17 June 1925
Reavis |
v. |
Clan Line Steamers. |
The pursuer's material averments with regard to this portion of her claim [i.e., the claim for loss of profits from the orchestra] are contained in conds. 3 and 4. She says that the orchestra was recruited with much trouble from coloured artistes in the United States and West Indies for the purpose of providing a particular type of musical and vocal entertainment. The first performance was given in America in 1918, where the orchestra was a great success. In 1919 it came to London and performed there and in other parts of the United Kingdom, where large profits were earned both from the performances and from the sale of copyright music popularised thereby. This continued till the disaster in October 1921, at which date contracts were booked ahead for several years and a world tour was in course of being arranged. The orchestra was an organisation of an exceptional character in respect (1) of the unique type of performance which it gave, (2) of the limited and distant sources from which vacancies could be filled up, and (3) of its success and world-wide reputation. It was accordingly a profit-yielding asset of great value, and at the date of the disaster the pursuer was sole proprietrix of this asset. At the date of the disaster the members were under contracts to perform for various periods, at the termination of each of which the pursuer had the option of re-engagement for varying periods.
It is further averred that prior to the disaster the personnel of the orchestra numbered thirty-one. As a result of the disaster eight were drowned, five were immediately incapacitated, and of the remaining eighteen many were not fit to perform efficiently, and from time to time gave up the attempt. The result was that while, after the lapse of a week, the orchestra continued its tour, the attendance of the public dwindled and losses of profit were incurred by the pursuer which amounted up to the last week of December 1921 to £7500. At that date the pursuer was compelled to cancel contracts for future performances, and to disband the orchestra. She had neither the numbers nor the particular artistes necessary to fulfil the contracts; and there was not available a sufficient number of the type of coloured performers necessary to take the places of those who were drowned or disabled. The valuable profit-yielding asset owned by the pursuer was thus destroyed, and the future profits thereof lost through the defenders' negligence.
It appears to me that these averments contain a good deal of somewhat inaccurate phraseology. The pursuer did not and could not “own” the orchestra as she might have owned a troup of performing animals. She carried on the business of supplying music through the services of musicians whom she hired, just in the same way as any other business is carried on which requires the services of skilled servants. In this case the servants were exceptionally difficult to replace, partly for geographical reasons and partly because the nature of the performances required concerted action. But that does not create any distinction in kind from other businesses. Indeed there are few businesses of any complexity in which some person is not irreplaceable in the sense that no person of his particular knowledge and experience is obtainable; and there are still fewer businesses which would not suffer materially from the loss of a large number of the members of its staff at one time. In this case it is said that the loss of certain members of the staff was so serious that it brought the business to an end. But I fail to see any legal ground of distinction between the case where such a loss merely injures a business and the case where the loss destroys it. The right to maintain an action of damages cannot depend on the degree of injury suffered. In this view the question comes to be a quite general one, viz., whether the law of Scotland recognises any right of action by an employer for the loss of services of an employee against a person who negligently causes the death or incapacity of the employee?
In my opinion the law of Scotland recognises no such right. It recognises a right of action on the part of an employer against a person who entices a servant to break his contract of service—Couper & Sons v. Macfarlane, 6 R. 683—or who harbours a servant in the knowledge that he has deserted a master whom he was bound to serve—Rose Street Foundry and Engineering Co. v. Lewis & Sons, 1917 S. C. 341—but there is no instance in the books of a right of action sustained at the instance of a master against a person who, by negligently killing or injuring the servant, has thereby deprived the master of his services. Indeed there is very definite authority to the contrary. The point directly arose in Allan v Barclay (1864) 2 M 873, 2 Macph 873, which was reported to the Inner House on the adjustment of issues. In his report the Lord Ordinary (Lord Kinloch), after pointing out the distinction between such a case and the malicious enticing away of a servant, said that he “inclines strongly to the opinion that a claim such as that now made is not sanctioned by our law. … The grand rule on the subject of damages is, that none can be claimed except such as naturally and directly arise out of the wrong done; and such, therefore, as may reasonably be supposed to have been in the view of the wrongdoer. Tried by this test, the present claim appears to fail.” The Inner House threw out the action on the ground that there were no relevant averments either of the contract of service or of the damage sustained by the pursuer, and the Judges did not therefore discuss the general point raised. But the Lord President significantly observed that it appeared to be “a new proposal in the law of Scotland,” and Lord Deas that “there is no instance of an action of this kind.”
