Scottish Court of Session Decisions

The Ministry of Transport Act 1919 (9 and 10 Geo. V, cap. 50) enacts, sec. 3 (1) ( c)—“The directors and other persons concerned with the management, and officers and servants of any undertaking of the whole or part of which, or of the plant whereof, possession is retained or taken, shall obey the directions of the Minister as to the user thereof, and any directions of the Minister in relation to the undertaking or part or plant thereof of which possession is retained or taken—(1) as to rates, fares, tolls, dues, and charges to be charged, subject, however, to the provisions hereinafter contained respecting references to the advisory committee established for advising as to directions on the matters aforesaid. … ( e) In the case of any undertaking of which possession is retained or taken by the Minister as aforesaid, any rates, fares, tolls, dues, and other charges directed by the Minister shall be deemed to be reasonable, and may, notwithstanding any agreement or statutory provisions limiting the amount of such charges or increases therein, be charged. …”

The North British Railway Company, pursuers, brought an action against the Steel Company of Scotland, Limited, defenders, for payment of £64, 11s. 6d. as charges for the detention of waggons placed by the pursuers at the disposal of the defenders for use at their private siding.

The parties averred, inter alia—“(Cond. 3) By virtue of the Railway Rates and Charges, No. 25 (North British Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict. cap. lxiii), and the Schedule of Maximum Rates and Charges contained therein, the pursuers are authorised to charge, inter alia, a reasonable sum by way of addition to the tonnage rate for the detention by the defenders of trucks or waggons before or after conveyance beyond such period as shall be reasonably necessary for enabling the defenders to give or take delivery of the merchandise. ( Ans. 3) The Act and schedule mentioned are referred to for their terms. (Cond. 4) Under the powers of the Ministry of Transport Act 1919 (9 and 10 Geo. V, cap. 50) the Minister of Transport, by intimation to the pursuers dated 20th December 1919, directed that in respect of the undertaking of the pursuers the charges set out in the schedule to the direction shall as from the 1st day of January 1920 be charged for detention of railway companies' waggons and sheets beyond the respective free periods defined in the said schedule. The said schedule sets forth, inter alia, the charges to be made for the detention of waggons and sheets before and after transit over the railway, and also the free periods allowed for loading or unloading merchandise, including coal, coke, and patent fuel. A copy of the public notice containing the said schedule is herewith produced and referred to. The explanations and averments in answer, so far as not coinciding herewith, are denied under reference to the statutes, direction, notice, and schedule mentioned. ( Ans. 4) The Ministry of Transport Act 1919 (9 and 10 Geo. V, c. 50) and the said intimation or direction by the Minister of Transport and the said public notice and schedule are referred to for their terms. Quoad ultra denied. Explained that the said direction and schedule purport ( a) to fix the free periods allowed to the defenders for giving and taking delivery of merchandise before and after conveyance, and ( b) to prescribe the charges to be made for detention of waggons beyond said free periods. Explained that the Ministry of Transport Act confers no power on the Ministry of Transport to prescribe or interfere with the facilities to which the defenders are entitled under the Act of Parliament applicable to the pursuers' undertaking, and in particular to fix the time reasonably necessary for giving and taking delivery of merchandise before and after conveyance. Further explained that in terms of the schedule to the Railway Rates and Charges No. 25 (North British Railway) Order Confirmation Act 1892, the defenders have a statutory right of detention of railway waggons for uses incidental to the conveyance of the merchandise beyond the periods reasonably required for giving and taking delivery of the merchandise. Said statutory right of detention is deemed to be a special service rendered to the trader in respect of which a reasonable charge is exigible. The charges contained in the said direction and Schedule of the Minister of Transport are unreasonable and excessive, and are not fixed with the view of assessing a reasonable remuneration for such special service. In effect they deprive the defenders of their statutory right to the special service conferred by the foresaid Act. Said charges

