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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Lanarkshire Steel Co. v. Caledonian Railway Co. [1903] ScotLR 41_41 (10 November 1903) URL: http://www.bailii.org/scot/cases/ScotCS/1903/41SLR0041.html Cite as: [1903] ScotLR 41_41, [1903] SLR 41_41 |
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Certain railway companies jointly issued a notice intimating an increase of rates for the carriage of coal. A steel company whose works were served by one of these railway companies objected to the increase of rates as being unreasonable, and demanded that it should be withdrawn. The railway company, however, rendered their monthly accounts for carriage to the steel company upon the basis of the increased rates. The steel company paid the accounts as charged under protest, and, as they alleged, upon the understanding that their right to claim a rebate for the increase should not be prejudiced, and that, if ultimately it should be found that the railway companies were not entitled to increase the rates, the increased charges should be returned. The steel company did not lodge a complaint in respect of the increase of rates with the Railway and Canal Commissioners, but seven companies which were substantially in pari casu with the steel company lodged such complaints, with the result that in October 1901 the Railway and Canal Commissioners found in the case of each of the seven complaints lodged that the increase in the rates was unreasonable, and directed the railway companies to discontinue to charge the increased rates. In consequence the railway companies ceased to charge the increased rates. The steel company alleged that they had not proceeded with their application to the Commissioners in reliance on representations by the defenders that their claims would not be prejudiced in consequence.
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Held that, even assuming that the determination of the Railway and Canal Commissioners did not proceed upon the special circumstances of the particular cases brought before them, but was equallyapplicable to the circumstances of the steel company, an action brought by the steel company to recover from the railway company the amount paid in respect of the difference between the old rates and the increased rates during the period in which the increased rates were charged was incompetent, and the railway company assoilzied.
The Railway and Canal Traffic Act 1894 (57 and 58 Vict. c. 54) enacts as follows—Section 1 (1)—“Where a railway company have, either alone or jointly with any other railway company or companies, since the last day of December one thousand eight hundred and ninety-two, directly or indirectly increased or hereafter increase directly or indirectly 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 the increase of the rate or charge is reasonable, and for that purpose it shall not be sufficient to show that the rate or charge is within any limit fixed by an Act of Parliament.” …
(3) “The Railway and Canal Commissioners shall have jurisdiction to hear and determine any complaint with respect to any such increase of rate or charge, but not until a complaint with respect thereto has been made to and considered by the Board of Trade.”
(5) “Section 12 of the Railway and Canal Traffic Act 1888 shall apply in the case of any such complaint.” …
The Railway and Canal Traffic Act 1888 (51 and 52 Vict. c. 25) enacts (section 12)—“Where the Commissioners have jurisdiction to hear and determine any matter, they may, in addition to or in substitution for any other relief, award to any complaining party who is aggrieved such damages as they find him to have sustained; and such award of damages shall be in complete satisfaction of any claim for damages, including repayment of overcharges, which but for this Act such party would have had by reason of the matter of complaint. Provided that such damages shall not be awarded unless complaint has been made to the Commissioners within one year from the discovery by the party aggrieved of the matter complained of.”
Section 10. “Where any question in dispute arises involving the legality of any toll, rate, or charge, or portion of a toll, rate, or charge, charged or sought to be charged for merchandise traffic by a company to which this Act applies, the Commissioners shall have jurisdiction to hear and determine the same, and to enforce payment of such toll, rate, or charge, or so much thereof as the Commissioners decide to be legal.”
The Lanarkshire Steel Company, Limited, brought this action against the Caledonian Railway Company and certain other railway companies for their interest, concluding for payment of certain sums amounting in all to £1043, with interest, or alternatively for payment of the said sum in name of damages.
The works for the manufacture of steel carried on by the pursuers were situated on and connected with railways belonging to the defenders, and large quantities of coal, coke, &c. consumed in the pursuers' works were carried by the defenders.
In December 1899 the Caledonian Railway Company, the North British Railway Company, and the Glasgow and South Western Railway Company jointly issued a general notice that they intended, as from 1st January 1900, to increase the rates for the carriage of coal and dross between all places on their respective railways.
The pursuers, by letter of 26th January 1900, objected to the increase of rates as unreasonable and demanded its withdrawal. The railway companies demanded payment of the rates as increased from 1st January 1900. The defenders, the Caledonian Railway, rendered monthly accounts to the pursuers in respect of the carriage of mineral to the pursuers' works upon the basis of the increased rates. The pursuers declined to pay these accounts in so far as they consisted of increased rates, but sent cheques upon the basis of the rates which had been in force prior to the notice. These cheques were returned.
