Edinburgh Master Plumbers' Association v Munro
| Jurisdiction | Scotland |
| Judgment Date | 09 March 1928 |
| Date | 09 March 1928 |
| Docket Number | No. 63. |
| Court | Court of Session |
Lord Justice-Clerk (Alness), Lord Ormidale, Lord Hunter, Lord Anderson.
Trade UnionExclusion of actions to enforce rulesClaim by trade union against member based on rules of unionMinute of reference entered into referring claim to arbitrationCompetency of action to enforce arbiter's decreeDirectly enforcingTrade Union Act, 1871 (34 and 35 Vict. cap. 31), sec. 4.
The Trade Union Act, 1871, enacts, by section 4, that nothing in this Act shall enable any Court to entertain any legal proceedings instituted with the object of directly enforcing or recovering damages for the breach of 1. Any agreement between members of a trade union as such, concerning the conditions on which any members shall transact business
The rules of a master plumbers' association provided that members who tendered successfully for contracts should pay a percentage on these contracts to the funds of the association. A claim made by the association against a member in terms of the rules was disputed by him, and a minute of reference was entered into by the parties referring the matter to arbitration, and agreeing to abide by and implement the arbiter's decree, and consenting to registration thereof for preservation and execution. The arbiter decerned in favour of the association. Thereafter the member was sequestrated, and the association, founding on the decree-arbitral, lodged a claim in the sequestration, which his trustee in bankruptcy rejected, in respect that, under section 4 of the Trade Union Act, 1871, it was unenforceable.
Held (dub. Lord Anderson) that, while the original claim could not have been entertained in a Court of law in respect that it was based on an agreement excluded by section 4, no such restriction affected the claim here in question, which was a claim based upon a new and independent agreement by the parties to arbitrate and to implement the arbiters decision.
Mills & Donald, plumbers, Edinburgh, were members of the Edinburgh, Leith, and District Master Plumbers' Association, a trade union within the meaning of the Trade Union Act, 1871. By the rules of the Association the members were charged a percentage on all contracts obtained by them, and part of this percentage was divided among the unsuccessful tenderers with a view to giving them some remuneration for their estimates. Under this rule the Association made certain claims upon Mills & Donald. These claims were disputed, and the parties entered into an arbitration to settle their dispute. The minute of reference set forth that the submission had been entered into for the purpose of having fixed and determined by the arbiter the sums of money due to or by Mills & Donald by or to the Association in virtue of Mills & Donald being members of the Association and under its constitution, rules, and bye-laws, and it also stated that the parties bound and obliged themselves to acquiesce in, implement, and fulfil the decision of the arbiter, and that they consented to registration of the minute and of the decree to follow thereon for preservation and execution.
On 2nd July 1925 the arbiter found that a balance of 298, 14s. 4d. was due by Mills & Donald to the Association in respect of estimate fees payable in terms of the rules, and, after giving them credit for a sum of 30 which had been accumulated to their credit under the rules, he decerned against them for payment of the balance of 268, 14s. 4d.
The firm was sequestrated on 19th October 1925, and the Association lodged a claim in the sequestration, which included the above sum of 268,14s. 4d. The trustee rejected this claim, on the ground that the Association, being an illegal combination in restraint of trade, had no status to insist on their claim. The Association then brought a petition in the Sheriff Court at Edinburgh for the recall of the deliverance pronounced by the trustee.
The petition was opposed by the trustee, who pleaded, inter alia:(4) The pursuers' Association being a Trade Union within the meaning of the Acts 34 and 35 Vict. cap. 31, and 39 and 40 Vict. cap. 22, and the present action being a legal proceeding instituted with the object of directly enforcing agreements as defined in section 4 of the said Act 34 and 35 Vict. cap. 31, the Court has no jurisdiction, and the action should be dismissed with expenses.*
On 29th November 1927 the Sheriff-substitute (Jameson) pronounced an interlocutor, in which he repelled the pleas in law stated for the trustee, and remitted to him to admit the Association to an ordinary ranking for, inter alia, the sum of 268, 14s. 4d.