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were not fixed in good faith as representing a fair reward for said special service of detention, but are penal in character and were framed with a view to defeating the defenders' statutory rights. The said direction and Schedule are ultra vires (1) in so far as they prescribe the periods reasonably necessary for giving and taking delivery of merchandise before and after conveyance, and (2) in so far as the said charges are in excess of what is a reasonable return for the special service of detention. (Cond. 5) Between 1st January and 31st May 1920 certain waggons owned by the pursuers, or which they were for the time being entitled to use, were placed by the pursuers at the disposal of the defenders at their Blochairn Siding for the purpose of unloading merchandise. Particulars regarding (1) the said waggons, (2) the periods of time during which they were placed at the disposal of the defenders, and (3) the sums charged by the pursuers against the defenders in respect of the detention of the said waggons, are contained in an account which will be produced in the course of the process. A copy of the said account has already been furnished to the defenders. The waggons in question were at the disposal of the defenders at their said siding during the periods of time shown in the said account, and the charges per day set forth in the said account as applicable to the particular waggons in question are the charges per day set forth in the beforementioned schedule. The explanation in answer is denied. ( Ans. 5) Admitted that between 1st January and 31st May 1920 certain waggons were placed by the pursuers at the disposal of the defenders at their said siding for the purpose of loading or unloading merchandise. The account mentioned is referred to for its terms. Explained that the said waggons were not detained beyond the time reasonably necessary for giving or taking delivery of the merchandise carried over pursuers' railway. Quoad ultra admitted. (Cond. 6) The foresaid account, amounting to £64, 11s. 6d., is made up on the footing that the charges which the pursuers are entitled to make against the defenders for the detention of any waggons commence to run at the expiry of the periods of time set forth in the said schedule. ( Ans. 6) Believed to be true that the account amounting to £64, 11s. 6d. is made up on the footing that the charges commenced to run at the expiry of the periods of time set forth in the said schedule. (Cond. 7) The defenders dispute that the charges which the pursuers are entitled to make against them in respect of the detention of waggons and the free days are those set forth in the said schedule. ( Ans. 7) Admitted. Reference is made to answer 4. (Cond. 8) The defenders do not raise any objection to the pursuers' claim on the question of the fact of detention, but only on the question of the amount per day charged for detention and the duration of the free time. The defenders also claim that the direction of the minister is invalid, and that the question in dispute falls to be determined by a court of law. ( Ans. 8) Admitted. Reference is made to answer 4.”

The pursuers, inter alia, pleaded—“1. The pursuers being entitled to make the charges against the defenders directed by the Minister of Transport in respect of the detention by the defenders of any waggons owned by the pursuers, or which for the time being they are entitled to use beyond the periods set forth in the schedule issued by the minister, decree should be granted as concluded for. 3. The defences being irrelevant, decree should be granted de plano.”

The defenders pleaded—“1. The pursuers' averments being irrelevant, the action should be dismissed. 2. No title to sue, in respect it was ultra vires the Minister of Transport ( a) to prescribe, or in any event to prescribe without reference to reasonable requirements, the time to be held as necessary for giving and taking delivery of merchandise before and after conveyance; ( b) to impose charges, or in any event to impose charges calculated without reference to the reasonable remuneration for service. 3. The said direction and relative schedule of the Minister of Transport in so far as ( a) it purports to prescribe the time to be held as necessary for giving and taking delivery of merchandise before and after conveyance, ( b) it imposes charges for services, being unauthorised by the Ministry of Transport Act 1919, and ultra vires and invalid, the defender should be assoilzied.”

On 7th December 1920 the Lord Ordinary ( Sands) pronounced the following interlocutor—“Repels plea 2 ( b) for the defenders: Quoad ultra, Finds that the defenders are entitled under the Railway Rates and Charges Act 1892, Schedule (5), to have any difference in regard to the time reasonably necessary before a charge for detention of waggons begins to run determined by arbitration: Continues the cause and grants leave to reclaim.”

Opinion.—“Under section 3 ( c) of the Ministry of Transport Act 1919 the directors and other officials of railway companies are bound to obey the directions of the Minister, inter alia (1) as to the rates, fares, tolls, dues, and charges to be charged. There is nothing in the provision, taken by itself, that affects the rights of traders. Under former arrangements subordinate officials were bound to obey the directions of the board of directors as to the rates to be charged, and this provision seems simply to put the Minister in his turn over the directors. It does not appear to me to empower the Minister to direct the making of charges in excess of statutory maxima any more than the directors had such power. In other words, it is quite consistent with observation, as in a question with traders, of the previously existing rules as to the fixing of maximum rates. It is otherwise, however, when we turn to sub-section ( e). That subsection provides—‘In the case of any undertaking of which possession is retained or taken by the Minister as aforesaid any rates, fares, tolls, dues, and other charges directed by the Minister shall be deemed to be reasonable, and may, notwithstanding any agreement or statutory provisions limiting the amount of such charges or

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increases therein, be charged in respect of any undertaking during the period for which the Minister retains possession of such undertaking, and for a further period of eighteen months after the expiration of the said period, or until fresh provision shall be made by parliament with regard to the amount of any such rates, fares, tolls, dues, and other charges, whichever shall first happen.’

I heard a great deal of ingenious argument upon this sub-section on the part of the defenders, but they failed to satisfy me that the sub-section can be construed otherwise than according to its prima facie intendment. The Minister of Transport has, for the time being, complete authority as to the fixing of rates irrespective altogether of existing statutory limitations. Nor can any question be raised in a court of law as to the reasonability of such charges or the arbitrary or non-arbitrary manner in which the table of rates is framed.

This does not, however, exhaust the question between the parties.

