, the appellants have for some years been the owners of a flitboat called the ‘Narwhale.’ This flitboat is laid up during the winter, but is utilised by the appellants during the herring fishing season. (3) A flitboat is a sailing boat worked by two men as skipper and hand. It is chiefly used for conveying empty barrels and salt from vessels lying off the shore to the fishcuring stations, and conveying barrels filled with herring from the stations to vessels. A flitboat is not a fishing boat in any sense of the term. (4) On 6th April 1907 the appellants advertised in The Shetland Times for ‘two men to work a barrel boat at Brownie's Taing.’ (5) In response to said advertisement an application was lodged by Robert Robertson, Lunnasting, and on 12th April 1907 the appellants wrote to him in the following terms:—‘We have a number of applicants for our flitboat, but the writer was in Lerwick on Wednesday last, when he spoke with William Spence, who strongly recommended you; and we have decided to give you the boat, and if you decide to accept, you will find another man to go along with you. You would require to come here about the middle of May, but we would let you know exactly later. Our terms is a third share to each man and a third to the boat. The boat is open along the sides, except about 15 inches along the side, and has a small forecastle which you could stay in. She is fitted for local work, but could make a trip between Lerwick and here if required. She is a good strong little boat; can carry 140 barrels herrings. We have had 200 barrels salt in her. We have a curing station, and you would have all our flitting when you could manage it, and if you were pushing it, you would pick up a lot of work among the other curers. When you were slack we would give you work on the station or elsewhere, when we had it, at 4d. per hour, and for working at the s.s. “Earl” we would allow you 6d. an hour, both you and your man.’ (6) Robert Robertson, in accordance with the instructions in said letter, engaged Levie James

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Clark, Skelberry, Lunnasting, as the hand under him for working said boat, and on 19th April the appellants wrote Robertson as follows—‘We shall now consider the matter closed, and shall advise you when to come here, but we expect it will be about the middle or latter part of next month. The trustees is shortly to erect a temporary jetty near Brownie's Taing Pier for the accommodation of fishing boats while the big pier is being extended; and if this jetty prevents the “Earl” from getting to the pier we will have to boat ashore the goods, when we would require you and your boat to flit the goods, but will let you know as soon as we can. We are pleased to hear that you have got another good man along with you, and you can depend we will treat you fair and square at all times, and will expect you to do the same by us. You will bring your bedding, and you can get all other requirements from us here. We will endeavour to get the boat launched before you come.’ The ‘Earl’ mentioned in said letters is one of the steamers of the North of Scotland and Orkney and Shetland Steam Navigation Company. (7) As regards remuneration, the terms of the engagement were—A third share of the gross earnings to the appellants, and a third share to each of the two men working the boat. The appellants supplied all the boat's furnishings and maintained the boat, while the men kept things aboard in order. This is the usual system on flitboats, and is adopted because it is impossible to get men to work them for fixed wages. (81 On 3rd May 1907 the appellants telegraphed to Robertson—‘Take your man and come. “Earl” comes here next Wednesday evening;’ and on Wednesday, 15th May, Robertson and Clark proceeded to Sandwick. (9) Robertson and Clark put up in a shed belonging to the appellants, beside the house inhabited by the appellants' foreman. They were charged nothing for said lodgings. They found themselves in provisions, &c., most of which were got from the appellants, separate accounts being opened in their names as individuals and as the crew of the ‘Narwhale.’ (10) The appellants had the first call on the services of the ‘Narwhale’ and her crew, and the boat did practically all the flitting connected with the appellants' curing station, and the landing of goods from the steamers of the North of Scotland and Orkney and Shetland Steam Navigation Company at Sandwick. There were only two occasions on which the appellants had work that was not done by the ‘Narwhale.’ On the first occasion the ‘Narwhale’ was found to be too small to flit a number of barrels belonging to the appellants, and Robertson, the skipper of the ‘Narwhale,’ arranged with the skipper of a flitboat belonging to another firm of fishcurers at Sandwick to perform the work. On the second occasion the appellants had granted the crew of the ‘Narwhale’ permission to go home for a week, and during their absence the appellants employed the flitboat of another fishcurer at Sandwick to do some necessary flitting. When the appellants had no work afloat to give to the ‘Narwhale,’ the boat did flitting for other curers at Sandwick, such flitting being undertaken by Robertson as skipper, on behalf of the boat, and the rates charged being the same as those paid by the appellants to the boat for similar work. When no flitting work could be got, the appellants, whenever possible, supplied Robertson and Clark with work ashore, such as cutting peats and hay, coaling, and discharging salt on the stations, and assisting at the construction of a boat which was being built by a brother of the said partners of the appellants' firm. (11) Robertson, as skipper of the ‘Narwhale,’ kept a cargo book in which he noted all the work done by the boat, both for the appellants and for other fishcurers. In this book he also entered the work ashore supplied by the appellants to the members of the crew of the ‘Narwhale.’ (12) On 27th July 1907 the appellants gave instructions to Robertson and Clark to proceed in the ‘Narwhale’ to Lerwick on 29th July, and to convey a cargo of empty herring barrels from James Mitchell & Sons’ barrel factory there to the appellants' fishcuring station at Sandwick. (13) While Robertson and Clark were returning from Lerwick to Sandwick with these barrels on 30th July, Clark got into the small boat in tow of the ‘Narwhale’ for the purpose of fastening a loosened staple. The small boat capsized, and Clark was thrown into the sea and was drowned. (14) At the close of the herring fishing season in October, Robertson handed the cargo book to the appellants, who collected the freights due to the ‘Narwhale’ and divided up the gross proceeds made by the boat, in accordance with the arrangement stated in paragraph 7. The charges entered in the cargo book amounted to the following totals at the close of the season—(1) £24, 18s. 10d. due by the appellants for flitting in connection with their fish-curing station; (2) £32, 8s. due by the appellants for landing goods from the steamers of the North of Scotland and Orkney and Shetland Steam Navigation Company; (3) £12, 3s. 9 1 2d. due by other fishcurers at Sandwick for flitting in connection with their curing stations; and (4) £8, 0s. 5d. due by the appellants to individual members of the crew of the ‘Narwhale’ for work done by them ashore. (15) On 25th October 1907 the appellants sent to the respondent Mrs Elizabeth Murray or Clark a statement of the amount of the earnings due to her son, the said Levie James Clark, at the date of his death, under deduction of accounts incurred to them by him as a member of the crew of the ‘Narwhale’ and as an individual. In the letter enclosing the statement the appellants wrote—‘Our acquaintance of your son was very short, but we were highly pleased with him, and always found him a willing and capable hand.’

