Scottish Court of Session Decisions

On 30th October 1909 William James Garscadden, shipowner, raised an action in the Sheriff Court at Kilmarnock against the Ardrossan Dry Dock and Shipbuilding Company, Limited, concluding for (1) delivery of the pursuer's steamship “Staffs,” which had been entrusted to the defenders for the execution of certain repairs, and which the defenders refused to deliver except on payment of their account, the amount of which was disputed; (2) failing such delivery, payment of the sum of £1500, being the value of the vessel; and (3) payment of the sum of £500 in name of damages at the rate of £10 per day for the illegal detention of the vessel from 1st October 1909. Warrant to cite the defenders having been granted, the pursuer on 10th November 1909, before defences had been lodged, moved “in respect that of the defenders' account against him of £250 he has paid to the defenders the sum of £200, and he has consigned the balance of £50 in court, to ordain the defenders forthwith to deliver to the pursuer his vessel ‘Staffa.’”

On 11th November 1909 the Sheriff-Substitute ( Mackenzie) pronounced the following interlocutor—“Finds that the right of retention over the said vessel extends to the expenses to be incurred by defenders in this process: Therefore, in respect that no sum has been consigned to meet the defenders' claim for expenses, refuses the said motion in hoc statu.”

Note.—“A point is here raised upon which it is difficult to find any direct authority. The pursuer asks for delivery of a vessel belonging to him on which certain repairs have been done by the defenders. The amount of their account for these repairs is disputed. The pursuer offers to consign the whole amount demanded by the defenders, and on doing so he asks a decree for delivery of the vessel at this stage. The defenders reply that until consignment is also made of a reasonable sum to cover the expenses to which they may be put by the present action, this motion should be refused.

The question in dispute, therefore, resolves itself into this—whether the right of retention over the vessel, which is admittedly possessed by the defenders, extends to their expenses in this action.

Professor Bell in his Principles, sec. 1410, defines retention as ‘a right to retain a subject legitimately in one's possession until a debt shall be paid, or an engagement performed the jus exigendi of which is in the possessor.’ It is to be observed that there is here no mention of consignment or security, payment alone being the condition on which the subject is set free. The defenders, however, for the purpose of minimising commercial inconvenience, are willing to waive this point. But they maintain that a sum to meet their prospective expenses must be consigned along with the amount of their account.

The only cases to which the pursuer has directed me on this point have to do with a law agent's lien over his client's papers, and one of these— Gray v. Wardrop's Trustees, 1851, 13 D. 963, 23 Jurist 450, affirmed by the House of Lords, 18 D. 52, 27 Jurist 621, would seem at first sight to be directly in his favour. The first part of the rubric runs—‘Law agent's right to retain his client's title-deeds does not extend to the expense of judicial proceedings instituted by him after the termination of his agency for the purpose of recovering payment of his accounts.’

I am not satisfied, however, that the analogy of a law agent's lien is a true one in all respects, and I gather from the opinions delivered (1) that the case does not show the same relation between parties as exists here, and (2) that if the question had been a direct one between the law agent and his client, the result would have been different. This is shown most clearly in the opinion of Lord Cunninghame, who says it is ‘indisputably settled in law and practice that the right of retaining a lien or pledge generally covers the expenses of maintaining or defending it when disputed.’ His Lordship then goes on to cite the instance of sequestrations for rent where the funds realised ‘are invariably held to cover the necessary expenses incurred by any challenge of the lien if repelled.’ The present case appears to me to belong to the general rule above stated, and not to the exceptional state of circumstances where the question does not arise directly between the parties as explained by the Lord Chancellor in the House of Lords report.

The other case quoted— Craig v. Howden, 18 D. 836, 28 Jurist 392—relates to the question of whether consignation is equivalent to payment, but that does not directly arise here.

On the general principle, and on the definition given by Professor Bell, along with the first case quoted above, I think it must be held that the defenders' right of retention here extends to the payment of their account for repairs, whatever the amount of it may be found to be, along with such expenses as they may have been put to in recovering it. Otherwise they would appear to me to be in danger of losing their security, and perhaps a considerable part of their remuneration at the same time. The purpose of their retention would in that case be defeated.

Until, therefore, the pursuer consigns a reasonable sum to cover expenses, I do not think his motion can be granted.”

The pursuer having obtained leave of the court, appealed to the Court of Session, and argued—The defenders had no doubt a lien over the vessel for the amount of their account, but that lien did not

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cover anything more than the account—Brsk. Inst., iii, 1, 34; Bell's Commen. (7th ed.), vol. ii, pp. 92. 93. In any event, the lien could not extend to a debt of which there was no jus exigendi in the possessor — Bell's Prin., section 1410. The defenders' lien therefore could not cover expenses in the present action which were not due now and might never be found due. A lien covered only the sum due for work done on the subject of the lien, and not any other charges— Somes v. British Empire Shipping Company, 1860, 8 Cl. (H.L.C.) 338; Stephen v. Swayne, December 13, 1861, 24 D. 158. In Gray v. Wardrop's Trustees, 1855, 2 Macq 435, 13 D. 963, it was no doubt suggested by Lord Cranworth, L.C., that a law agent's lien covered the expenses of his action for payment of his account, but it was clear that the expenses contemplated there were the expenses already incurred. Arrestments had been held not to cover the expenses of the action— M'Phedron and Currie v. M'Callum, October 31, 1888, 16 R. 45, 26 S.L.R. 27; Stewart v. Macbeth & Gray, December 19, 1882, 10 R. 382, 20 S.L.R. 266. The pursuer was therefore entitled to delivery of his vessel on consignation of or caution for the amount of the defenders' account.

Argued for the defenders—A party holding a lien was bound to surrender it only on his own terms, unless these could be shown to be unreasonable, and the Court, which had power to regulate the exercise of the right, would not interfere unless the circumstances demanded it— Ferguson and Stewart v. Grant, February 8, 1856, 18 D. 536. The defenders' terms here were not unreasonable. They did not ask payment of their account, but only consignation of the amount and caution for expenses. The defenders would be entitled to the expense of constituting their claim, and if so they were entitled to be secured until paid, and their lien must therefore cover expenses.

[It was stated at the Bar that the amount of the account was not £250, but £275, and counsel for the pursuer agreed to consign the further sum of £25.]