Counsel for the pursuer relied strongly on certain passages in Lord Fraser's book on Master and Servant. In the chapter dealing with “liability of third persons for injuries to the master's property in the labour of his servant” that learned writer lays it down that “a master is entitled to damages from anyone who injures his servant in such a manner as to prevent him from discharging his duty,” and adds: “Actions of this kind have been much more frequent in England than here” (3rd ed., p. 311). Proceeding to discuss the question “Does action lie where servant is killed,” he refers to Osborn v. Gillett, (1873) L. R., 8 Ex. 88, as deciding that in England a master cannot maintain an action for injuries which cause the immediate death of his servant; but points out that the decision was due to a special doctrine of English law which excludes claims for the wrongfully caused death of another except in the cases permitted by Lord Campbell's Act, and adds that “there is no reason in Scotland for making a special exception from the general rule of law, by refusing compensation to a master on the death of his servant. And, accordingly, it is matter of daily practice, in cases similar to Osborn v. Gillett, to take into account the pursuer's injury in consequence of loss of services” (3rd ed., p. 313).
I must respectfully disagree with the views expressed in these passages. The authorities quoted are wholly English, and Allan v. Barclay, the only Scots case on the subject, seems unfortunately to have escaped the learned author's notice. If that case had been before him he would probably have revised his view that actions of such a kind were known in Scots practice. There still of course remains the argument from analogy with English law which, while it excludes claims for loss of services in the case of death, admits such claims in the case of injury to servants. If Lord Fraser's views were well founded that the admission of claims in respect of injury were in accordance with a general rule of law, and that the exclusion of claims in the case of death was an exception due to a peculiar English doctrine, there might be considerable force in the argument for adopting the general rule and rejecting the special exception. But the historical development of the English law on the subject has recently been the subject of elaborate and authoritative exposition by Lord Parker and Lord Sumner in Admiralty Commissioners v. S.S. “America, ” [1917] A. C. 38. The result of the inquiry is summed up in the following passage from the opinion of Lord Sumner (p. 60), “What is anomalous about the action per quod servitium amisit is not that it does not extend to the loss of service in the event of the servant being killed, but that it should exist at all. It appears to be a survival from the time when service was a status.” The argument that in Scotland a remedy should be granted for loss of services through the negligence of a third party because such a remedy is allowed in England, and that the measure of the remedy should exceed the measure of the remedy allowed in England, though the English rule which gives a limited remedy is admitted to be an anomalous survival, is not one which commends itself to my judgment.
On the other hand, I think that the view expressed by Lord Kinloch in Allan v. Barclay is confirmed by subsequent cases with regard to claims for the death of relatives—Eisten v. North British Railway Co., 8 Macph. 980; Clarke v. Carfin Coal Co., 18 R. (H. L.) 63; Darling v. Gray & Sons, 19 R. (H. L.) 31. The effect of these cases is not only to limit such claims to those between whom and the deceased there was a mutual obligation of support, but to treat the rule which allows such claims as arbitrary and artificial. In the words of Lord Watson in Clarke's case, “the rule does not rest on any definite principle, capable of extension to other cases which may seem to be analogous, but constitutes an arbitrary exception from the general law which excludes all such actions founded in inveterate custom, and having no other ratio to support it.” If the existence of a right of support, coupled with the fact of support, from a person whose death is caused by negligence is incapable upon any definite principle of founding a right of action against the person responsible for the death, it is difficult to see how there can be any definite principle upon which to found a right of action for the loss of services caused by death in similar circumstances.