The pursuers averred (Cond. 6) that “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.”
On May 14th a letter was addressed by the pursuers' law-agents to the defenders stating inter alia, as follows:—“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.”
The pursuers averred that the defenders ultimately agreed to accept payment in terms of the said letter dated 14th May, and that payment of the accounts for January, February, and Match was made by the pursuers on the conditions contained in that letter. The defenders denied this.
Seven coalmasters having obtained certificates from the Board of Trade applied to
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the Railway and Canal Commissioners to have the increase of rates declared unreasonable and for an order upon the railway companies to desist from charging the said rates. The pursuers averred that the said applications were general in their terms, referring not only to the rates then in force to and from the applicants' collieries but also to all rates over the respondents' systems which had been increased by the notice before-mentioned; and that the railway companies in their replies attempted to justify the said increase upon general grounds, applicable not only to the seven coalmasters' traffic but to the working of the respondents' whole systems, including the pursuers' traffic. On 30th October 1901 the Railway Commissioners pronounced orders in each of the applications by the seven coalmasters finding that it had not been proved by the railway companies that the increase in the rates which had been made was reasonable and ordinary, and directing the railway companies to discontinue to charge the said rates. In consequence of these orders the railway companies ceased to charge the increased rates as from 1st November 1901.
On 18th December 1900 the pursuers had lodged with the Board of Trade a complaint in terms of the Railway and Canal Traffic Acts 1888 and 1894 against the railway companies. They averred that at a meeting which they had at the Board of Trade offices with the defenders' representatives the latter induced them to delay taking proceedings on the ground that a decision would soon be given by the Railway Commissioners upon the complaints of the seven coalmasters; that no hardship could accrue to the pursuers by the delay; that the railway companies ‘were good for the money,’ and ‘were not going to run away,’ thereby causing the pursuers to understand that in the event of the increase of rates being declared to be unreasonable the railway companies would make restitution of all money paid under protest to the legality of the said increase; and that in reliance upon this undertaking, given by the said defenders' representative, the pursuers, believing that they would not be prejudiced thereby, desisted from further objections to the delay claimed.
The defenders averred “that 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, and had nothing to do with and made no reference to the rates paid by the pursuers. There was a separate proof led by each of the applicants, and the Railway Commissioners pronounced a separate order in each application, which order applied only to the scheduled rates payable by each applicant, and no judgment or order of the Railway Commissioners applied to the rates charged by the defenders against the pursuers. The increased rates in question were less than the maximum rates which the defenders were entitled to make, and were lawful. The defenders believe and aver that the increase in question on the rates charged to the pursuers was reasonable. The question of reasonableness cannot be determined in the present action. It is one which, if it could now be competently raised (which is denied), is within the exclusive jurisdiction of the Railway Commissioners.”
The pursuers pleaded—“(1) The defences are irrelevant. (2) The pursuers having been illegally overcharged by the defenders the Caledonian Railway Company to the extent sued for, are entitled to repetition of the sums so overcharged with expenses. (4) The illegality of the increase in the rates and charges having been established by the order of the Railway and Canal Commission, the pursuers are entitled to decree. (6) Separatim, The pursuers having, in reliance upon representations of the defenders the Caledonian Railway Company, barred themselves from obtaining restitution of said overcharges in the Court of the Railway and Canal Commission, are entitled to damages as concluded for.”
The defenders pleaded—“(1) The action is incompetent. (2) The pursuers' averments are irrelevant and insufficient to support the conclusions of the summons. (3) The increased rates in question being in themselves lawful charges, and the pursuers not having applied to the Railway Commissioners regarding the said increases, they cannot now raise the question of the reasonableness or the legality thereof. (4) The question of the legality of the increased rates complained of being in the circumstances within the exclusive jurisdiction of the Railway Commissioners, the action should be dismissed. (7) Esto that the increased rates charged by the defenders to the pursuers were not lawful charges; the pursuers' remedy was a claim for damages to be fixed by the Railway and Canal Commissioners, and they cannot recover any part of the increased rates in this process.”
The Lord Ordinary ( Low), by interlocutor dated June 30th 1903, before answer, allowed to the parties a proof of their respective averments.
