United Kingdom House of Lords Decisions

Lord Dunedin.—Mr Wark has set forth very clearly and fairly the points which arise on this appeal, but I cannot say that he has for a moment raised any doubt in my mind that the judgment appealed against is right.

There was a contract in this case for the execution of certain rough-casting. It was a simple contract in these terms:—“I hereby offer to do all the rough-casting pointed out to me “in a certain place for a certain price. That offer was accepted verbally, subject to a certain modification as to the price. After the work was executed, the parties who had got the work done for them complained that it was not in accordance with the contract. This was denied by the contractor; and, as they could not come to agreement, they referred the matter to a practical plasterer as arbiter. The submission I need not quote at any length; it sets forth the offer and the acceptance; it then says in general terms that the second parties are not satisfied with the work done; and then it refers to a practical plasterer, “as sole arbiter all claims, disputes, questions, and differences presently existing between them regarding the rough-casting referred to, and particularly whether the rough-casting referred to has been executed by the first party in accordance with the foresaid offer, which is docqueted and signed by the parties as relative hereto, and in a manner recognised by and according to the custom of the trade, not only as regards material but also as regards quantities, quality, and solidity of the work done, and, further, whether the said work has been executed in a satisfactory and tradesmanlike manner.” The arbiter took up the reference, and he gave an award, and in his award he puts this question to himself. He calls attention to the fact that there was not any actual specification, but that it was left to the question of the custom of the trade, and he says: “Is the work executed according to the custom of the trade? I say it is not. Rough-casting, as it is known to the trade in this district, and as it is specified by architects and measurers, consists of three coats,” and then he finds that in this particular case only two coats had been used, and, accordingly, he says that a certain deduction is to be made from the price. This action has been brought to set aside that award.

As your Lordships are aware, it is very necessary that the objections to awards should be kept within very closely defined limits, and the first thing that is necessary in the condescendence of an action for setting aside an award is that there should be a precise specification of the grounds of challenge, and unless there is such precise specification no proof ought to be allowed. I really cannot look on the record in this case and the interlocutor that immediately follows thereon with any pride. It has always been one of the great boasts of procedure in Scotland that parties are tied to the record. Here the record is a very vague statement. It certainly had a precise enough statement of actual corruption on the part of the arbiter as evidenced by certain words spoken by him—but that statement has disappeared. Now I am not throwing any doubt upon the point that, if there is a precise specification that the arbiter has gone ultra fines compromissi by deciding a question different from that submitted to him, it is possible to go to proof; and it is quite competent to examine the arbiter to find out what he has done. The Canadian case quoted is a very good instance of that, where, the reference to the arbiter having been to find the value, to the man who had to part with it, of certain property compulsorily taken, he decided no such question,

but decided what was the value to the man who took it; and the award, it was held, could not stand. But here, on the point which has really been the principal point argued, it is admitted that there is no record at all, and no amendment was made. The learned counsel quoted the case of Davidson v. Logan, which I quite admit is very like this case in that particular, but I cannot think that the learned Judges in that case did quite right. I am not saying that they did wrong in deciding the question as they did, but, in the matter of amending the record, they found that it was unnecessary to amend it. I should have thought it was absolutely necessary to amend it, if for no other reason than for the purpose of dealing with the expenses in the case. I am quite clear that—however much it may be said that the matter is not too late at the end of the day—yet, if a person comes into Court with a set of allegations all of which fail, and then finally by chance gets out of the arbiter something that enables him to make a case which he had not up to that moment made, it may be that he should be allowed to go on with the case—and I think it is in accordance with our Scottish procedure that he ought to be allowed to go on with it—but most indubitably he ought to pay the whole of the expenses up to that point.

Now we come to what is the point here. It is said that the arbiter did not really direct himself to the true question; and the ground upon which that is put is this, that, whereas what he had to inquire into was what was the custom of the trade, he had directed his attention entirely to what was usually put by architects and surveyors into specifications. It must be remembered that this arbiter was a practical plasterer, and I agree with what fell from my noble and learned friend Lord Shaw in the course of the discussion, that probably he need not have asked for any evidence at all; but, if he was going to hear evidence, I cannot think that it was anything but a most sensible procedure to say, “I will find out and consider what is the custom of the trade by considering what are the usual stipulations that are put in by those who deal with this kind of trade, namely, architects and surveyors.” Therefore, I think that, upon the merits, this complaint entirely fails.

