Scottish Court of Session Decisions

The Caledonian Railway (Grangemouth Harbour) Act 1876 (39 and 40 Vict. cap. xlviii), section 25, enacts—[The North British Railway Company] “shall have right in perpetuity to run over and use all lines of rails and sidings already formed, or which may hereafter be formed, by the [Caledonian] Company, for connecting the company's Grangemouth Branch Railway with the existing harbour, docks, timber basins, and quays at Grangemouth, and with the wet dock, timber basin, and quays authorised by this Act, including the railway authorised by the Act of 1873, and therein called Railway No. 16, and the turn-tables and other appliances at the said docks, timber basins, and quays (all which works and conveniences shall be maintained by the company), upon payment to the company of the sums hereinafter mentioned, unless the said companies otherwise agree, that is to say … in so far as such works and conveniences (including the said Railway No.16) shall be formed after the date of the passing of this Act, upon payment in each year of a share of the interest, at the rate of 7 per centum per annum upon the cost thereof (excepting the cost of cranes, in respect of which dues are leviable under this

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Act), bearing the same proportion to the whole interest at that rate upon such cost which the tonnage of the traffic of the North British Company using such last—mentioned works and conveniences, including as aforesaid, in the preceding year shall have borne to the total tonnage using the same in connection with the railways of both of the said companies in such preceding year. Fpr the purposes of this section the cost x>f the lines of rails and sidings which may be hereafter formed by the company (including the said Railway No. 16) shall only include the expense of the rails, chairs, and other permanent-way material, and of laying down the same on the surface, together with the purchase money of any land which may have been or may be acquired by the company for the purposes thereof (except in so far as such land may be required for the dock and timber basin and quays thereof), and compensation for any damage to adjoining lands, and the cost of the diversion of the turnpike road over the said Railway No. 16 as authorised by the Act of 1873.”

The Caledonian Railway Act 1897 (60 and 61 Vict. cap. cxviii), section 12, enacts—“Whereas by the Borrowstounness Town Improvement and Harbour Act 1897 certain running powers and other rights are conferred on the company in connection with the railways of the North British Railway Company to the harbour and docks of Borrowstounness, including the branch to Bridgeness as therein mentioned: Therefore the North British Railway Company shall have right in perpetuity to run over and use all lines of rails and sidings which may hereafter be constructed by the company for connecting the Company's Grangemouth Branch Railway with the dock works, and may use all turntables and other appliances at the dock works (all which works and conveniences shall be maintained by the company) upon payment to the company in each year of a proportion of the interest upon the cost of such works (including the cost of land) calculated at the rate and in the manner provided by section 25 of the Caledonian Railway (Grangemouth Harbour) Act 1876, with reference to the payment by the North British Railway Company to the company thereby required to be made in respect of the use by the North British Railway Company of all lines of rails and sidings and other conveniences formed by the company after the passing of that Act for connecting the Grangemouth Branch Railway with the then existing and authorised harbour, dock, timber basins, and quays at Grangemouth.”

The Caledonian Railway Company, pursuers, brought an action in the Court of Session against the North British Railway Company, defenders, concluding for payment of £58,487, 4s. 8d. as tolls due for the user of certain lines and sidings connected with Grangemouth Harbour. That sum included a proportion of a percentage on the “cost of the land” acquired for the lines and sidings, and on the expense of the “rails, chairs, and other permanent-way material,” and the question was what was to be included in these terms. There were other questions with which this report does not deal.

The facts are narrated by the Lord Ordinary (Cullen), who, on 20th November 1912, pronounced this interlocutor—“Finds on a sound construction of the 12th section of the Caledonian Railway Act 1897 … that in calculating the payment thereby required to be made by the defenders in respect of the running powers thereby given to them over lines of rails and sidings and other works and conveniences of the pursuers, of a proportion of the interest upon the cost of construction thereof, the cost of construction of lines of rails and sidings falls to be determined in the manner defined in the last paragraph of section 25 of the Caledonian Railway (Grangemouth Harbour) Act 1876: With the above finding, allows the parties a proof of their averments on record, and to the pursuers a conjunct probation.”

Opinion.—“… I read the section ( i.e., of the 1897 Act) as if it had said that the defenders should make a payment by way of a proportion of the interest on the cost of construction, which payment should be calculated on the basis of the same rate of interest and otherwise in the same manner as the 1876 Act prescribed with reference to the payment to be made under it. This is a paraphrase of the words of the 12th section, but it seems to me to represent the fair leading of these words. And, so read, it imports into section 12 the special rule of the 1876 Act for estimating the cost of construction of lines of rails and sidings. …”

After the proof the Lord Ordinary on 31st July 1914 pronounced this interlocutor—“Finds ( first) with reference to the branch of the pursuer s’ claim in respect of cost of land to be brought into the account between the parties,… (6) that the words ‘including the cost of land’ used in section 12 of the Caledonian Railway Act 1897 mean the purchase prices of lands paid by the pursuers to the owners from whom they acquired the lands; ( c) that the extent of land acquired by the pursuers for the purposes of lines of rails and sidings within the meaning of the last paragraph of section 25 of the Caledonian Railway (Grangemouth Harbour) Act 1876 falls to be estimated by bringing into the account the land actually occupied by each line of rails or siding and a margin of land 6 feet in width on either side thereof; … ( third) that under Head B (permanent way and relative works) of said statement of expenditure that item No. 6, being ‘ballast provided and laid,’ falls to enter the said account between the parties.… Continues the cause for further procedure, and grants leave to reclaim.”