Opinion—… “The object of the present action is to obtain repayment from the Caledonian Company of the difference between the old rates and the increased rates for the period during which the latter rates were exacted from the pursuers.
The first question is, whether it can be regarded as settled, in a question with the pursuers, that the increase of rates was unreasonable, and therefore illegal. The defenders contend that that question must be answered in the negative, because the judgment of the Commissioners was confined to the seven cases which were brought before them, and proceeded upon the special circumstances of these cases. The judgment and orders of the Commissioners therefore, they argued, had no application to the case of a trader who had not filed a complaint.
I have examined the complaints and the answers of the Railway Companies
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The defenders, however, further argued that although the result of the orders of the Commissioners in the cases which were brought before them might be that the railway companies could not thereafter impose the increased rates upon anyone, it did not follow that the rates fell to be regarded as illegal prior to the judgment of the Commissioners, seeing that they were within the maximum charges which the companies were authorised to make. Further, the defenders argued that in any view repayment of the overcharge could only be recovered through the medium of a complaint to the Commissioners as provided by the statute.
In order to test these arguments it is necessary to see what the course of legislation has been.
By section 79 of the Railway Clauses Consolidation Act 1845 railway companies were authorised to make such ‘reasonable charges’ in respect of traffic carried by them as they might from time to time determine upon, not exceeding the tolls by the Special Act authorised to be taken by them.
That enactment is still in force, and therefore rates must not only be within the maximum authorised, but must be reasonable, although no doubt (apart from the provisions of the Railway and Canal Traffic Act 1894), a rate which was within the maximum was prima facie and presumably reasonable.
Until the passing of the Railway and Canal Traffic Act 1888 the Railway Commissioners had no jurisdiction to deal with the reasonableness of a rate. I think, however, that that Act empowered them to do so, because by section 10 they are given jurisdiction to hear and determine ‘any question or dispute involving the legality of any toll, rate, charge, or portion of a toll, rate, or charge.’ I think that that enactment includes the case of a rate which is illegal because, although within the maximum, it is unreasonable.
The Railway and Canal Traffic Act 1894 deals with rates which are increased after the last day of December 1892, and provides that if complaint is made that such increase is unreasonable the onus of proving that it is reasonable shall lie on the Railway Company.
By section 1 (3) it is enacted that the Railway Commissioners shall have jurisdiction to hear and determine any complaint with respect to any such increase of rate.
I think that the result is that the Railway Commissioners are the only tribunal which has jurisdiction to determine whether an increased rate is or is not reasonable, and in this case they have held that the increase was not reasonable. The question therefore seems to me to be whether a trader who has paid the increased rate under protest is entitled to recover by action the amount which he has paid in excess of the legal rate?
The defenders' contention that that also is a question which is within the exclusive jurisdiction of the Commissioners is founded upon the provisions of section 12 of the Act of 1888, and section 1 (5) of the Act of 1894.
The former section provides that ‘Where the Commissioners have jurisdiction to hear and determine any matter, they may, in addition to or in substitution for any other relief, award to any complaining party who is aggrieved such damages as they find him to have sustained; and such award of damages shall be in complete satisfaction of any claim for damages, including repayment of overcharges, which but for this Act such party would have had by reason of the matter of comlplaint.
By section 1 (5) of the Act of 1894 that provision is made applicable in the case of complaints under the latter Act.
If therefore the pursuers had made a complaint to the Commissioners that the increase of charge was unreasonable, they might also have claimed and been awarded damages, including the repayment of the overcharge for which they now sue.
Now, as I have already said, I think that the Commissioners alone have jurisdiction to determine that an increase of rate is unreasonable, and it also seems to me that the Legislature intended that the question of damages should be disposed of by the same tribunal, and did not intend that after the question of the reasonableness or legality of the rate or charge had been determined by the Commissioners the trader whose complaint had been sustained might then bring an action of damages at common law. I think that view is fortified by the fact that it is provided by the 12th section of the Act of 1888 that damages shall not be awarded ‘unless complaint has been made to the Commissioners within one year from the discovery by the party aggrieved of the matter complained of.’
