Scottish Court of Session Decisions

At advising on 13th November 1936,—

LORD JUSTICE-CLERK (Aitchison).—The pursuer, who was incoming tenant of the farm of Clifton Hill in the Parish of Ednam at the term of Whitsunday 1934, seeks to set aside a decree-arbitral consisting of (1) an interim award dated 21st July 1934, (2) an interim award dated 9th January 1935, and (3) a final award dated 14th May 1935, pronounced in a submission dated 18th May 1934, which was entered into between the defender as outgoing tenant of the first part and the pursuer as incoming tenant of the second part. The ground of reduction alleged by the pursuer is that the arbiter appointed thereunder has failed to exhaust the submission, and that the said interim and final awards are therefore reducible as being invalid. The submission was a formally executed contract, and by its terms the parties referred to Mr John Stoddart Dickson as sole arbiter first what sums should be paid by the incoming to the outgoing tenant as the value of the corn crop of the year 1934, 10 acres of grass sown with the corn crop of 1933, and certain machinery and other items all as particularly specified, and second "(One) the sum if any to be paid by the first party [the outgoing tenant] to the second party [the incoming tenant] as necessary to put the buildings on the farm including the painting of the outside woodwork of the said buildings into the state provided for in the said Agreement and Conditions of Let [that is, the Agreement and Conditions of Let between landlord and tenant]; (Two) the sum if any to be paid by the first party [outgoing tenant] to the second party [incoming tenant] as necessary to put the outfalls or drains into the state provided for in the said Agreement and Conditions of Let … with power to the said arbiter to receive the claims of the parties and to hear them thereon and to take all manner of probation he may consider necessary for determining the matters hereby submitted to him as aforesaid."

In pursuance of the submission the arbiter issued three awards, two of them being interim awards and the third a final award, dated as

aforesaid. The first interim award proceeds on the narrative that the arbiter has "examined the undernoted," being the machinery, 10 acres of grass and other specified items. The second interim award proceeds on the narrative that the arbiter has "carefully examined the white crop when ready for cutting." The final award proceeds on the narrative that the arbiter has "carefully examined the grain crops when ready for cutting." These awards cover all the matters referred under the first branch of the submission. The awards are silent as to the matters of buildings, drains or outfalls referred to the arbiter under the second branch of the submission. The Lord Ordinary has upheld the validity of the decree-arbitral and dismissed the action, sustaining the defender's plea to the relevancy; the pursuer now reclaims and maintains that he is entitled to decree of reduction de plano.

The first question to be decided is—What does the decree-arbitral cover? I shall use the singular to include the three awards. Now, it is plain on the face of it that the decree-arbitral makes no mention of the matters second referred. There is no mention of buildings, or outfalls or drains, or of any sums to be paid to put them into tenantable condition and repair, or whether no sums fall to be paid, or whether the arbiter has considered the second branch of the submission, which is something entirely independent of and separate from the first branch, and, having considered it, has made no order in respect that nothing falls to be paid thereunder. Upon these matters the decree-arbitral is silent, so that it would not occur to anyone reading the awards that there had been any question of buildings or drains, or any counter claim in the submission, to be adjudicated upon.

It is maintained by the defender that the necessary and only inference from this silence is that the arbiter has decided that no sum falls to be paid under the second branch. I am quite unable to accept this contention. There may be cases in which it can be said that, although an arbiter has not dealt specifically with certain items of claim, he has included them in his award or rejected them altogether. If, for example, an arbiter were to say, "I have considered all the items of claim and the items in which I find sums due are these," it would follow by necessary implication that no sums were due except where mentioned. But it is a very different case where, on the face of the award, there is nothing at all to indicate decision, or, as here, even consideration. In such a case it would be dangerous to draw an inference from silence that the arbiter had decided that no sum was due. It was said indeed that the form of the question in this case allowed of no answer being given. It was "the sum if any to be paid" that was to be fixed by the arbiter. But this leaves out of account that what the parties contracted inter se to get was the decision of the arbiter, and, if the arbiter found that no sum was payable under branch two, he should have said so and not left the matter in uncertainty.

