Scottish Court of Session Decisions

The Workmen's Compensation Act 1906 (6 Edw. VII, cap. 58) enacts—Second Schedule (9)—“Where the amount of compensation under this Act has been ascertained … by agreement, a memorandum thereof shall be sent … to the [sheriff-clerk], who shall,… on being satisfied as to its genuineness, record such memorandum.… ( d) Where it appears to the [sheriff-clerk], on any information which he considers sufficient, that an agreement as to the redemption of a weekly payment by a lump sum … ought not to be registered by reason of the inadequacy of the sum … or by reason of the agreement having been obtained by fraud or undue influence, or other improper means, he may refuse to record the memorandum of the agreement … and refer the matter to the [sheriff],… who shall … make such order … as under the circumstances

Page: 281↓

he may think just. ( e) The [sheriff] may, within six months after a memorandum of an agreement as to the redemption of a weekly payment by a lump sum … has been recorded in the register, order that the record be removed from the register on proof to his satisfaction that the agreement was obtained by fraud … or other improper means, and may make such order … as under the circumstance he may think just.”

The Act of Sederunt, 26th June 1907, sec. 12, is quoted supra in rubric.

James Burns, brusher, Kilsyth, appellant, appealed by way of Stated Case against a decision of the Sheriff-Substitute ( Mitchell) at Stirling, in proceedings at his instance against William Baird & Company, Limited, Glasgow, respondents, under the workmen's Compensation Act 1906 (6 Edw. VII, cap. 58).

The Case stated by the Sheriff-Substitute set forth—“This is an arbitration in connection with an application for the registration of an alleged memorandum of agreement between the appellant and the respondents. The application to record was made on 26th March 1912, per a letter from the Scottish Mine Owners' Defence and Mutual Insurance Association, Limited, on behalf of the respondents; and said memorandum bore that the appellant accepted a lump sum payment of £40 ‘in full satisfaction and discharge of all claims past and future’ in respect of injury by accident on 11th December 1911. The memorandum also bore to be signed by an agent (in Glasgow) on behalf of appellant. On 27th March 1912 the registrar, the sheriff-clerk, at the request of the respondents, served a copy of the memorandumon the appellant, with an intimation that it would be recorded unless the genuineness was disputed or recording was objected to before 4th April. On 3rd April 1912 another agent (in Kilsyth) wrote to the registrar a letter which concluded with these words—‘Please note that my client (Burns) disputes the genuineness of the same (memorandum) and objects to the recording.’ The registrar on 6th April notified this intimation to the said Assurance Association, and stated that consequently the memorandum would not be recorded without a special warrant from the Sheriff. On 12th April the appellant's new agent wrote to the registrar setting forth the circumstances under which he had previously written for the appellant ‘objecting to’ the recording of the memorandum, and now referring the registrar to the Act of Parliament, Schedule II, 9 (d), and requesting him to refer the matter to me. On 16th April the registrar replied to appellant's said agent suggesting to him to lodge a minute as provided for in section 12 of the Act of Sederunt of 26th June 1907, and on 17th April appellant's said agent wrote to the registrar pointing out that under said provision the sheriff-clerk had power to lodge a minute ‘stating clearly all the grounds for his action’ (the words of the section) in refusing to record the memorandum under Schedule II, 9 (d), of the Act, and inquiring whether he intended to lodge such a minute. By letter of same date the registrar replied that while he had power under the said Act of Sederunt to lodge such a minute, it was clearly the intention of Schedule II, 9 ( d), of the Act that he should only do so when no objection had been lodged to the recording of the memorandum, and that as such objection had been lodged the appellant should lodge a minute. On 3rd May the appellant lodged a minute objecting to the recording of the memorandum on the ground that it was ‘not genuine in respect that said payment of £40 sterling was not accepted by the claimant in full satisfaction and discharge of all claims past and future in respect of the accident,’ and explaining and averring that there was inadequacy of consideration and in effect unfair or improper treatment in the matter of the agreement. On 5th July 1912, after hearing parties, I held that the appellant's procedure per minute No. 1 of process was not competent under the statute (the grounds stated in said minute not in my view raising a question of ‘genuineness’), dismissed the same, and granted warrant to record the memorandum of agreement, finding the respondents entitled to modified expenses.”