But assuming that a general claim of damages can only be dealt with by the Railway Commissioners, it does not seem to me necessarily to follow that the increased rate having been disallowed by the Commissioners, a trader who has paid it under protest, but who has not lodged a complaint and application, cannot recover the overcharge. I think that there is a distinction between a claim of damages and a claim for repayment of an overcharge which has been made under protest and under the threat that if it was not paid goods would not be delivered. If a trader paid an overcharge without objection it
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I am therefore of opinion, although the question appears to me to be attended with great difficulty, that assuming the averments of the pursuers to be true, their claim is not excluded by the enactments to which I have referred.
The pursuers further aver that the defenders agreed to repay the overcharge in the event of the Commissioners finding the increase of rates to be unreasonable.
The pursuers in the first place say that the defenders agreed to accept payment of the increased rates upon the terms stated in the pursuers' letter of 14th May 1900, which I have already quoted. The whole correspondence (which is only partially quoted in the record) has been produced, and seems to me rather to favour the view that the defenders did in the end agree to the pursuers' terms. The letters show, however, that at one stage there was a personal interview between the representatives of the pursuers and of the defenders, and until it is ascertained what occurred at that interview it is impossible to say with confidence what were the precise terms upon which payment was ultimately made and accepted.
Further, the pursuers lodged a complaint with the Board of Trade, which is the necessary preliminary to an application to the Railway Commissioners under the Act of 1894, and they aver that at a meeting which they had at the Board of Trade offices with the defenders' representatives the latter induced them to delay taking proceedings on the ground that a decision would soon be given by the Railway Commissioners upon the complaints of the seven coalmasters, and that the railway companies ‘were good for the money’—that is, for the increase of rate which had been paid under protest.
I think that those averments might have been made more pointed, but I am unable to say that they are not relevant.
I therefore propose to allowa proof. The points which it seems to me the pursuers require to establish are that they were compelled to pay the rates, and did so under protest, the amount which they so paid, and the alleged agreement on the part of the defenders to repay the overcharge in the event of the increase of the rates being held to be unreasonable.”
The defenders reclaimed.
In two other actions— Moore & Company v. Glasgow and South Western Railway Company and Moore & Company v. Caledonian Railway Company—the circumstances were practically identical with those of the case here reported. The cases were heard together and the interlocutors were similar.
Argued for the defenders and reclaimers—While it was admitted that the general principles of the decision of the Railway Commissioners in the case of the seven coalmasters were applicable to the case of the pursuers, non constat that there might not be differences in the facts and circumstances of the pursuers which would prevent the Commissioners' decision being applicable to them. But, apart from that, the fact that the increase in the rates had been held to be “unreasonable” did not prove that it was illegal— Evershed v. London and North Western Railway Co” 1877, 2 QBD 254, 3 Q.B.D. 135, aff. 3 App. Cases 1029. The increased rates were within the maximum, and that being so were prima facie legal. They were the company's terms for carriage, and had been accepted— Great Western Railway Co. v. M'Carthy, 1887, 12 App. Cas. 218. The questions as to the legality of a rate and as to the reasonableness of a rate were really distinct questions. It was the province of the courts of law to determine the one and of the Railway Commissioners to determine the other. It was essential to the pursuers' case that the increase in rates should be shown not merely to have been unreasonable but also to have been illegal, for if it was legal it could not be indebitum so as to base a condictio indebiti. It was within the exclusive jurisdiction of the Railway Commissioners to determine whether money legally paid under a system of increased rates was recoverable. The Railway and Canal Traffic Act 1888, sec. 12, and the Railway and Canal Traffic Act 1894, sec. 1 (5), made this clear. The remedy of the pursuers was to have brought a complaint before the Commissioners, craving damages in respect of the overcharge— North British Railway Co. v. North British Storage and Transit Co., March 11, 1897, 24 R. 687, 34 S.L.R. 563; Ricket, Smith, & Co., Limited v. Midland Railway Co., 9 Railway and Canal Traffic Cases 107; and Smith & Forrest, 11 Railway and Canal Traffic Cases 156, were also referred to.
Argued for the pursuers and respondents—The decision of the Railway Commissioners in each of the cases brought by the seven coalmasters must be taken as a decision on the general question as to the reasonableness of the increased rates. The judgment of the Commissioners proceeded on perfectly general grounds, and it must be assumed that if the pursuers had lodged an application with the Commissioners the Commissioners would similarly have pronounced the increase of the rates to be unreasonable. A rate that was unreasonable was illegal, even though it was within the statutory maximum— Great Western Railway Company v. Sutton, 1869, L.R. 4, E. & I. App. 226; Canada Southern Railway Company v. International Bridge Company, 1883, L.R., 8 App Cas 723; Davis & Sons, Limited, v. Taff Vale Railway Company (1895), A.C. 542. From the beginning of the legislation on railways it had been a condition of the right of a railway to charge, that the rate was reasonable. After the decision by the Railway Commissioners it would clearly have been illegal for the railway company
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At advising—
The Caledonian, North British, and Glasgow and South-Western Railway Companies in December 1899 issued a notice that they intended to increase the rates for the carriage of coal, coke, and dross between all places on their railways respectively, and between all places on the railways of each other, stating at the same time that the increase would take effect as from 1st January 1900.