The general law to which Lord Watson alludes as excluding the class of actions which he was considering is, I apprehend, just this—that the sole right of action for injuries to the person belongs to the individual injured, just as the sole right of action for injuries to property belongs to those who have legal rights therein. The topic is instructively discussed by Lord Penzance in Simpson & Co. v. Thomson, 5 R. (H. L.) 40, at p. 46. The particular point involved was whether insurers of a vessel were entitled to claim damages arising from a collision in circumstances where the owner himself could not have done so; and, in discussing the argument put forward by the insurers, Lord Penzance points out the endless litigation which would arise if rights of action were allowed to those who by contract had an indirect interest in the lives or services of persons or in the preservation of property, and negatives the existence of any such rights of action. The ratio of this view I take to be that the injurious consequences arising to such persons through injury to, or destruction of, life or property are indirect or remote damages which the law will not allow. To state the matter in another way, liability for damage must be founded on the breach of a duty owed to the person suffering the loss—Clelland v. Robb, 1911 S. C. 253—and in such cases there is no duty owed to the persons claiming damages. Applying the general rule to the present case, I think that shipowners have a duty to carry their own passengers safely and to avoid injuring passengers on other ships; but they have no duty to persons who may by contract or otherwise be interested in the safety of such passengers.
It is to be noted that the pursuer's claim as stated is not limited to the periods to which her contracts with the members of the orchestra extended. Perhaps for this reason both in the pleadings and in argument her counsel stressed the contention that she was claiming damage for the loss of a profit-yielding asset as the direct result of the defenders' negligence. If this were so, she has not, as I have already pointed out, framed her conclusions in such a way as to recover such damage. But, in my opinion, that mode of statement is plainly wrong. I assume that she suffered personal injury, and as part of that injury she will be entitled to claim for any temporary or permanent loss of earning power. I assume also that she lost valuable music, and as part of that loss she will be entitled to claim for loss of profit which would have been derived from sale of the copyright. Beyond that the only direct result of the collision was the death or injury of persons who were useful to her, and for such deaths and injuries she has, in my opinion, no title to sue.
Various other authorities were quoted on the recent development of the law of damages in cases of mental shock—Ross v. Glasgow Corporation, 1919 S. C. 174; Brown v. Glasgow Corporation, 1922 S. C. 527; Hambrook v. Stokes Brothers, [1925] 1 K. B. 141—and on the doctrine of remoteness of damage—Weld-Blundell v. Stephens, [1920] A. C. 956; In re Polemis and Furness, Withy, & Co., [1921] 3 K. B. 560—but they do not appear to me to bear materially upon the present case.
I shall accordingly appoint the pursuer to sist a mandatary; and on that being done, I shall repel [certain pleas in law for the Laird Line]; sustain the fourth plea in law for the defenders the Clan Line, and the second plea in law for the defenders the Laird Line, quoad the damages claimed in cond. 4; and quoad ultra allow a proof.
The motion is opposed by the defenders on three grounds. The first is that the interlocutor has become final, because, being an interlocutor allowing proof, it has not been reclaimed against within six days from its date (Court of Session Act, 1868, secs. 27, 28; C. A. S., C. ii. 4, 5). There is, of course, no doubt that the interlocutor imports an appointment of proof, and has to that extent become final. The question is whether the finality applies to the whole interlocutor, or whether, on the assumption that it also disposes in part of the merits of the cause, it may not still be reclaimed against to that extent.
It is curious that this question seems never to have been judicially raised and decided. If the contention of the defenders were well founded, the present practice of sustaining or repelling pleas involving a decision in part of the merits of the case and allowing a proof in the same interlocutor would certainly have to be reconsidered; because it would involve a denial to one or other of the parties of the time for reclaiming which the statutes clearly intended that they should have in regard to decisions on the merits. It would also impose a very serious restriction on the statutory effect of a reclaiming note in submitting to the review of the Inner House the whole of the prior interlocutors of the Lord Ordinary of whatever date (1868 Act, sec. 52).
