John Watson Ltd v Caledonian Railway Company

JurisdictionScotland
Judgment Date15 July 1910
Date15 July 1910
Docket NumberNo. 157.,No. 124.
CourtCourt of Session
Court of Session
1st Division

Ld. Stormonth-Darling, Lord President, Lord Adam, Lord Kinnear.

No. 124.
John Watson, Limited,
and
Caledonian Railway Co.

ProcessDiligenceRailwayComplaints as to rates and chargesTraders'profitsRailway and Canal Traffic Act, 1894 (57 and 58 Vict. cap. 54), sec. 1.

The Railway and Canal Traffic Act, 1894, section 1 (1), enacts that where a railway company have since 1892 increased any rate or charge then if any complaint is made that the rate or charge is unreasonable, it shall lie on the company to prove that this increase of the rate or Caledonian charge is reasonable. Section 1 (3) provides that the Railway and Canal Commissioners shall have jurisdiction to hear and determine any complaint with respect to any such increase of rate or charge.

A complaint having been brought before the Railway and Canal Commissioners under this section by one of a number of coalmasters complaining of an increase in the rates applicable to the carriage of coal, the railway company, before any inquiry had taken place, moved for a commission and diligence to recover the books, &c., of the applicants for a period of years preceding the application, in order to ascertain the profit or loss upon their trading for that period. The railway company maintained that they were entitled to the diligence in order to meet the case that the trade could not profitably be carried on if burdened by the increase of rates.

The Court (aff. the judgment of the ex officio Commissioner, Lord Stormonth-Darling) refused the commission and diligence.

An increase in the rate or charge upon the carriage of coal, jointly agreed upon by the Caledonian, North British, and Glasgow and South-Western Railway Companies, came into operation on 1st January 1900.

On 19tn November 1900, John Watson, Limited, coalmasters, Glasgow, one of the traders affected by the increase of the rates, presented an application to the Railway and Canal Commissioners against the three railway companies for (1) an order declaring that the increased rates and charges were unreasonable, and requiring the respondents to desist from charging them; (2) an order directing an inquiry into the damages sustained by the applicants by reason of the increase; (3) an order directing payment to the applicants of such damages.*

The applicants stated generally that the rates and charges as increased in the manner hereinbefore referred to are unreasonable, and they claimed as damages the whole amount of the increase paid by them on their traffic since 1st January 1900.

In answer the respondents averred;(3) The respondents deny that the rates in question as increased are unreasonable. Since the rates in operation prior to 1st January 1900 were fixed, and prior thereto, the working expenses of the respondents in respect of the applicants' traffic have greatly increased. Amongst other things there has been a steady shortening of the hours of labour, necessitating an increase in the number of employees and a continuous increase in wages, an increase in the price of plant, stores, material,

fuel, and other articles used by the respondents, new and onerous statutory obligations laid on the railway companies, improvements in the facilities and conveniences afforded in respect of coal traffic, additional capital expenditure by the railway companies in connection with the accommodation of coal traffic, and generally a material alteration in the method of conducting coal traffic, thereby adding substantially to the cost of working such traffic.

4. The respondents require, and are justly entitled to, the addition to their revenues which the increases will provide, and such increases have not had a prejudicial effect upon the business of the applicants, and have not proved a burden thereon.

These statements were denied by the applicants.

Before any inquiry had taken place, the respondents moved Lord Stormonth-Darling, the ex officio Commissioner, to grant a commission and diligence for the recovery of documents from the applicants. The specification, as amended at the hearing before the First Division, called for all books, accounts, abstracts, statements, reports, returns, and other documents or writings made or kept by or on behalf of the applicants or their predecessors in business from 1897 [in the original specification from 1871], that excerpts may be taken therefrom for each of the years from 1897 to 1900, both inclusive.

1. Of all entries shewing or tending to shew(a) The quantities of coal, coal-nuts, coke, culm, gum, duff, peas, beans, dross-nuts, or other descriptions of small coal or dross, and the different descriptions and qualities thereof, sold by the applicants or their said predecessors from each of their collieries and pits, and the prices (pit and otherwise) charged and received by the applicants and their said predecessors for such minerals, (b) The quantities and prices of such minerals despatched from said collieries by the railways of the respondents, or any of them, as distinguished from the remainder of such minerals, and by whom the railway rates and charges were borne and paid.

2. Of all entries shewing or tending to shew the total expenditure, including lordships, royalties, wayleaves, oncost, and cost of working and raising the minerals incurred by the applicants or their said predecessors in carrying on their business as coalmasters at or from the collieries mentioned in the application, and in working, winning, and marketing their foresaid coal and other minerals.

3. Of all entries shewing, or tending to shew, the gross and net profits or losses of the applicants or their said predecessors accruing from their business as coalmasters carried on at or from the collieries mentioned in the application, and the appropriation of such profits.

4. Of all entries shewing, or tending to shew, the amount and objects of or relative to capital expenditure by or on behalf of the applicants or their said predecessors at or in connection with each of their collieries mentioned in the application.

Similar applications were made by other coalmasters, including the Lothian Coal Company, Limited, and the railway companies made similar motions for a diligence in these applications.

On 31st March 1901 Lord Stormonth-Darling refused the commission and diligence.*

The respondents appealed to the First Division, and argued;The Lord Ordinary had held that the whole line of inquiry suggested in the diligence was irrelevant. According to his view, while it was relevant to inquire into the position of the railway company's business, it was not relevant to make any such inquiry in the case of the teaders. The proper standpoint was that an inquiry into the reasonableness of the increased rates involved the position of the trade of both parties. If, for instance, the trader could shew that his trade was not in a position to bear the burden of the increased rate, this would surely be a relevant consideration for the Commissioners, and, if this were so, the respondents were entitled to such information as would enable them to meet this contention.1 It was not necessary to extend such an inquiry to the whole trade; it was only against traders complaining of the increased rates that it ought to be allowed. The respondents averred that the increase in the rates had not had a prejudicial effect upon the business of the applicants, and this statement was denied. It was essential that they should get materials to determine this disputed question of fact.

The argument for the applicants sufficiently appears from the

opinion of the Lord President. They cited the undernoted authorities.1

Lord President.The proceeding, in which this question arises, has been instituted under the Railway and Canal Traffic Act of 1894, section 1 of which in effect provides, that in the event of railway companies raising the rates which have been authorised for carriage on their lines, the onus shall rest upon them of proving to the satisfaction of the Commission that any increase of rates made by them since 31st December 1892 is reasonable. The railway companies must therefore, in this proceeding, justify the raising of their rates, or, in other words, must prove that the rates which they are claiming from the traders are reasonable. As the initial onus is thus laid upon them, it will be for them to adduce such evidence as they think fit, in support of the proposition that the raising of the rates is reasonable, and if they tender no such evidence, the traders may possibly lead no proof and say that as no attempt has been made to prove that an increase is reasonable, the Commission should refuse to sanction it. On the other hand, if the railway companies establish a prima facie case for the increase of the rates, it will be for the traders to adduce such evidence as they think fit to disprove the reasonableness of the increased rate which the railway companies propose to charge. Now, what the railway companies ask for is a diligence of a very comprehensive character, although it has been greatly restricted to-day. The first call was for excerpts of documents of certain kinds for each of the years from 1871 to 1900, both inclusive. That, I understand, is now...

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