The minute, No. 1 of process, was to the following effect—“The said James Burns objects to the recording of the memorandum of agreement on the ground that it is not genuine in respect that said payment of forty pounds sterling was not accepted by the claimant in full satisfaction and discharge of all claims, past and future, in respect of the accident described in said memorandum. It is explained and averred that the claimant is illiterate, and cannot even write his own name. On or about 26th March 1912 the respondents, through their agents, requested the claimant to come to Glasgow, and at the interview which took place on the date mentioned respondents offered the claimants forty pounds, stating that that sum was the most he could get under any circumstances, and that his hand would soon be better. In that belief the claimant reluctantly accepted the sum offered. As the claimant was unable to write, one of the respondents representatives intimated to the claimant that he would send out for a ‘sheriff,’ who would sign for him. The claimant gave the party who was brought in authority to sign for him, but expressed at the time his dissatisfaction with the sum he was being paid by the respondents. The said party, however, offered him no advice. The respondents did not suggest to the claimant, although they knew of his being illiterate, that he should obtain independent medical or legal advice. In accepting said sum of forty pounds the claimant relied on the respondents treating him fairly from their knowledge of his injuries, which were examined on several occasions by the respondents' medical officers. It is explained and averred that the said sum of forty pounds paid to claimant is grossly inadequate. The

Page: 282↓

claimant has, since receiving said payment, consulted his own medical adviser, and has ascertained that the working capacity of his right hand is completely and permanently destroyed. It is further explained and averred that in terms of paragraph 12 of the Act of Sederunt of 26th June 1907, these questions fall to be settled by arbitration.”

The questions of law were—“(1) Was I right in holding that the appellant's procedure per minute No. 1 of process was not competent under the Workmen's Compensation Act 1906? (2) Was I entitled to dismiss said minute without proof of the grounds of opposition to the recording of the alleged memorandum of agreement set forth therein?”

Argued for the appellant—The facts averred in the minute were relevant to infer that the memorandum was not genuine, and therefore the Sheriff-Substitute ought to have inquired into them, in accordance with section 12 of the Act of Sederunt, 26th June 1907. “Genuineness” ought not to be construed too strictly, for the intention of the Act of Sederunt was to avoid litigation and settle questions of compensation by arbitration. In any event, it would have been competent for the Sheriff to have considered the question of the adequacy of the compensation had the sheriff-clerk himself lodged the minute, and the mere fact that it was the workman who lodged it. and that too on the advice of the sheriff-clerk, could make no difference. The following authorities were referred to— Hanley v. Niddrie and Benhar Coal Company, Limited, 1910 S.C. 875, per Lord Kinnear at p. 880, 47 S.L.R.726, at p. 729; Macandrew v. Gilhooley, 1911 S.C. 418, 48 S.L.R. 511; Lochgelly Iron and Coal Company, Limited v. Sinclair, 1909 S.C.922, 46 S.L.R. 665; Ellis v. Lochgelly Iron and Coal Company, Limited, 1909 S.C, 1278, per Lord President at p. 1281, 46 S.L.R. 960, at p. 961; John Brown & Company, Limited v. Orr, 1910 S.C. 526, 47 S.L.R. 437.

Argued for the respondents—It was the workman and not the sheriff-clerk who had taken exception to the registration of the memorandum, and therefore in terms of sec. 12 of the Act of Sederunt, 26th June 1907, the only question for the Sheriff was the “genuineness” of the memorandum. The question of the adequacy of the compensation was not competent— Macdonald v. Fairfield Shipbuilding Company, Ltd., October 20, 1905, Ltd., October 20, 1905, 8 P. 8, per Lord Kyllachy at p. 11, 43 S.L.R. 1, at p. 3; Traill & Sons v. Cochrane, July 19, 1901, 3 F. 1091, per Lord Adam at p. 1093, 38 S.L.R. 848, at p. 850; M'Lean v. Allan Line S.S. Co., Ltd., 1912 S.C. 256, 49 S.L.R. 207. The workman's remedy was provided by sec. 9 (e) of the Second Schedule of the Act of 1906, under which he was entitled to raise the question of adequacy within six months of the recording of the memorandum. The facts averred in the minute were not relevant to infer that it was not genuine, for the workman, admittedly, had agreed to accept the compensation. In John Brown & Company, Limited v. Orr, cit. sup., while the decision of the Court was to the effect that the remedy was statutory, the ground on which it was sought to set aside the memorandum was that it was not genuine. The following cases were also referred to— Binning v. Easton & Sons, January 18, 1906, 8 F. 407, 43 S.L.R. 312; Coakley v. Addie & Sons, Ltd., 1909 S.C. 545, 46 S.L.R. 408.