In my opinion the contention of the defenders is not well founded. Section 27 of the Court of Session Act, 1868, as altered by the Act of Sederunt of 1870 (C. A. S., C. ii. 4, subsec. (c)) provides that, if parties are at variance as to proof, the Lord Ordinary may, after a hearing in the Procedure Roll, either appoint proof to be taken, or dispose of such pleas on the record as he thinks ought to be disposed of at that stage; and the Act of Sederunt then goes on to enact (C. A. S., C. ii. 5) that “the provisions of the 28th section of the Court of Session Act 1868” (which declares the finality of interlocutors under the preceding section not reclaimed against in six days) “shall apply to all the interlocutors of the Lord Ordinary referred to in the foregoing section, so far as these import an appointment of proof, or a refusal or postponement of the same.” It appears to me that the Act of Sederunt draws a distinction between disposing of pleas and appointing proof to be taken, and that, if an interlocutor includes the exercise of both these functions, finality only applies to the part dealing with proof. The defenders founded on the words in C. A. S., C. ii. 5, “so far as these import an appointment of proof, or a refusal or postponement of the same,” and argued that, in partially sustaining the defenders' pleas to relevancy, the interlocutor now in question had operated as a refusal of proof to the pursuer. Upon the same reasoning, if the interlocutor had wholly sustained the defenders' pleas to relevancy and dismissed the action, it would have operated as a total refusal of proof to the pursuer, and would therefore have become final in six days. I do not think this reasoning is sound. Just because of the finality declared by section 28 as amended, the Court has construed it very strictly, even going so far as to hold that an interlocutor allowing proof before answer is not a six days interlocutor—Christie's Trustees v. Muirhead, 7 Macph. 1001, 6 S. L. R. 642.
The defenders' next point is that the interlocutor did not dispose in part of the merits of the cause, because it did not make a finding with regard to expenses. In construing sections 53 and 54 of the Court of Session Act, 1868, which provide that, except under section 28, a reclaiming note cannot be presented without leave until the whole cause has been decided in the Outer House, and particularly define what is meant by a decision of the whole cause, it has been held that the statutory definition is not satisfied unless the question of expenses is decided—Baird v. Barton, 9 R. 970; Burns v. Waddell & Son, 24 R. 325; Caledonian Railway Co. v. Corporation of Glasgow, 2 F. 871. The defenders argued that the same limitation should be applied to the construction of the terms “interlocutors disposing … in part of the merits of the cause” in section 11 of the Court of Session Act of 1850. No authority was cited in support of the argument, and in my opinion it is not well founded.
The last point was that, assuming the interlocutor to be one which disposed in part of the merits of the cause, leave to reclaim must be obtained within ten days of its date. I think that the contrary was decided in Fraser v. Fraser, 10 Macph. 420.
The interlocutor reclaimed against is one dealing with certain pleas stated for the defenders against the relevancy of the pursuer's condescendence. The Lord Ordinary sustained those pleas quoad a particular article of that condescendence. The article in question constituted a part only of the averments on which one of the pursuer's conclusions for a particular sum of damages is founded. Quoad ultra the Lord Ordinary allowed a proof.
The interlocutor reclaimed against was dated 14th May 1925. The Lord Ordinary granted leave to reclaim on 30th May 1925; and the reclaiming note was presented on 3rd June 1925. It will be observed that the reclaiming note was presented within twenty-one days from the date of the interlocutor reclaimed against, and also within ten days of the granting of leave.
By section 18 of the Court of Session Act, 1825 (6 Geo. IV. cap. 120), as modified by section 11 of the Court of Session Act, 1850 (13 and 14 Vict. cap. 36), and as further modified by section 54 of the Court of Session Act, 1868 (31 and 32 Vict. cap. 100), a reclaiming note is competent against an interlocutor disposing in part of the merits of a cause-within twenty-one days from its date, provided that leave to reclaim has been got from the Lord Ordinary and that the reclaiming note is presented within ten days from the date when such leave was granted—Fraser v. Fraser, (1872) 10 Macph. 420. When the case was opened I was disposed to doubt whether an interlocutor (such as the present) which does not actually dispose of the conclusions of the summons to any extent is an interlocutor disposing in part of the merits of the cause within the meaning of the enactments referred to. But the cases quoted to us (and particularly the collection of cases to be found in the notes on page 295 of the late Mr Mackay's Manual of Practice) convince me that my doubts were unfounded, and that the interlocutor reclaimed against, although it does no more than sustain a plea to relevancy as regards a part of the grounds on which one of the pursuer's conclusions for reparation is founded, is an interlocutor disposing in part of the merits of the cause within the meaning of those enactments.
