Scottish Court of Session Decisions

In 1830, an agreement was entered into between Robert Jolly, surgeon in Edinburgh, for himself, and as administrator for his son, on the one part, and William Young, coalmaster, on the other part, by which Jolly bound himself to grant a lease of coal for 30 years, “at such rent and lordship, and on such other terms and conditions, as can be mutually agreed on; or, failing a mutual agreement, at such, rent or lordship, and on such terms and conditions, as shall be fixed and ascertained to be equitable and proper by Messrs Robert Bald and John Baird, engineers.”

Prior to 13th June, 1831, various proceedings were adopted by the referees, on the application of Jolly, to which Young successfully objected as irregular and premature. On that day the parties met, and by a minute agreed “each to lay a draft lease before the referees.” After considerable discussion before the referees, they issued a decree-arbitral, containing the terms of an adjusted lease, Hugh Handyside, W.S., clerk to the submission, before giving up the decree to Jolly, insisted on payment of an account incurred to each of the arbiters, and to himself as clerk, amounting in all to £84, 4s. 11d. Jolly paid the account, and got up the decree and lease. The account embraced the proceedings prior to 13th June, 1831, as well as subsequent thereto. It included charges by the arbiters for inspecting the coal-field; discussing with each other the principles of the lease; certain travelling expenses; correspondence with each other, and with the agents of the parties, charged apparently by one of the arbiters on the terms of a law-agent's correspondence, and by the other arbiter in one slump fee; revising the draft of the lease, &c.

Jolly raised an action against Young to relieve him of one-half of the account paid to Handyside, libelling that Messrs Bald and Baird had acted “as referees,” and had pronounced “a final award and decree-arbitral,” and that “there was incurred to the said referees respectively an account for their professional services and trouble in the said reference.”

Young pleaded several special defences, and also this general defence, that the sum due to the referees was of the nature of a honorarium, and was not legally exigible by an arbiter; that Jolly could acquire no higher right by paying the arbiters, than if they had assigned to him their right to pursue; and that as they could not themselves have pursued, Jolly had no title to do so. ¹

Young did not dispute that the sum paid was reasonable in amount, if it could be held to be legally exigible at all; but in reference to the account incurred prior to 13th June, 1831, he objected to any liability whatever, as it arose out of irregular procedure on the part of Jolly.

Jolly pleaded, that as the reference was to professional engineers, it must have been in the contemplation of all parties, in making it, that the referees were to receive a remuneration for their trouble. The reference was not a case of pure arbitration, but partook much of the nature of a judicial remit, of consent, to any professional party to make a report; a common course of proceeding, which always implied liability for remuneration. But, separately, even if it were a proper arbitration, there was at least the obligation of recompense incumbent on the parties towards the arbiter; and one party having fulfilled that moral and honourable obligation, and paid the whole fees, was entitled to be relieved by the other party of the one half.

Jolly attempted to show that the procedure prior to 13th June, 1831, had truly been available to both parties in the subsequent proceedings.

The Lord Ordinary “found the pursuer entitled to one half of the expenses of the arbitration subsequent to the 13th day of June, 1831, as paid to the arbiters and the clerk, with interest from the date of payment, as libelled; quoad ultra, assoilzied from the conclusions of the libel, and decerned; remitted to the clerk to make a state of the sum due to the pursuer under this finding; and found the pursuer entitled to expenses, subject to modification.”

Young reclaimed.