The pursuers in that month wrote to the defenders objecting to the increase of the rates as being unreasonable, and requiring the defenders to withdraw their notice. The defenders, however, did not withdraw it, and they rendered their monthly accounts for January, February, and March 1900 in respect of the carriage of minerals to the pursuers' works upon the basis of the increased rates of which they had given notice, and the pursuers refused to pay the accounts in so far as they consisted of increased rates, but offered to pay upon the basis of the rates which had been in force prior to the notice. The defenders declined to accept such payment, and gave notice that in the event of the pursuers refusing to pay the account as charged payment at the increased rates would be demanded upon each waggon as it entered the works of the pursuers. The pursuers then paid under protest, and, as they allege, upon the understanding that their right to claim a rebate in respect of the increase should not be prejudiced, and also that if it should ultimately be found that the defenders were not entitled to make the increased charges the excess would be repaid by them to the pursuers.
Seven coalmasters whose works had connections either with the railways of the defenders or with the railways of the North British or the Glasgow and South-Western Railway Companies, having obtained certificates from the Board of Trade, presented formal complaints and applications to the Railway and Canal Traffic Commissioners, in which they craved that these Commissioners should declare that the increased rates were unreasonable, and should require the three railway companies to cease from charging them.
The pursuers obtained a certificate from the Board of Trade, but they did not follow it up by lodging a complaint against the defenders with the Railway Commissioners because (they state) that they considered it to be unnecessary to incur the expense of doing so, as the question relative to the reasonableness of the increased rates would be decided in the proceedings which had already been instituted by the other seven coalmasters above mentioned.
The Railway Commissioners after hearing evidence issued on 20th October 1901 orders in each of the seven applications by these coalmasters, finding that it had not been proved by the defenders and the North British and Glasgow and South-Western Railway Companies that the increase in the rates which had been made by them was reasonable, and ordering these companies to discontinue charging the increased rates. The three railway companies consequently ceased to charge the increased rates as from 1st November 1901, and the pursuers seek by this action to recover from the defenders the difference between the old rates and the increased rates charged by the defenders to the pursuers during the period throughout which those increased rates were charged to and paid by them.
For the purposes of the present question I shall assume that the determinations of the Railway Commissioners above mentioned decided that the increases upon the rates previously charged were unreasonable, and that they would have given a similar decision if the question had been raised before them by an application at the instance of the pursuers against the defenders, although in point of fact no decision
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The pursuers contend that the case is one of condictio indebiti, but I am unable to concur in this view. It was in the exercise of administrative rather than of judicial powers that the Railway Commissioners decided that the increased rates should not be charged. Such a decision could not, in the absence of express statutory authority have been pronounced by a court of law; and it appears to me that if the pursuers have any remedy for recovery of the difference between the rates in question and those formerly charged, that remedy must be obtained from the Railway Commissioners and not from a court of law. The pursuers argue that the case is one of condictio indebiti, the indebitum being the difference between the original and the increased rates, but prima facie railway companies have the power to charge any rates within the limits defined by statute, subject always to the control of the Railway Commissioners if they charge unreasonably high rates. Although the Railway Commissioners may have decided that a particular charge is unreasonable because excessive, it does not follow that there was any antecedent illegality in charging it.
Prior to the passing of the Railway and Canal Traffic Act 1888 the Railway Commissioners had not jurisdiction to deal with a question relating to the reasonableness of a rate, but by section 10 of that Act they were empowered to hear and determine “any question or dispute involving the legality of any toll-rate, or charge, or portion of a toll-rate or charge.” It appears to me, however, that the legality of a toll-rate or charge is not necessarily or prima facie probably the same thing as its reasonableness or unreasonableness, the term “legality” having prima facie reference to some limit or standard defined or specified by law or authoritative regulation. The question of “reasonableness” is a different one, depending upon different considerations.