Further, by section 28 of the Court of Session Act, 1868, and in terms of the provisions of C. A. S., C. ii. 4 and 5, a reclaiming note against an interlocutor allowing, or refusing, or postponing, proof is competent without leave within six days of its date. The interlocutor now reclaimed against is an interlocutor refusing proof on a part of the pursuer's case, and quoad ultra allowing proof.
The interlocutor reclaimed against thus falls equally within both descriptions of reclaimable interlocutors referred to in the two immediately preceding paragraphs of this opinion. I am not favourable to the view that, in considering whether, in these circumstances, a reclaiming note is competent, the interlocutor against which it is presented should be subjected to a process of dissection, and particularly when the subject-matters dealt with in it are so closely connected, and indeed so indissolubly interwoven, as the sustaining or repelling of a plea to relevancy and the consequent restriction or allowance of proof. It seems to me that the effect of the two sets of statutory provisions is to allow two opportunities of reclaiming against such an interlocutor as we have here—one in six days without leave, and the other subject to the double limitation that the reclaiming note is presented within twenty-one days of the date of the interlocutor reclaimed against and also within ten days of the Lord Ordinary's grant of leave. I think that, in these circumstances, a reclaiming note which satisfies either the one or the other of the two sets of statutory provisions is competent. I should add that it follows—in my opinion—that the reclaiming note in the present case will cover all the grounds of appeal which could have been pleaded under a reclaiming note taken within six days without leave.
I move your Lordships to sustain the competency of the reclaiming note.
The present question refers to the disallowance by the Lord Ordinary of proof with regard to the averments contained in article 4 of the pursuer's condescendence—quoad ultra the case is sent to proof. Inquiry therefore will be made under the Lord Ordinary's interlocutor into all the items of damage which the pursuer alleges, with the exception of the particular item which is averred in condescendence 4.
It is common ground that the pursuer is entitled to recover damages for any personal injury she received, and for any loss of property—luggage, clothing, and so forth—caused by the collision. It is also common ground that the pursuer is entitled to recover (as the direct and natural consequence of personal injury) any loss which she can prove to have arisen in consequence of her disability—permanent or temporary—to carry on her business as a manager of orchestral and other concerts. She avers loss under all these heads, and the proof allowed by the Lord Ordinary covers all of them.
But in the 4th article of the condescendence the pursuer tables a further ground of damage. She explains that, at the time of the collision, she was running a coloured orchestra or concert company, the members of which were travelling with her in the s.s. “Rowan” in order to fulfil a professional engagement in Dublin. The company performed in various places, and was a profitable concern. Unfortunately a number of the performers lost their lives in the collision, while others received personal injuries; and as the result the concert company was unable to carry on and had to be disbanded, and the profitable enterprise of which the company was the personnel was thus lost. The pursuer's case is (1) that the services of the members of the company were secured to her by contract of service for a more or less considerable time; (2) that her interest in those services was a valuable asset of hers; and (3) that the value of that asset was destroyed by the collision. She accordingly claims its estimated value as an item of damage.
The question thus raised is a broad one. It is whether—in the law of Scotland—when a servant is injured by the fault of a third party, such third party incurs liability, not merely to the servant, but also to the servant's master, in respect that, during the servant's disablement (or it may be in consequence of the servant's death), the master is deprived of his services. It appears that a claim for the loss of services by a master in the case of an injured servant is not without recognition in the law of England, although a similar claim is not recognised if the servant loses his life in consequence of the injury. Thus, the loss of services is by the law of England a ground of action by a father or by an employer in the case of the seduction of a daughter or servant, although the daughter or servant has no right of action in the same circumstances—see Rosses v. H. H. Sir Bhagvat Sinhjee, (1891) 19 R. 31. But there is no example in Scotland of any case in which a parallel principle has been laid down or accepted. With us, a claim for the loss of the services of a daughter or of a servant is unknown. In the only reported case in which such a claim has been submitted to the Court in Scotland it was rejected, and its unprecedented character remarked upon—Allan v. Barclay, 2 Macph. 873. The modified form of the Civil Law actio injuriarum—Inst. IV. iv. 2 and 3—which has found its way into the law of Scotland—Eisten v. North British Railway Co., (1870) 8 Macph. 980—is the nearest analogy in the custom of our own country to such an action. For it is partly founded on the loss of a legal obligation of support, which may be said to present a certain analogy to the loss of services. But this action is competent only in the case of fatal accidents, and has no application whatever to the relation of master and servant.