The trustee appealed to the Court of Session, and the case was heard before the Second Division on 7th and 8th March 1928.
Argued for the appellant (the trustee);The claim was not enforceable in a Court of law. Section 4 of the Trade Union Act, 1871, 1 struck at any legal proceeding instituted with the object of directly enforcing agreements between members of a trade union, or recovering damages. The expression directly enforcing was used in antithesis to recovering damages, and it could not reasonably be read as implying the competency of any proceedings (other than those for recovering damages) which were designed to secure the enforcement of a trade union agreement by a side wind.2 That, however, was the object which the association sought to attain by claiming under the decree-arbitral. By agreeing to arbitrate they had, in effect, contracted out of the statutory enactment, by substituting for the trade union rule a separate agreement into which
they had imported the rule. But the interposition of an agreement which purported to be an independent agreement was not per se sufficient to alter the character of the whole subsequent proceedings. If the new agreement was merely the counterpart of one of the agreements enumerated in section 4, it could not be entertained by a Court of law. That was precisely the position here, for the agreement to arbitrate proceeded on the footing that what fell to be determined was the liability of the firm in virtue of their being members of the association and under its rules and bye-laws, and the arbiter's award bore to be made in terms of the rules and bye-laws. The position here was distinguishable from that in Baker v. IngallELRELR1 and Wilkie v. King,2 for in these cases the agreements sought to be enforced were concerned with matters which were clearly outside the ambit of section 4, whereas here the agreement to arbitrate incorporated rules which were struck at by that section.
The principle now contended for was not inconsistent with the ratio of these decisions, or of other decisions in which the question. of enforceability was considered.1 The case of Strick v. Swansea Tin-plate Co.ELR2 was not in point, and Evans v. HeathcoteELR3 turned upon specialties of English procedure.4 The wagering cases 5 cited by the Sheriff-substitute had no application to the circumstances of the present case. The Sheriff-substitute was wrong in admitting the respondents' claim to a ranking. If, as the appellant contended, the agreement to arbitrate was not enforceable, the decree-arbitral which followed on it, notwithstanding that it had been recorded, could not be a valid basis for a claim.6
Argued for the respondents (the Association);The claim here in question was based, not on the rules of the Association, but on the arbiter's award. In agreeing to submit their dispute to arbitration and to be bound by the arbiter's award, the parties had entered into a new agreement which took the question of liability outwith the scope of section 4. That section did not make the original agreement unlawful. It merely prohibited the enforcement of the agreement in a Court of law, and left the parties to it free to enforce implement of it in any other way they might choose. The parties here were accordingly not debarred from importing the rules of the Association, which were perfectly lawful, into a new and independent agreement under which their respective rights and obligations were referred to the decision of an arbiter, and the original agreement ceased to have effect as soon as the submission was agreed to.7 The Sheriff-substitute was right in holding that the new agreement was competent, and in directing the trustee to rank the Association in respect of their claim under the decree-arbitral. The trustee was not entitled to reject the claim, which was properly vouched.8 The present case was a fortiori of Evans & Co. v. HeathcoteELR,9 for here there was a recorded decree, which was
equivalent to a decree of Court, and not merely an admission by the debtor. With regard to the provisions of section 4, there were judicial dicta to the effect that the agreements there enumerated might be enforced indirectly.1 The opinion of Lord Macnaghten on this topic in HowdenELR2 was obiter. The case of Smith v. Scottish Typographical Association3 was distinguishable from the present case, for there the rules of the association had to be construed.
At advising on 9th March 1928,
Lord Justice-Clerk (Alness).Messrs Mills & Donald, who are plumbers, were members of the Edinburgh, Leith, and District Master Plumbers' Association. The Association claimed from them certain sums amounting to 268 or thereby, alleged to be due by them under the rules of the Association. Mills & Donald appear to have resisted the claim, and the parties thereupon entered into an arbitration to settle their dispute. In the submission both parties agreed to abide by, and to implement, the decision of the arbiter. On 2nd July 1925 the arbiter found Mills & Donald liable in payment of 268 to...
To continue reading
Request your trial