The Lord Ordinary says that he considers that section 10 of the Act of 1888 includes a rate which is illegal because although it is within the maximum statutory charging power of the Railway Company it is unreasonable, but as I have already stated it appears to me that “illegal” and “unreasonable” are by no means synonymous or interchangeable terms, and that a rate may be unreasonable inasmuch as it may be considered to be higher than the value of the services rendered, without being “illegal,” which appears to me to mean not sanctioned by law, or contrary to some authoritative provision or regulation on the subject.
It is true that the Railway and Canal Traffic Act 1894 provides, with reference to rates increased after the last day of December 1892, that if complaint is made that such increase is unreasonable it shall lie on the company to prove that the increase of the rate or charge is reasonable, and that for that purpose it shall not be sufficient to show that the rate or charge is within any limit fixed by an Act of Parliament or by any provisional order confirmed by Parliament. But this enactment seems to me to recognise and emphasise the difference between “illegality” and “unreasonableness”—the one involving something defined by law, and the other depending upon the application of the standard of what is fair and equitable in the circumstances of the particular case, including the cost and value of the cariage services rendered. The Lord Ordinary states that the question in the case seems to him to be whether a trader who has paid the increased rate under protest is entitled to recover by action the amount which he has paid in excess of the legal rate. If the question was one of the legality and not of the reasonableness, I should have thought that there was much force in the view that any rate which is illegal could be recovered by action at law, because it would be in the proper sense indebitum, but it does not seem to me to follow that a rate which has been decided by a body which like the Railway Commissioners is largely administrative, to be “un-reasonable” can be recovered by an action at law in the absence of some statutory provision that every rate which has been declared by the Railway Commissioners to be unreasonable may be so recovered.
In this connection it may be proper to revert to the provisions of section 12 of the Act of 1888, and of section 1 (5) of the Act of 1894.
Section 12 provides that “Where the Commissioners have jurisdiction to hear and determine any matter, they may in addition to or in substitution for any other relief award
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The provision of the Act of 1888, just referred to, is made applicable by section 1 (5) of the Act of 1894 to such complaints as are therein mentioned.
The Lord Ordinary expresses the opinion (I think rightly), that the Railway Commissioners alone have jurisdiction to determine that an increase of rate is unreasonable, and also that the Legislature intended that the question of damages should be disposed of by the same tribunal, but that after the “legality” of the rate had been determined by the Commissioners, the trader whose complaint had been sustained might then bring an action at common law. I am not sure that the term “legality” is correct or appropriate as here used, but, subject to this doubt, it appears to me that what the Lord Ordinary here says is sound. His Lordship, however, thinks that, assuming that a general claim of damages can only be dealt with by the Railway Commissioners, it does not necessarily follow that the increased rate having been disallowed by the Commissioners the trader who has paid it under protest cannot recover the overcharge. He expresses the view that there is a distinction between a claim of damages and a claim for repayment of an overcharge which has been paid under protest and under the threat that if it is not paid the goods will not be delivered. He continues, “If a trader paid an overcharge without objection it may be that he could only recover damages, but if payment has been extorted from him under protest I think that he can claim repayment on the ground that the money all along belonged to him and ought not to have been in the hands of the railway company.” This appears to amount to treating the question as one of condictio indebiti, and if this was the true category to which it should be referred the conclusion at which the Lord Ordinary has arrived might be correct; but if no judgment or decision has been pronounced declaring the rate to be illegal, and the railway company exacted it as a condition of agreeing to accept the goods for carriage, it does not seem to me that the case is one of condictio indebiti which would give a right of action in this Court, such as the pursuers are now maintaining.
The pursuers further state that the defenders agreed to repay the alleged overcharge in the event of the Railway Commissioners finding the increase of rates to be unreasonable; but their allegations on this point are very vague, and I doubt whether so special an agreement could be proved otherwise than by writ or oath. If such an agreement was made it would in the ordinary course of business have been reduced to writing.
The pursuers further aver that at a meeting which they had at the Board of Trade Offices with the representatives of the defenders these representatives induced them to delay taking proceedings on the ground that a decision would shortly be given by the Railway Commissioners upon the complaints of the seven coalmasters, and that the railway companies were good for the money, i.e., for the increase of rate which had been paid under protest. If it is intended to represent that this constituted an agreement by the defenders to repay any sums which might be exacted in excess of what might be ascertained to be their charging powers, or of what might be held by the Railway Commissioners to be reasonable, it seems to me that such an agreement should, and naturally would, have been reduced to writing, and that it would be unsafe to allow it to be established by evidence of a general conversation.