There is, however, a passage in the late Lord Fraser's work on Master and Servant in which he says that, while actions for loss of services are much more frequent in England than they are in Scotland, they are none the less in conformity with the principles of Scots law. Indeed, in a later passage, he refers to such actions (if I do not misunderstand him) as being in daily use in this country. With all possible respect, I cannot resist the impression that some error must have crept into the text of both passages; for there is no trace in the records of past practice of actions of the sort—unless indeed Allan v. Barclay . It is, no doubt, another question whether such an action would (as Lord Fraser says) be consistent with the principles of the law of Scotland. But I confess myself at a loss to understand how it could be so, and neither of the passages referred to helps in overcoming the difficulty. In the law of Scotland there is no such thing as a right or interest, in the nature of property, in the services of another; and a person claiming reparation for injury by another person's fault cannot go beyond the effects of such injury on his own person, his own health, his own business or other capabilities, and his own property. In Simpson & Co. v. Thomson, Lord Penzance says: “The principle involved seems to me to be this, that where damage is done by a wrongdoer to a chattel, not only the owner of that chattel, but all those who … have secured to themselves advantages which are rendered less beneficial by the damage done to the chattel, have a right of action against the wrongdoer, although they have no immediate or reversionary property in the chattel … But if this be true as to injuries done to chattels it would seem to be equally so as to injuries to the person. … An actor or singer bound for a term to a manager of a theatre is disabled by the wrongful act of a third person, to the serious loss of the manager: can the manager recover damages for that loss from the wrongdoer? Such instances might be indefinitely multiplied, giving rise to rights of action which in modern communities, where every complexity of mutual relation is daily created by contract, might be both numerous and novel.” Lord Penzance went on to negative the principle which produced such startling results; and it will be seen that he prefigured the claim made in the present case. Counsel for the pursuer argued to us that the pursuer's claim was within the principle under which an action of reparation is allowed against anyone who entices a servant away from his master, or against a person who harbours a servant who has broken his contract with his master and remains away from him. The reason, I apprehend, why there is an action for enticing away a servant is this, that the servant may not leave his master except after due notice otherwise than by a breach of contract, and knowingly and designedly to induce the servant to break his contract, to the injury of the master's interest in his services—not, be it observed, an interest in the nature of property—is a malicious wrong—Couper & Sons v. Macfarlane, (1879) 6 R. 683, per Lord Ormidale, at p. 690, and Lord Gifford, at p. 693.
The failure of the defenders to perform to the pursuer the duty they owed to her—namely, to navigate their vessels with due regard to the safety of travellers by sea—must not be confounded with their failure to perform to the individual members of the concert company a similar duty. Those members will, like the pursuer, have a right of action in respect of their own personal injuries and losses. But I respectfully agree with Lord Kinloch's observation in Allan v. Barclay : “The grand rule on the subject of damages is, that none can be claimed except such as naturally and directly arise out of the wrong done; and such, therefore, as may reasonably be supposed to have been in the view of the wrongdoer … The personal injuries of the individual himself will be properly held to have been in the contemplation of the wrongdoer. But he cannot be held bound to have surmised the secondary injuries done to all holding relations with the individual, whether that of a master, or any other.”
I have assumed that the relation of master and servant existed between the pursuer and the members of her company. But I doubt whether the relation between the manager of a concert or theatrical company and the professional people—often of very high qualifications—composing the company is, in law, that of master and servants. We know, however, nothing of the terms or duration of the contracts or engagements subsisting between the pursuer and the members of her company.
In the general reasoning of the Lord Ordinary's opinion I concur, and I think he arrived at the right result.
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