The defender relied on the case of the Duke of Beaufort, in which

there were referred two separate matters, first, the sum to be paid by trustees for land purchased by them, and, second, "what other, if any, sum" should be paid on account of severance. The award was silent as to the latter, but it proceeded on the preamble, the umpire "having heard the parties and having weighed and considered the evidence and matters so referred to me," which of course included all the matters in the submission, the submission being recited in the award. This it seems to me was clearly the foundation of the opinion of Erle, C.J., who thought that an inference might be drawn, having regard to these words, that no sum was to be paid on account of severance and that the umpire had so decided. I am not sure that Williams, J., and Willes, J., can be read as laying down, as was suggested, that, where there is no indication in the award of consideration, silence can be taken as tantamount to a negation of the claim. In Harrison v. Creswick in the Exchequer Chamber, the award ordered the payment of a gross sum to the plaintiff, and nothing was said regarding a cross-claim by the defendant. Parke, B., stated the principle thus (at p. 416):—

"The rule is this—where there is a further claim made by the plaintiff, or a cross-demand set up by the defendant, and the award professing to be made of and concerning the matters referred is silent respecting such further claim or cross-demand, the award amounts to an adjudication that the plaintiff has no such further claim, or that the defendant's cross-claim is untenable; but where the matter so set up from its nature requires to be specifically adjudicated upon, mere silence will not do."

The important words are the words I have italicised. We were referred to no case, and so far as I know there is none, in which the negation of a claim has been inferred from silence where the award did not recite the submission or profess to be "of and concerning the matters referred." In Pollich v. Heatley, Lord President Dunedin (at p. 481) explained the rule thus:—

"Parties who go into a contract of submission oust themselves from their natural right of appeal to the tribunals of the country; and therefore it is only fair that, when they do that, they should be entitled to insist that the arbiters before whom they go will make a complete job, so to speak, of what is put before them. Accordingly, where various disputes are submitted and an award goes out which is a final award, if that award does not deal with some of the matters submitted, then it cannot stand—even so far as it does deal with matters submitted—because it has not exhausted the submission."

This rule was also affirmed by the decision of this Division in Miller v. Oliver & Boyd, where a decree-arbitral was set aside, the decree being for a lump sum on claims which were not ejusdem generis, and there being no mention in the decree of a counter-claim which had been included in the reference.

In dismissing the action the Lord Ordinary has proceeded upon the ground that the proper inference to be drawn from the absence of any decerniture under the second branch is that the arbiter was satisfied

that no sum was payable thereunder. This inference is, in my opinion, unwarranted, particularly so as each of the three awards deals expressly with the first branch only, and there is no reference direct or indirect to the second branch. How can inadvertence be excluded? How can it be said with any certainty that the arbiter not only applied his mind but made up his mind on the matters second referred when the decree says nothing about them? Nor can any inference be drawn from the designation of the third award as "final award." It is only when there is issued what purports to be a final award that the question can ever arise. I am against the Lord Ordinary upon this aspect of the case.

The defender moved alternatively that he was entitled to a proof of his averments contained in answer 5 so as to put the Court in possession of certain facts in the light of which the decree-arbitral could be construed. It is proposed to prove that the arbiter visited the farm on two occasions, on the first of which he inspected the buildings and drains and noted the repairs which required to be done. On the second occasion he again inspected the buildings and drains and found that the defects had been remedied to his satisfaction. Now, in so far as proof is desired in order to establish the fact of visit and examination it would not be open to objection, but I am unable to see that it could be of any value. On the other hand, in so far as it is sought to show by proof that the arbiter decided that the repairs were satisfactory so that no sum was due, proof would be plainly incompetent. In the Duke of Buccleuch Lord Chancellor Cairns approved of the law as stated by Cleasby, B., and he expressed it thus (at p. 462):—

"He"

[that is the arbiter or umpire] "was properly asked what had been the course which the argument before him had taken—what claims were made and what claims were admitted; so that we might be put in possession of the history of the litigation before the umpire up to the time when he proceeded to make his award. But there it appears to me the right of asking questions of the umpire ceased. The award is a document which must speak for itself, and the evidence of the umpire is not admissible to explain or to aid, much less to attempt to contradict (if any such attempt should be made) what is to be found upon the face of that written instrument." Now, the matter seems to me to stand in this way. Proof of visit and examination really proves nothing, whereas proof that the arbiter was satisfied with the repairs done, and inferentially that he was satisfied that no sum was due, is just proof of what the arbiter has decided, and that, on the rule laid down by Lord Cairns, is what cannot be done. The arbiter's award must speak for itself, and it cannot be aided or eked out by extrinsic evidence of what the arbiter has in fact decided. What the defender is here seeking to do is, not to establish facts to explain an ambiguous award, for on the face of the award there is no ambiguity, but to remedy an omission from the award by showing that the arbiter has decided something which the

award does not contain. In my opinion that is an incompetent proceeding, and the defender's motion for inquiry must be refused. It may be that there is a want of elasticity in the law of arbitration which prevents the Court in a case like this remitting to the arbiter to ascertain whether he has decided the second matter and inadvertently omitted it from his decree, but we can only deal with the case as the law exists, and, so dealing with it, I can see no answer to the pursuer's case that the decree-arbitral is invalid and must be set aside. I think that the reclaiming motion must be allowed, and decree of reduction granted de plano.