The Lord Ordinary states that the points which it appears to him that the pursuers require to establish are that they were compelled to pay the rates, and did so under protest and subject to an agreement on the part of the defenders to repay the overcharges in the event of the increased rates being held to be unreasonable. It is not alleged that the defenders used any illegal means to compel the pursuers to pay the rates; and it is plain that what they did was merely to say they would decline to carry the goods in the way in which and to the places to which they had been accustomed to carry them unless the rates which they demanded were paid. If this is all that is meant, the Court is now in a position to judge whether such an averment is relevant to entitle the pursuer to a proof of it, and I think that it is not.
It is not necessary to express or even to form an opinion as to whether the pursuers could recover what they maintain to have been excessive charges by any proceeding before the Railway Commissioners.
For these reasons I am of opinion that there are no disputed averments relevant or sufficient in law to entitle the pursuers to a proof, that the interlocutor of the Lord Ordinary should be recalled, and that the defenders should be assoilzied, or that the action should be dismissed.
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The whole complexion of the question was altered by the Act of 1894, especially in two relations—first, that the jurisdiction was practically transferred from the courts of law to the Railway Commissioners, who, as your Lordship has observed, act as an administrative rather than as a judicial body. The Commission, no doubt, may be regarded as a quasi-judicial body, because they must decide according to the statutes, and there is a right of appeal upon any question of error in law. But they are a body constituted with a view to the decision of commercial matters, and their decision upon all questions of fact or of administration within the statute is final. Such a body is evidently much more capable of dealing with a question of the reasonableness of a rate than a court of law whose traditions and ways of action are altogether alien to such inquiries. But then not only is a tribunal instituted, but a presumption is created that any increase of rates after the last day of 1892 is unreasonable—that is to say, the presumption is that the rate then in existence was a reasonable rate, and it is put upon the company to show that it was reasonable to increase that rate. That condition is a condition peculiar to the jurisdiction given to the Railway Commissioners, and it is one which would not affect our judgment if an action were brought in this Court to determine that a particular rate was unreasonable. Now, the Commissioners having taken evidence on a certain number of applications by different traders, pronounced this general increase of rates to be unreasonable, and cut down the tariff to that of 1892. But in the exercise of the powers given or jurisdiction conferred by section 12 of the Act of 1888 the Railway Commissioners made an order with a view to the assessment of damages. It was not necessary to proceed further under this order as the matter was compromised and payment made by the Railway Companies.
It deserves to be noticed that that power of giving damages is not a power given with special relation to the question of reasonableness of rates. It is a power contained in a different enactment altogether—a general power applicable to all proceedings before the Railway Commissioners—and therefore if we were to exercise that power in this case I suppose we should have to exercise it in every case in which an application might be made to the Railway Commissioners in all questions relating to traffic. That seems rather a large proposition to be established, not by the words of any statute, but by a process of reasoning or inference from a variety of considerations such as have been adduced to us in argument.