Under the Railway Rates and Charges Act, No. 25, 1892 (schedule), rates and charges for goods are authorised under three heads—carriage, terminal charges, and extra services, one of which is the ‘detention of trucks beyond such time as shall be reasonably necessary,’ &c.

Any difference arising in respect of the latter is to be determined by an arbitrator to be appointed by the Board of Trade (5). Under this provision two questions might emerge for arbitration—(1) What is the reasonable rate per day for detention? (2) What in relation to the particular traffic is the time reasonably necessary for unloading and delivery of waggons?

These two questions are quite separable, and, as I understand, disputes have in the past arisen in regard to the one where the other was not at all implicated.

The Minister of Transport claims power under section 3 of the 1919 Act to supersede the right of the traders to arbitration under both heads.

If the Act of 1919 were the beginning of things as regards legislation it might be that the general power to fix rates, fares, tolls, dues, and other charges conferred upon the Minister might be held to include a power not merely to fix the rate of demurrage but also to fix the period from which this rate should run. But the statute of 1892 is not repealed. It is only affected in this way that the order of the Minister is to override ‘any agreement or statutory provisions limiting the amount of such charges.’ The statutes must be read together. Full effect must still be given to the older statute where it does not clearly conflict with the later one. It appears to me that the statutory right of the Minister under the later Act is satisfied if he has full power to prescribe the rate of demurrage to be charged in respect of the detention of waggons beyond such period as shall be reasonably necessary, and that the statutory right of the trader to have this period determined by arbitration is not inconsistent with the powers conferred upon the Minister. To put it more generally, it does not appear to me to be necessary, particularly in view of the temporary character of the Act, to construe the sub-section as empowering the Minister simply to wipe out the elaborate and detailed provisions and safeguards of the schedule to the Act of 1892 and to substitute a new code for the statutory one. The provisions of the sub-section are satisfied if as regards each detail he has power to fix the amount of the rate. It is the ‘limitation of the amounts’ that the Minister is authorised to override. The Minister, for example, may fix what rate he thinks proper for conveyance, but he cannot override the statutory provisions as to what that rate includes, for that is not a provision ‘limiting the amount of a rate.’ It may be said perhaps by the defenders that the provision in regard to the amount to be paid in respect of the detention of waggons does not limit the amount of a rate. But it appears to limit the amount to what an arbiter thinks reasonable; whereas under the 1919 Act it appears to be fixed at what the Minister of Transport thinks reasonable.

I shall accordingly repel plea 2 ( b) for the defenders; quoad ultra find that the defenders are entitled under the Railway Rates and Charges Act 1892, Schedule (5), to have any difference in regard to the time reasonably necessary before a charge for detention of waggons begins to run determined by arbitration; continue the cause and grant leave to reclaim.”

The pursuers reclaimed, and argued—The pursuers were entitled to decree de plano. The Minister of Transport's order was intra vires—Ministry of Transport Act 1919 (9 and 10 Geo. V, c. 50), section 3 ( c) and ( e). By section 3 ( f) certain limitations were put to the Minister's powers with regard to the matters therein specified, e.g., the granting of undue preferences, but with regard to the fixing of charges the Minister had an absolute discretion. Charges fixed by him were deemed to be reasonable, section 3 ( e), and accordingly the reasonability of a charge could not be made the subject of arbitration under section 5 of the Railway Rates and Charges No. 25 (North British Railway, &c.) Order Confirmation Act 1892 (55 and 56 Vict., c. 63). In the case of a charge for detention the word “charge” covered not only the rate payable per diem but also the length of the “free time,” because the reasonability of the charge could not be determined unless both factors were taken into consideration.

Argued for the respondents—The Minister's Order was ultra vires. Section 3 ( c) of the Ministry of Transport was not an empowering section. It could not override previous legislation. Moreover it said nothing about “free time” and gave no power to curtail services which traders were entitled to as a statutory right. Section 3 ( e) did give power to alter rates and charges, but it gave no power to interfere with services, and to alter the length of the “free time” was to interfere with services. By altering the free

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time the Minister had really encroached on “conveyance,” and therefore necessarily had imposed a demurrage charge. The word “charge” meant only the rate payable per diem. It did not include the length of the free time. Under the Railway Rates and Charges No. 25 (North British Railway, &c.) Order Confirmation Act 1892, the two elements were always adjudicated on separately. The case of a charter-party was an absolute analogy. In a charter-party the charge was fixed, while the lay-days were left to the rules of the port of discharge. In neither demurrage nor conveyance was “free time” an element— North British Railway Company v. Coltness Iron Company, Limited, 1911, 14 Rly. and Can. Cas. 246, per Lord Mackenzie at p. 259. The defenders were entitled to make a charge for detention, but the charge must be reasonable, and its reasonability could be made the subject of arbitration under section 5 of the Railway Rates and Charges No. 25 (North British Railway, &c.) Order Confirmation Act 1892.

At advising—