LORD PITMAN .—I need not repeat the circumstances under which this action of reduction is raised.

The pursuer, the incoming tenant, contends that it is manifest on the face of the award, which bears to be final, that the arbiter has failed to dispose of the second branch of the matters remitted to him for his amicable decision and final sentence. It is trite law that an arbiter must exhaust the subject-matter of the reference, and the award says nothing about this branch of the matters remitted for decision. The defence is that, in view of the terms of the submission, the arbiter has done all that he was called on to do. The second head of the matters remitted was, it is said, to determine what sums, "if any," were payable by the outgoing tenant for dilapidations and to put the drains in order, and that, if the arbiter found nothing due, he was not bound to say nothing was due. It seems a pity that he cannot now be asked to consider the question, if he has not already done so, but it was conceded by the defender's counsel that such a course would not be a competent one. The defender asks for decree of dismissal on consideration of the award and submission; alternatively, he asks for an inquiry as to what passed when the arbiter inspected the buildings and drains. The arbiter had two distinct things to do—(1) to value certain specified items taken over by the incoming tenant, and (2) to decide whether anything was due by the outgoing tenant to put the buildings and drains into proper order. If there is one thing clear in arbitration law, it is, I think, this, that the award must be interpreted as it stands, and that it is not competent to inquire from the arbiter what he meant by the words he used. The inquiry asked for by the defender cannot, I think, be allowed. There is no relevant averment of facts in dispute which require to be proved. It is common ground that the arbiter inspected the buildings and drains, and that it was remitted to him to say what was payable by the outgoing tenant to put the buildings on the farm, including the painting of the outside woodwork of the buildings, into the state provided for by the agreement and conditions of let, and what was payable in respect of the outfalls or drains. The defender, however, avers that, when the arbiter visited the farm on the second occasion, he inspected the buildings and drains, and found "that the defects which he had noted on the first occasion had been remedied to his satisfaction." If this is not an attempt to prove what the arbiter decided or, in the words of Lord Cairns in the case of the Duke of Buccleuch v. The Metropolitan Board of Works, to aid the written instrument, I do not know for what purpose the proof of the fact is asked. That that is the defender's desire appears from the next sentence in the defences, to the effect that the arbiter had accordingly no award to make under head 2 of the submission—that is to say, having decided that there was no sum due. In the words of Lord Kinnear in the case of Clippens, quoted by the Lord Ordinary, no question can be put to the arbiter for the purpose of proving how the award was arrived at, or what items it included, or what was the meaning which he intended to give to it.

The Lord Ordinary holds that the pursuer has not relevantly averred that the arbiter did not consider the questions raised under the second head of the submission, and that he would have allowed him a proof of such an averment if it had been made. I think it would have been just as incompetent to allow a proof that the arbiter did not consider the question as to allow a proof to the defenders that he did. The question raised is one in which the award has to be interpreted without the assistance of oral evidence on one side or the other.

I therefore agree that the defender cannot be allowed a proof, and that, taking the award as it stands, it is clear that the arbiter has not in his award done what he ought to have done, viz., said what sums, if any, were payable under the second branch of the submission. When dealing with the first branch he clearly states in his interim award and final award that he has carefully examined the subjects specified, and then proceeds to put a value upon the subjects. It was, I think, his duty as clearly to examine the buildings and drains, and to say that he had inspected the buildings and drains, and what his decision was in regard to this counter-claim by the incoming tenant. The arbiter having failed to adjudicate on this head of the submission, his award must be set aside.