The Sheriff—Substitute's finding was—“Upon the foregoing facts I found that the said Levie James Clark, while in the employment of the appellants as a hand on board the flitboat ‘Narwhale,’ was on 30th July 1907 drowned by accident arising out of and in the course of his employment, and

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that the respondents, his mother and sister, as both wholly dependent on his earnings, were entitled to receive from the appellants statutory compensation, which I assessed at £150.”

The question of law for the opinion of the Court was—“Was the late Levie James Clark at the time of his death a workman in the employment of the appellants within the meaning of the Workmen's Compensation Act 1906?”

Argued for the appellants—It was sufficient to exclude the benefit of the Act here that there was no contract of service between the parties. The essentials of a contract of service were (1) power of selection, (2) power of dismissal, (3) payment of wages, and (4) control of workmen by employer— Cairns v. Clyde Navigation Trustees, June 17, 1898, 25 R. 1021, 35 S.L.R. 808. None of these essentials were satisfied here. The same tests had also been applied in Hayden v. Dick, November 26, 1902, 5 F. 150, 40 S.L.R. 95; M'Gregor v. Dansken, February 3, 1899, 1 F. 536, 36 S.L.R. 393; M'Cready v. Dunlop & Co., June 16, 1900, 2 F. 1027, 37 S.L.R. 779; Paterson v. Lockhart, July 13, 1905, 7 F. 954, 42 S.L.R. 755. The contract was not one of service, but either of hire of the boat, the rent being one-third of the receipts, or of partnership for a joint-adventure between the men and the owners of the boat, each getting a share of the profits, which was in itself prima facie evidence of partnership in terms of the Partnership Act 1890 (53 and 54 Vict. c. 39), sec. 2 (3). The remuneration here was not wages— Gill v. Aberdeen Steam Trawling and Fishing Company, Limited, 1908 S.C. 328, 45 S.L.R. 247. If any loss had occurred on any contract undertaken by this boat, the general fund in which all participated would have had to bear it. The whole facts were consistent with partnership or joint-adventure, but not with service. Even if deceased were held to have been a servant, he was the servant of a joint-adventure in which he himself was a partner, and he was therefore not entitled to compensation— Ellis v. Joseph Ellis & Co., [1905] 1 KB 324. In any event, the burden lay upon the respondents of showing that the deceased was a workman in the sense of the Act— Vamplew v. Parkgate Iron and Steel Co., [1903] 1 KB 851.

Argued for the respondents—The whole facts here were favourable to the theory of service rather than to hire of the boat or to joint-adventure. At all events, the position of the deceased sufficiently satisfied the conception of “employment” in section 1 of the Act— Paterson v. Lockhart, supra, per Lord M'Laren, 7 F. 957. There was nothing in the nature of a charter of the boat, so it could not be said to have been hired to the men, and there were no elements of joint-adventure or partnership in the facts stated by the Sheriff-Substitute—Bell's Prin., secs. 392–396. There was no contribution to capital of the adventure by the men, who were not subject to losses, expenses, &c. They received shares of gross earnings, analtogether different thing from profits, which might have afforded prima facie evidence of partnership under the Partnership Act 1890, sec. 2 (3). Evans v. Penwyllt Dinas Silica Brick Co., November 13, 1901, 18 T.L.R. 58, was an authority to the effect that a man paid by piecework was entitled to compensation under the Act.