Lanarkshire Steel Company, Ltd, v Caledonian Railway Company
| Jurisdiction | Scotland |
| Judgment Date | 10 November 1903 |
| Docket Number | No. 10. |
| Date | 10 November 1903 |
| Court | Court of Session |
Lord Low, Lord President, Lord Adam, Lord M'Laren, Lord Kinnear.
RailwayRailway RatesIncreased Rates found unreasonable by Railway CommissionersAction for Recovery of Increased Rates paid under protest by Traders who had not applied to CommissionersCondictio IndebitiJurisdictionRailway and Canal Traffic Act, 1888 (51 and 52 Vict. cap. 25), secs. 10 and 12Railway and Canal Traffic Act, 1894 (57 and 58 Vict. cap. 54), secs. 1 (1), (3), (5).
The Caledonian, North British, and Glasgow and South-Western Railway Companies, in terms of a joint notice, made an increase in the rates charged for the carriage of coal on their systems. A Steel Company, whose works were connected with the lines of the Caledonian Railway, paid the increased rates under protest, and, as they alleged, upon the understanding that, if it should ultimately be found that the Railway Companies were not entitled to increase their charges, the excess would be refunded to them. Thereafter, upon separate complaints presented under the Railway and Canal Traffic Act, 1894, by seven coalmasters, the Railway and Canal Commissioners pronounced in each complaint an order finding that the Railway Companies had not proved that the increase was reasonable, and ordering them to discontinue charging the increased rates. The Steel Company obtained the necessary certificate from the Board of Trade, but did not lodge a complaint with the Railway and Canal Commissioners, relying, as they alleged, upon the representations of the Railway Companies that if the increase was found to be unreasonable the increased charges paid under protest would be refunded. In an action by the Steel Company against the Caledonian Railway Company for repayment of the extra charges paid under protest, held (in rev. judgment of Lord Low) (1) that there was no relevant averment of a contract binding the Railway Company to repay the extra charges in the event of the Railway and Canal Commissioners holding that they were not reasonable; (2) that the action was incompetent, exclusive jurisdiction to deal with the subject-matter of the action having been conferred upon the Railway and Canal Commissioners by the Railway and Canal Traffic Acts, 1888 and 1894; and (3) that there was no foundation for a condictio indebiti, as the charges made were not illegal, though they might be unreasonable.
in December 1899 the Caledonian, North British, and Glasgow and south-Western Railway Companies, jointly issued a notice that they intended, as from 1st January 1900, to increase the rates for coal, coke, and dross, between all places on their railways respectively, and between all places on the railways of each other to the following extent, viz.:
Rates not exceeding 2s. per ton, to be increased 1d. per ton. Rates exceeding 2s. per ton, but not exceeding 3s., to be increased 11/2d. per ton. Rates exceeding 3s. per ton, but not exceeding 4s., to be increased 2d. per ton. Rates exceeding 4s. per ton, but not exceeding 5s., to be increased 21/2d. per ton. Rates exceeding 5s. per ton, to be increased 3d. per ton.
In accordance with this notice the increased rates were charged by the Railway Companies as from 1st January 1900.
On 19th November 1900, seven coalmasters, having obtained the requisite certificate from the Board of Trade, brought separate complaints before the Railway and Canal Commissioners under the Railway and Canal Traffic Act, 1894,* in which they applied for an
order declaring that the increased rates were unreasonable requiring the Railway Companies to desist from charging the same, and directing an inquiry into the damages sustained by the applicants.
On the 30th October 1901 the Railway Commissioners pronounced orders in each of the seven applications, finding that it had not been proved by the Railway Companies that the increase made in their rates was reasonable; requiring the companies to discontinue charging the same, and directing an inquiry before the Registrar as to what damages had been sustained by the applicants.
In consequence of these orders the Railway Companies ceased to charge the increased rates as from 1st November 1901. The inquiry as to damages before the Registrar was not held, a payment having been made to the applicants by the Railway Companies.
On 18th December 1900 the Lanarkshire Steel Company, Limited, whose works were connected with the lines of the Caledonian Railway Company, had complained to the Board of Trade that the increased rates were unreasonable. They obtained the necessary certificate upon 27th August 1901, but they did not lodge a complaint with the Railway Commissioners.