LORD WARK .—I agree in thinking that the awards of the arbiter cannot stand. The submission dealt with two quite separate and different sets of claims—the one by the outgoing tenant against the ingoing, and the other by the ingoing tenant against the outgoing. The interim awards deal with certain items of the former set, and the final award deals specifically with one of those items. It contains not a single word to show that the arbiter has considered the second set of claims, or that he has considered the whole of the claims submitted to him. The case appears to me to be worse than if the arbiter had awarded a lump sum without mentioning to what particular items of claim it applied. If he had done so in dealing with claims not ejusdem generis, the award could not have been sustained—Miller & Son v. Oliver & Boyd . Here the arbiter, on the face of the final award, has confined himself to dealing with a single item of the first head

of the submission. In my opinion, it is not possible, in these circumstances, to say whether he has considered and rejected the counterclaims or has merely omitted to deal with them. The fact that the award bears to be a final award does not appear to me to aid, to any extent, the former of these conclusions. Nor, in my opinion, does the form of the submission. Under the first head of the submission the task of the arbiter was merely one of valuation, and his awards, interim and final, are all in the form of valuations of specific articles. Under the second head, he is directed to ascertain the sums due, if any, in respect of repair of (1) buildings and (2) drains. On this part of the reference he had the double task of deciding whether any sum was due, and if so what sum, in respect of each of these items. The difference between this and the first head appears to me to make it all the more difficult to construe his silence on the second head as meaning that he had considered these claims and found nothing due under either of them. The Lord Ordinary founds upon Gray v. Brown and Paul v. Henderson as authorities for the view that there is a presumption that an arbiter intended that his final award should be exhaustive, and that the Court will therefore be disposed to construe an award as embracing and disposing of all the matters submitted, if it can reasonably admit of that construction. But it is noteworthy that in each of these cases the award contained a general expression which afforded material for construction. In Gray v. Brown the arbiter had repelled all other claims between the parties to the submission. In Paul v. Henderson the arbiter expressly repelled all claims hinc inde beyond those he specifically dealt with. In the case of Duke of Beaufort v. The Swansea Harbour Trustees all the judgments proceeded on the view that the award contained general words sufficient to cover all claims. No case was quoted to us in which, in the absence of some such general words, an award was held to be exhaustive as disposing of claims not specifically dealt with.

I agree also with your Lordships in thinking that there is no duty upon a party challenging an award as not exhaustive to aver that the arbiter did not, in fact, consider a question with which the award does not bear to deal. The award must stand and speak for itself; and it would be strange if the law required as a condition of the relevancy of the pursuer's case that he should aver what it is incompetent to prove. I can find no real divergence of opinion between the Scottish and the English Courts on the question of what is, and what is not, permissible by way of inquiry into the proceedings in an arbitration. In the exceptional case, where the award is attacked on the ground that the arbiter has proceeded ultra vires of the submission, it is competent to inquire into the question whether the arbiter considered and gave effect to a claim not submitted to him. But where the question is as to whether a particular claim or claims have been dealt with in an award which is not alleged to be beyond the terms of the submission, the

evidence of the arbiter is inadmissible. In Miller & Son v. Oliver & Boyd the arbiter had been examined as a witness and had given the items of which the slump sum awarded by him was composed. Lord Trayner remarked (at p. 89), "The arbiter cannot as a witness make his decree any better than it stands when issued. That decree must be read and construed as issued, and its validity determined as at the date of its issue without any explanation or addition which does not appear on the face of the decree itself." There are certain expressions of opinion in the case of Duke of Buccleuch v. Metropolitan Board of Works which were founded on by the respondent as supporting his motion for proof of his averments in answer 5. He founded particularly upon the opinion of Cleasby, B., and upon the speech of Lord Cairns. I am satisfied that, when these learned judges spoke of evidence as to what claims were made and admitted, they meant admitted for consideration and nothing more. It must be remembered that in that case the award was challenged on the ground of ultra vires. It was therefore necessary that the Court should be put in possession of the history of the litigation before the umpire up to the time when he proceeded to make his award. But that would, it seems to me, be a useless inquiry in this case if, as Lord Cairns said, the right to ask questions of the arbiter ceased there. "The award," he says (at p. 462) "is a document which must speak for itself, and the evidence of the umpire is not admissible to explain or to aid, much less to attempt to contradict, … what is to be found upon the face of that written instrument." It is, I think, useless to inquire what operations had taken place upon the buildings and drains during the course of the reference. The arbiter had still to make up his mind what was the effect of any such operations upon the second head of the claim; and it is, in my opinion, plain upon the authorities that he cannot be asked any question on that matter with a view to aiding the explanation or interpretation of his award.