Sellar v Highland Railway Company
| Jurisdiction | England & Wales |
| Judgment Date | 24 January 1919 |
| Date | 24 January 1919 |
| Docket Number | No. 3. |
| Court | House of Lords |
Lord Buckmaster, Lord Finlay, Ld. Dunedin, Ld. Atkinson.
Arbitration—Arbiter—Disqualification on ground of interest—Shareholder in incorporated company—Reduction of oversman's award.
Arbitration—Expenses—Disqualification of arbiter—Reduction of award—Expenses of the arbitration proceedings—Lands Clauses Consolidation (Scotland) Act, 1845 (8 and 9 Vict. cap. 19), sec. 24.
In an arbitration under section 24 of the Lands Clauses Consolidation Act, 1845, between the proprietor of certain fishings and a railway company, the arbiters disagreed, and the reference devolved upon the oversman. After the oversman had issued proposed findings, the proprietor of the fishings discovered that the arbiter appointed by the railway company was a holder of a small quantity of ordinary stock in the company, a fact not known to the directors personally at the time of the appointment. The proprietor thereupon gave notice to the company that, owing to the disqualification of the arbiter, he would not hold himself bound by the award; but, without prejudice, he lodged representations against the proposed findings, and thereafter the oversman issued his final award.
In an action at the instance of the proprietor of the fishings for reduction of the award, held (aff. judgment of the First Division) that—on the assumption that the law applicable to Judges was also applicable to arbiters—the fact of the arbiter being a holder of stock was sufficient to disqualify him, and that his disqualification vitiated the award of the oversman, which fell to be reduced.
Held further (rev. judgment of the First Division) that the railway company were not liable to the proprietor in the expenses incurred by him in the arbitration, as the company had not been guilty of any breach of contract or duty, and as, in any event, the fact that the expenses had been wasted was due solely to the action of the proprietor in challenging the award after the expenses had been incurred.
Dimes v. Proprietors of the Grand Junction Canal, (1852) 3 H. L. 759, followed.
(In the Court of Session, 16th May and 19th July 1918—1918 S. C. 838)
The defenders appealed to the House of Lords. The case was heard on 23rd and 24th January 1919. In addition to an argument that the possession of the shares in question would not have been a disqualification in the case of a Judge, counsel for the appellants presented an argument (which had not been submitted in the Court below) to the effect that, according to the law of Scotland, a distinction fell to be drawn between the case of an arbiter and the case of a Judge, and contended that an interest which might disqualify the latter might not necessarily disqualify the former. The undernoted authorities were referred to in the course of the debate.1
Lord Buckmaster.—So long ago as 1852 the House in the case of Dimes v. Proprietors of the Grand Junction CanalUNKUNKUNKUNKSCUNKSCELRELR1decided that the possession by Lord Cottenham, who was then the Lord Chancellor, of a certain shareholding in the Grand Junction Canal Co. rendered voidable a judgment which he had given in a suit to which the Canal Co. was a party, and this decision was in entire agreement with the unanimous opinions of the learned Judges of the King's Bench who had been summoned for the purpose of expressing their views. It is quite true that that case arose in the English Courts, and that the law there administered was the English law; but on 23rd February 1858, in a case of the London and North-Western Railway Co. v. LindsayUNK,2 the same question arose with regard to an appeal to this House from the Courts in Scotland. Lord Wensleydale there stated that he, being a shareholder in the appellant company, proposed to retire and take no part in the judgment. The Lord Chancellor regretted that this step seemed to be necessary, and, although counsel stated that he had no objection, it was thought better that any difficulty that might arise should be avoided, and Lord Wensleydale accordingly retired. This was not in express terms a decision that the principle applicable to the Courts in England was also applicable to the Scottish Courts; but in the case of Smith v. Liverpool and London and Globe Insurance Co.SC,3 the Lord President stated his view of the law. He refers to the decision in Dimes'sUNKUNKUNKUNKSCUNKSCELRELR case,1 and he continues thus:—‘It is contended that the laws of England and Scotland are not the same upon this point. I think they are the same in regard to an objection like the present where the Judge is a shareholder of a litigant company. The laws of England and Scotland appear to me to be identical as regards this particular objection.’ There is no reason to question the soundness of this opinion and no subsequent case has thrown doubt upon its authority. The law remains unaltered and unvarying to-day, and, although it is obvious that the extended growth of personal property and the wide distribution of interests in vast commercial concerns may render the application of the rule increasingly irksome, it is none the less a rule which I for my part should greatly regret to see even in the slightest degree relaxed. The importance of preserving the administration of justice from anything which can even by remote imagination infer a bias or interest in the Judge
upon whom falls the solemn duty of interpreting the law is so grave that any small inconvenience experienced in its preservation may be cheerfully endured. In practice also the difficulty is one easily overcome, because, directly the fact is stated, it is common practice that counsel on each side agree that the existence of the disqualification shall afford no objection to the prosecution of the suit, and the matter proceeds in the ordinary way, but, if the disclosure is not made, either through neglect or inadvertence, the judgment becomes voidable and may be set aside.
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Fatima Helow To The Nobile Officium Of The Court Of Session And Answers For The Advocate General For Scotland And The Lord Advocate
...interest in the outcome, however small: Dimes v Proprietors of Grand Junction Canal (1852) 3 HL Cas 759; Sellar v Highland Railway Co, 1919 SC (HL) 19. The extension of the rule was taken one step further when Lord Hoffmann was held to have been disqualified automatically by reason of his d......
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Paul Clancy V. Robin Dempsey Caird
...discovered after decree had become final, the decree may be reduced: Sellar v The Highland Railway Company & Others 1918 S.C. 838, 1919 S.C. (H.L.) 19. There is a remedy, therefore, either in the course of the proceedings in which the irregularity occurs, or retrospectively when the proceed......
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Davidson v Scottish Ministers (No 2)
...for concluding that there was a real possibility that the tribunal or one of its members was biased: eg Sellar v Highland Railway Co 1919 SC (HL) 19; Bradford v McLeod 1986 SLT 244. But the concept is wider than that. It includes an inclination or pre-disposition to decide the issue only on......
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Meerabux v Attorney General of Belize
...interest in the outcome, however small: Dimes v Proprietors of Grand Junction Canal (1852) 3 HL Cas 759; Sellar v Highland Railway Co, 1919 SC (HL) 19. The extension of the rule was taken one step further when Lord Hoffmann was held to have been disqualified automatically by reason of his ......