On 16th September 1902 the Lanarkshire Steel Company brought the present action against the Caledonian Railway Company and against the North British and Glasgow and South-Western Railway Companies for their interest, concluding for payment of 1043, being the amount of the increase in rates paid by them, or alternatively for the same sum in name of damages.
The Caledonian Railway Company were the only compearing defenders.
The pursuers averred that by letter of 26th January 1900 they objected to the increased rates as unreasonable, and demanded their withdrawal. The Caledonian Railway Company, notwithstanding, rendered their monthly accounts upon the basis of the increased rates. (Cond. 8) The pursuers, however, declined to pay these accounts, except upon the basis of the old rates, and sent cheques for these months on the basis of the old charges to the Caledonian Railway Company. The cheques were returned. The Caledonian Railway Company stated that they would decline to carry the pursuers' traffic in the future unless payment were made of said accounts, and that in the event of the pursuers refusing to pay the said accounts, and accounts rendered in future on the said basis, payment on the new basis would be exacted on each waggon as it entered the pursuers' works. Had this threat been carried out, it would have meant the closing of the pursuers' works. The fear of the said threat being put in force coerced the pursuers into acceding to defenders' demands. (Cond. 9) On 14th May 1900 the pursuers' law-agents addressed the following letter to the Caledonian Railway Company:183 St
Vincent Street, Glasgow, 14th May 1900.Dear Sir,Your letter of 7th inst., addressed to our clients the Lanarkshire Steel Co., Ld., has been placed in our hands with instructions to answer the same. Our clients intend to follow up their intimation of protest against the increase of rates; but in order to allow of your books being cleared, they are willing to pay the accounts for January, February, and March, which have been rendered, on the understanding, however, that they make that payment under protest, and that their right to claim a rebate for the increase shall not be prejudiced, and that if in the ultimate issue of the question it should be found that the railway companies were not entitled to make the increased charges, the same shall be returned to our clients. In short, they will pay under protest, with a right of rebate should their contention be found correct by the ultimate tribunal. On hearing from you that you agree to the above, we shall ask our clients to pay the money.Yours truly, Watt, Son, & Coy. (Cond. 10) The Caledonian Railway Company, while agreeable to take payment under protest, at first declined to accept payment in terms of said letter of 14th May 1900; but they ultimately agreed to do so, and accordingly on 30th May 1900 payment of the accounts for January, February, and March was made by the pursuers on the conditions contained in said letter. (Cond. 11) The pursuers continued to pay to the Caledonian Railway Company, until the increased charges were stopped as after mentioned, their monthly accounts as they were rendered at the end of each month, under the conditions contained in said letter of 14th May 1900. The Caledonian Railway Company acknowledged that payment was made under protest as to the legality of the said charges, and under reservation of the pursuers' claims for repetition and for damages.
In answer to these averments, the defenders denied that the payments had been accepted in terms of Messrs Watt, Son, & Company's letter of 14th May 1900.
With regard to the complaints by the seven coalmasters to the Railway Commissioners, the pursuers averred;(Cond. 13) The said applications were general in their terms, referring not only to the rates then in force to and from the applicants' collieries, which were specified in schedules to the applications, but also, in statement 3 of the said applications, to all rates over the respondents' systems to which the said notice mentioned in condescendence 5 applied, including the increased rates charged to the pursuers. (Cond. 14) The Railway Companies in their replies attempted to justify the said increase upon general grounds, applicable not only to the said seven coalmasters' traffic, but to the working of the respondents' whole systems, including the pursuers' traffic. Particularly, in article 7 of the said replies, the respondents craved leave to treat the question generally. (Cond. 15) The complaint made in the said applications against the reasonableness of the increased coal rates extended to and included all coal rates as increased to the pursuers' steel works.
They further averred that the opinion of the Railway Commissioners proceeded on perfectly general grounds, holding that the Railway Companies had failed to prove that the increase in rate was reasonable on the general ground of increased cost over their system.
In answer to these averments the defenders explained;(Ans. 13 to 15) The proceedings before the Railway Commissioners on the application of the seven coalmasters, had reference only to the rates payable by the respective applicants specifically set forth in each application or a schedule thereto, and had nothing to...
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