The present claim is a claim by other traders who were not before the Railway Commission, but who are in pari casu with the gentlemen who were before the Commission, and they ask us as a court of law to hold them entited to damages. Now, I observe that these gentlemen are not without a remedy, because if the railway companies, while submitting to the award or arbitrament of the Commission in regard to the seven persons who applied to them, were so foolish as to go on to charge the higher rates against the rest of the public, of course everyone who was aggrieved would just present a supplementary petition to the Commissioners in his own name and would at once obtain a reduction of his rates. I am not sure that that question is before us, but perhaps he might even come to a court of law and say, “Now this is an unreasonable rate, and I am not relying on the presumption created by the Act of 1894, but I say this is an unreasonable rate, because it is a higher rate than is being charged to other traders,” and it seems to me there would be a perfectly clear case for resisting such a charge in a court of law. But it is quite a different question whether we could give damages on such an application. I see no ground for such a claim of damages. The only ground is a statutory claim, and that claim can only be adjudicated upon in a statutory way, namely, by the Railway Commission. The reason why that jurisdiction cannot help the pursuers is that there is a statutory limitation of one year, and that period of time has expired. Well, then, we are
Page: 50↓
But the Lord Ordinary seems to make a distinction between the various questions that may be considered by the Railway Commissioners, and he says that they have determined the question of reasonableness, and that what remains for this Court to decide is the right of the pursuers to recover by condictio indebiti the excess of rates which the railway companies have obtained, and which they say was an unreasonable excess. The argument in support of that finding was that the Railway Commissioners have decided that the charges complained of were unseasonable in so far as they went beyond the amount charged on 31st December 1894. That is not so in point of fact. The Railway Commissioners have decided nothing as between the Railway Company and the present pursuers. But it is said they have decided these things at the instance of other traders upon general grounds which are equally applicable to the cases of the present pursuers. I daresay if we were to reason on the grounds of the Railway Commissioners' decision with reference to the materials before us for ourselves, it may be very probable that we should find that the grounds explained by that tribunal might be equally applicable to the present case as to those decided. That may or may not be, but that is a question which I decline to consider, because I think it is altogether outside
Page: 51↓
But if the Commissioners had in fact decided that the rates complained of in this action were unreasonable, I do not think it would advance the pursuers' case in the slightest degree. If that were decided as matter of judgment between the pursuers and the railway companies by the Commissioners it would still give no foundatiou for an action of this kind. The pursuers maintain that the rate charged being in the opinion of the Railway Commissioners unreasonable, it must be held to be illegal, and they are entitled to have it repaid. But this is an entirely new restriction, as I have said, laid on the railway companies. The statute says—You are not to raise your rates beyond the amount charged in 1902 except on condition that if complaints are made before the Commissioners you must show that the increase was reasonable. But the Act does not go on to say that when that is shown the traders who have paid increased rates are to have an absolute right to demand repayment. That is not the remedy the statute gives. The statute says—Where the Commissioners entertain a complaint and find it to be well founded, they may award the complainer who is aggrieved such damages as they find him to have sustained, and such award of damages shall be in complete satisfaction of any claim for damages, including repayment of overcharges. And therefore there is by the statute no absolute rule for repayment of overcharges at all. The case that must be put before the Railway Commissioners, and which the Commissioners have to determine, is what amount of damages has the aggrieved trader suffered, and their award may be more or less than the amount actually paid, but whether the amount actually paid is to be repaid or not in the shape of damages must depend, according to the statute, upon the Commissioners being satisfied that such damages ought to be awarded. And therefore it appears to me that an action in this Court founded on the assumption that there is an absolute right to enforce repayment of the overcharges is entirely excluded by the Act of Parliament. That is not the right of the complaining trader. His right is to go to the Railway Commissioners and have the whole matter he is complaining of examined by them; and it is for them, and them alone, to consider the amount of pecuniary relief, if any, which the aggrieved trader is entitled to receive.
Upon the second question which the Lord Ordinary has determined I agree with your Lordships. I think the averment of any special agreement which can be enforced in this Court is altogether irrelevant. I think it irrelevant altogether apart from the opinion your Lordship has expressed as to the manner in which alone it could be enforced—an opinion in which I entirely agree. But I think it follows, from the view I have taken, that no alleged agreement could entitle the pursuer to recover in an action of this kind in this Court, short of a specific contract that the Railway Company would repay a specific charge in the event of its being found at the instance of other traders that the charges made against them involved an unreasonable increase of rates. There is nothing in the least approaching to any specific averment which would enable the pursuers to recover on the ground of contract.
I therefore agree with your Lordship that the Lord Ordinary's interlocutor cannot be sustained, but I rather think that the consequence ought not to be the dismissal of the action, but rather the absolvitor of the railway companies, because we do not dispose of this action merely on the ground of irrelevancy, which might leave it open to have another action with the same conclusions but with more specific averments against the companies, but on the ground of no jurisdiction, and that gives right to the defenders to be assoilzied from the whole conclusions.
The Court pronounced a decree of absolvitor.
Counsel for the Pursuers and Respondents, The Lanarkshire Steel Company— Dundas, K.C.— Strain. Agents— Drumond & Reid, W.S.
Counsel for A. G. Moore & Co.— Ure, K.C.— Horne. Agents— Drummond & Reid, W.S.
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Counsel for the Defenders and Reclaimers, the Caledonian Railway Company— Clyde, K.C.— Cooper. Agents— Hope, Todd, & Kirk, W.S.
Counsel for the Glasgow and South-Western Railway Company— Guthrie, K.C.— Hunter. Agent— James Watson, S.S.C.