Opinion.—“By an Act passed in 1867 (30 and 31 Yict. cap. cvi) the undertaking of the Forth and Clyde Navigation was transferred to and vested in the present pursuers, the Caledonian Railway Company. The undertaking included the dock and harbour of Grangemouth. It also included the Grangemouth Branch Railway, forming the access to the dock, and extending from a point of junction near Grahamston with what was then known as the Stirlingshire Midland

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Junction Railway (afterwards North British) to Grangemouth. At the time of the transfer this branch railway was worked by the defenders the North British Railway Company under a lease from the Canal Company.

The Act of 1867 was opposed by the North British Company, and in the result an agreement was come to which is scheduled to the Act and confirmed by it. Article 1 thereof provided that the North British Company should have right in perpetuity to run over and use the said branch railway, together with the lines of rails and sidings which then connected the same with the dock and harbour of Grangemouth and the various quays thereof, at a fixed toll. It further provided that the management of the said branch and other railways and sidings in connection with the docks should be vested in a joint committee. Article 2 gave the Caledonian Company a like power to run over so much of the Stirlingshire Midland Branch of the North British Railway as extended between its junction near Grahamston with the Grangemouth Branch Railway and its junction at Larbert with the Caledonian Railway, at a fixed toll. Article 6 provided that the North British Company should have equal facilities and advantages with the Caledonian Company for using the various canals belonging to the undertaking of the Forth and Clyde Navigation Company, and the various stations, wharves, loading banks, quays, harbours, docks, and lines of railway by which the system of the North British Railway was then or might be connected with the said canals, and should be entitled to have their goods and mineral traffic of every description carried over the said canals or any part or parts thereof at the same rates for the time as should be charged by the Caledonian Company either by themselves or to traders for the like traffic passing over the said canals for similar distances.

In 1876 the Caledonian Company obtained powers to make a new dock at Grangemouth known as the Carron Dock, by virtue of the Caledonian Railway (Grangemouth Harbour) Act 1876 (39 and 40 Vict. cap. xlviii). Between 1867 and 1876 there had been an amplification of the works and conveniences at Grangemouth Harbour. [ His Lordship then quoted section 25 of the Act of 1876, v. sup.

By the Caledonian Railway Act 1897 (60 and 61 Vict. c. cxviii) very large extensions of the works at Grangemouth Docks were authorised, being the works numbered 1 to 7 and described in section 4 of the Act, and embracing (1) a sea wall or embankment, (2) an entrance channel leading to the new dock next mentioned, (3) a dock known as Grange Dock, (4) a junction cut between that dock and the existing Carron Dock, (5) a jetty on the northern side of the entrance channel, (6) a jetty on the southern side of the entrance channel, (7) a diversion of the stream called the Grange Burn.

By section 12 powers of use were given to the North British Company in the following terms:—[ His Lordship then quoted the section, v. sup.]

At an earlier stage in this case I heard a discussion in procedure roll on the question whether the reference in this section to the 1876 Act imported into the scheme of payment under the section the special rule laid down in the last paragraph of section 25 of the 1876 Act for estimating the cost of lines of rails and sidings. By interlocutor dated 20th November 1912 I held that it did.

The rights of user given to the North British Railway Company by the Act of 1897 and the scheme of payment in respect thereof being as above stated, questions have arisen between the companies regarding the due application of the scheme of payment in different directions. In the meantime there have been from time to time settlements between the companies, references to which occur in the evidence. Neither company, however, appeals to these settlements as fixing the construction of the statutory provisions.

I turn now to consider the various heads of claim in dispute.

Land.—… The next question under this head is what is meant by the ‘cost’ of land which does enter the account. The term used in the 1876 Act is not ‘cost’ but ‘purchase price.’ The dispute is whether what is meant is only the price in the proper sense or whether it includes expenses of acquisition. Now I think that the ‘cost’ of land acquired by a purchaser may from his point of view be said ordinarily to include all expenses to which he is put in order to acquire it. Here, however, the formula in the 1876 Act says ‘purchase price’ The 1897 Act, no doubt, says ‘cost’ But the 1897 Act in the view I take adopts the formula of the 1876 Act by reference. ‘Cost’ is thus equivalent to ‘purchase price’ Now the words ‘purchase price ‘embody a limited conception of cost. In their ordinary meaning they designate the money paid to the seller in name of price. 1 do not read the 1897 Act as intended by its use of the word’ cost ‘to vary this meaning. I therefore conclude that what falls to be taken into account as the cost of the lands used for lines of rails and sidings is the amount of the money paid by the pursuers to the sellers of the lands in name of price therefor.