There was only one other matter that was made a ground of attack. It was said that a witness was examined outwith the presence of one of the parties. There are many cases—the leading case is the case of Mitchell v. Cable —where it has been held that you must not examine witnesses on one side and not on the other, and that you must not examine witnesses without the parties being properly represented. But, after all, those cases, one and all of them, are only illustrations of the general principle that the procedure of the arbiter must not violate the principles of essential justice. How can it be said in this instance that the principles of essential justice have been violated? The Lord President has given the circumstances—I need not recall them—but, as a matter of fact, upon this one question whether one material was substituted with the consent of the employers for another, the arbiter decided in favour of the person who is now challenging the award. I think, therefore,

that on this matter he fails; and I move your Lordships that the appeal be dismissed with costs.

Lord Atkinson.—I concur.

Lord Shaw of Dunfermline.—It is only fair to the appellant to state that in the Court below there was a clear and perfectly specific set of allegations which were brought to a focus in the first three pleas in law. These pleas embodied the well-known grounds of reduction of an award.

One has to bear in mind that the arbiter here in a dispute over a plasterer's contract was the most practical of all men, namely, he was a plasterer himself. What is the duty of a practical man in view of the points submitted to him under the minute of reference? The duty resting on such a man is brought out clearly by Lord Halsbury, then Lord Chancellor, in the case of Paterson & Son v. Glasgow Corporation . His Lordship said: “The arbitrator proceeded, I think, substantially in the way that it was intended he should proceed, applying his technical knowledge to technical matters which were within his knowledge, and applying his local knowledge to the particular place where this work was to be done.”

This practical arbiter, vested with that local and practical knowledge to which I have referred, had before him a very simple minute of agreement and reference. He was to settle the difference between the parties, “regarding the rough-casting referred to, and particularly whether the rough-casting referred to has been executed by the first party in accordance with the foresaid offer, and in a manner recognised by and according to the custom of the trade … and further whether the said work has been executed in a satisfactory and tradesmanlike manner.” All these things are matters eminently within his own local and practical knowledge. It was entirely for him to say whether anything further was required, in the shape of evidence, to satisfy his own mind. It was in these circumstances that I made the observation that this man was excessively cautious in having allowed any proof at all. I think he was.

Upon the record the arbiter is charged (1) with having been corrupt, (2) with having gone beyond the boundaries of submission, and (3) with having based his award on a question not in issue between the parties. A proof was allowed of these averments. The proof was led in the Court of Session, and when this arbiter was in the witness-box a certain other fact was elicited not on record and not pleaded to, and on that the Lord Ordinary thought fit to give judgment, a judgment which has been reversed.

I am of opinion that arbiters, or indeed any defenders, in Scotland ought not to be put into that situation. They are put into the witness-box because of averments and pleas which are well-known grounds of reduction, and, as in this case of an arbiter, may involve serious charges upon their capacity and their integrity. Having been subjected to examination and cross-examination, something is elicited from such defenders which suggests a new cause of action altogether, or a different foundation for the action. In such circumstances my view of the law (and I gather it is the view of your Lordships) is that, when that situation arises, the new front thus disclosed is a front which cannot be presented to the Court except upon averments and pleas properly inserted in the record, and upon strict, and it may be severe, conditions as to expenses. Fortunately the terms of arbitration here are wide enough to cover all that was done; no harm was done, that I can see, by the procedure adopted by the arbiter.

So far for the first ground of appeal. The second ground is this. The appellant on one point of the case obtained the award of the arbiter in his favour. But he is not satisfied. He says, “I am a legal purist. My grievance is that I got my favour accorded to me by ways which were not in accordance with my ideas of legal purism.” No Court of justice can entertain arguments of that kind; it would upset the whole foundation of legal remedy. There is nothing to remedy on the concession of the argument.

Had it not been for the admirable address of Mr Wark, I should have said that the case was too clear for argument. Reverting to the point of procedure I desire to say that I do not commit myself to the doctrine laid down in Davidson v. Logan . I question whether it can be squared with that now laid down in this House. I do not commit myself further than to repeat those views as to correct pleading which your Lordship has announced from the Woolsack. I wish to add respectfully that I do not think it would be possible to improve upon the patient and accurate summation of the legal position of this case by the Lord President of the Court of Session.

Lord Phillimore.—I concur with the motion which is proposed by my Lord on the Woolsack, and with the observations which have fallen from the noble and learned Lords who have addressed your Lordships' House.

Lord Blanesburgh.—I concur.