Ballast.—… The only other matter in controversy in connection with the cost of lines of rails and sidings is the claim which the pursuers make for ballast used in making the permanent way of these lines.

The words of the statute here to be applied are these—‘Shall only include the expense of the rails, chairs, and other permanent-way material, and of laying down the same on the surface.’

Ballast is admittedly part of the material of the permanent way. The defenders contend, however, that it is not ‘permanentway material.’ They say that these words so collocated have a technical meaning in the railway world, and include only the rails, sleepers, chairs, and other manufactured articles of the permanent way. This use of the words is spoken to by a number of witnesses of great experience and authority, and I am unable to doubt that the words are frequently so used by railway

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people. The reason for this is probably to be found in the fact that in the making of railways ballast on the one hand and manufactured materials on the other hand are differently treated, the ordinary practice being that the contractor provides the ballast and the railway company the manufactured articles, and thus contracts for construction commonly are to the effect that the company will supply the ‘permanent-way material’ (under an enumeration) and that the contractor must supply the ballast. Whether this is the whole origin of the fact or not, the fact is that in the railway world the words ‘permanentway material' are frequently used in a sense which does not include ballast. On the evidence as a whole, however, it cannot be said that the words are invariably used with this restricted meaning. In the statutory agreement here in question the words used include a partial enumeration, ‘rails, chairs.’ Ballast is not specified. It is a matter of great importance in point of money value. Thus in the present case the charge for ballast, including laying, amounts to £24,344. There follow in the statutory agreement, after the words ‘the expense of the rails, chairs, and other permanent-way material,’ the words ‘and of laying down the same on the surface’ What is the ‘surface'? The pursuers say it is the surface at formation level. The defenders say it is the surface of the superimposed track of ballast. Now as what is being dealt with is the permanent way, and as ballast is admittedly a part of the permanent way, the word ‘surface’ does not seem appropriate to designate the ballast. Moreover, the sleepers, rails, chairs, &c., cannot properly be said to be laid down on the ballast, because the upper ballast constitutes packing in which the sleepers are embedded.

It is a broad feature of the statutory arrangement that the defenders are not to pay on the cost of making up the land acquired for the undertaking to formation level. The land was ‘slob land,’ and the cost of making it up into a terra firma was very great. The defenders were freed from any part of this cost. Putting it aside they were to pay on the purchase price of the land and also on the cost of the permanent way, so far at least as regards the rails, sleepers, chairs, &c., and the laying down of the same on the ‘surface.’ It is difficult to find a reason for the view that they were not to pay on the ballast. Ballast is something different from the making up of the land. It is an ordinary item of the permanent way laid down on the surface of the land. It is therefore very difficult to see a ratio on which the defenders should be freed from charge quoad one part of the cost of the permanent way while subjected to charge quoad ultra. I am of opinion that ‘surface’ was here intended to mean the surface of the land—that is to say, formation level—and that the defenders must pay on the ballast. …”

The pursuers reclaimed, and argued—(1) As to the cost of land, this must be taken as the whole sum expended by the pursuers in acquiring the land, and not merely the sum which went into the pocket of the seller, for both the price paid and the expenses of acquisition were necessary to make the land available for their undertaking and for the use of the defenders. “Cost” was used advisedly in the Caledonian Railway Act, 1897 (60 and 61 Vict. cap. cxviii), sec. 12, to mean something different from “purchase money,” which was the term used in the Caledonian Railway (Grangemouth Harbour) Act 1876 (39 and 40 Vict. cap. xlvii), sec. 25. (2) As to ballast, it was included in permanent way material. That included everything laid upon the surface. The question depended on the construction of the Acts, not upon the evidence, but, in any event, the evidence showed that ballast was a permanent-way material. In the Caledonian Railway Act 1876 permanent-way material was the genus, and rails and chairs were examples of the things included under this genus. It so happened that these were manufactured articles, but it did not follow that other things not manufactured did not fall under the genus.

Argued for the respondents—(1) As to the cost of land. The Caledonian Railway Act 1897, section 12, brought in the scheme of payment of the Act of 1876, and “cost” in the latter Act was clearly equivalent to “purchase money” in the former. (2) As to ballast, “permanent-way material” did not include ballast. It was a technical term of railway parlance, and in its technical sense did not include ballast, as was shown by the evidence. The object of the section was to limit the number of things below the surface of the rails which were to be paid for, and the use of the words “rails” and “chairs” showed that the genus of the things to be included was manufactured articles. If permanent-way material meant the things laid upon the surface, the surface was the surface including ballast.

At advising—