Scottish Court of Session Decisions

The Trade Union Act 1871 (34 and 35 Vict. cap. 31), sec. 4, is so far as material, quoted supra in rubric.

On 23rd December 1918 Joseph James Johnston, plumber, gasfitter, and bellhanger, Crown Street, Aberdeen, brought an action against the Aberdeen Master Plumbers' Association, 80 Union Street, Aberdeen, in which he craved the Court—(1st) To find and declare that he was a member of the Aberdeen Master Plumbers' Association, that he was entitled to all the benefits and privileges of membership of the Association, and in particular that he was entitled to have his name and address, as being those of a member of the Association, duly entered in the lists of members published or issued by the said Association; and (2nd) to interdict, prohibit, and discharge the defender from publishing or issuing any list of the members of the Association unless the name and address of the pursuer were included therein; and to grant interim interdict.”

The circumstances in which the case arose, as narrated by the Sheriff in his note ( infra), were as follows—“By minute of agreement, signed in July and August 1918, the pursuer sold his business to a copartnership of six individuals, of whom he himself is one. The agreement provided for the continuance of pursuer's business of master plumber, which he had carried on in Aberdeen for fifteen years. He was taken bound to devote his whole time and attention to the business, and in return was to be paid a salary over and above his stipulated share of profits. It was also provided that so long as he should remain a partner he should represent the firm at the Aberdeen Master Plumbers' Association, of which he had been a member since 1903. The fact that some change had occurred in the pursuer's business reached the Association apparently about the end of August, and on 31st August an inquiry upon the nature of the change was directed to the pursuer by the secretary. The result was that the pursuer attended a meeting of the defenders' committee on 3rd September and explained the new situation; after which, as the minute bears, ‘the committee considered the matter, and decided that in their view the old firm had been dissolved and a new firm constituted, and that it would be necessary for the new firm to apply for membership in the Association.’ On 5th September the pursuer addressed two letters to the Association—the first on behalf of his firm, intimating disagreement with the committee's view that an application for membership by the firm was necessary, …; the second on his own behalf, stating that he desired to withdraw from the membership of the Association on the entry of his firm as members. … These letters were taken into consideration by the committee of the Association on 10th September, when it was decided (1) that the new firm was not eligible for membership, and it was accordingly refused admission to the Association; and (2) that pursuer had ceased to be a member of the Association, and that he would therefore be settled with for the amount standing at his credit in the books in terms of the rules of the Association. Some correspondence ensued upon this letter, in the course of which the pursuer maintained that his membership had not ceased, and (being invited to do so) appealed against the committee's determination to a general meeting of the Association—without prejudice to his rights otherwise. On 17th October the committee's view of the matter was upheld by the general meeting, and the present proceedings are the result.”

The rules of the Association contained, inter alia, the following provisions:—

“ Rules.

I. Constitution.—The Association shall be composed of master plumbers or firms of master plumbers in Aberdeen and suburbs, and shall be named ‘Aberdeen Master Plumbers' Association.’

II. Objects.—The objects of the association shall be, by mutual counsel and co-operation, to promote and protect the interests of the members, and also as far as possible to secure unity and harmony of action in the settlement of questions arising between members and their workmen, with a view to prevent the occurrence of lockouts or strikes.

III. Membership.—Master plumbers or firms of master plumbers desiring to join the Association shall make application to the secretary in writing and give all required information, and if found eligible and be approved shall be admitted by the committee. Any decision of the committee admitting or rejecting an applicant may be overruled, and the applicant may be rejected or admitted by the Association Upon a member becoming bankrupt or granting a trust deed for behoof of creditors, or dissolving partnership, or ceasing to carry on business as a master plumber or firm of master plumbers in Aberdeen, such member shall thereupon cease to be a member of the Association, and the name of such member shall thereafter be deleted from the roll of members; but any member or partner of a dissolved firm whose name is so deleted may, upon making application as aforesaid, and if found eligible, be re-admitted to membership as at such date and upon such payments and conditions as the committee shall consider fair and reasonable. Any decision of

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the committee upon any application for re-admission shall be subject to review by the Association as in the case of an ordinary application for membership.

VII. Meetings.—… Only one member of a firm shall be entitled to vote at any meeting. A firm may be represented at all meetings and act in all matters relating to the Association by and through any person approved by the committee whom the firm may expressly or by implication authorise to represent and act for them. At least ten days' written notice shall be given to the secretary of any proposed change of representative of a firm.….

VIII. Funds.—All funds of the association not required to meet expenses of management or administration and not allocated to members, or falling to be allocated among the members in accordance with the rules or bye-laws for disposal of the same, may be disposed of as the members resolve or direct at any general meeting of the Association.….

XV. Disputes with Members.—All disputes arising with members or their representatives with reference to the rules or bye-laws of the Association, or to their rights or obligations under the same, shall be submitted and referred to the committee, whose decision shall be final and binding on all parties.”

The bye-laws relating to estimates provided, inter alia, as follows:—“I … ( d) Disposal of Estimate Fees.—1. As soon as conveniently may be after the annual general meeting in each year after 1912 there shall be allocated equally among the members as appearing on the roll of members, as the same may be approved at such annual meeting, … such proportion or part as the Association may fix of the net amount of all moneys received as aforesaid… 4. On the expiry of three months after he has ceased to carry on business as aforesaid, the amount previously allocated to a member as aforesaid, but under deduction of all sums due or that may become due or payable by him to the Association, shall be payable as follows:—Either to the member himself, or if he be dead to his executor; or, in the option of the Association, the same may be paid to the member's wife, widow, or children, or any of them. …”

The pursuer averred, inter alia—“(Cond. 5) It is one of the bye-laws of the said Association that ‘members shall not support wholesale merchants or manufacturers who trade with plumbers in Aberdeen who are not members of the Association,’ and there is a corresponding agreement or understanding between the Association and such wholesale merchants or manufacturers that the latter shall not supply goods to persons carrying on business as plumbers in Aberdeen who are not members of the Association. There is also an agreement between the said Association and the Operative Plumbers' Association that employees shall not work within the city for anyone who is not a member of the defenders' Association, and that members of the defenders' Association shall not employ non-union men. In accordance with these agreements or understandings and for other trade purposes it is the practice of the defenders to issue from time to time lists of its members to such wholesale merchants and manufacturers, and the said lists of members are made known to the Operative Plumbers' Association. Such wholesale merchants and manufacturers will not supply goods to any persons carrying on business in Aberdeen as a plumber who does not appear on such lists as a member of the Association, and similarly operative plumbers who are members of the Operative Plumbers' Association will not work for anyone who is not a member of the defenders' Association. Unless therefore the pursuer is recognised as a member of the defenders' Association his business will suffer complete extinction and total ruin.”

The defenders stated—“(Stat. 12) Defenders believe and aver that the purchasers of pursuer's business who now compose the firm of J. J. Johnston are the partners of the Bon-Accord Acetylene Gas Company, Aberdeen, none of whom is a practical plumber or eligible for admission to membership of the Association.”

The pursuer pleaded, inter alia—“1. The pursuer being a member of the said Master Plumbers' Association, and it having been intimated to him by the said Association that the committee thereof has concluded that he is no longer a member of the said Association, having declined to recognise his claims to membership, he is entitled to decree of declarator as craved. 2. The pursuer having reason to apprehend injury to himself and his business on account of his exclusion from membership of the said Master Plumbers' Association, and on account of the omission of his name from the lists of members issued and published from time to time by the said Association, he is entitled to decree of interdict as craved.”

The defenders, inter alia, pleaded—“1. The defending Association being a trade union the action is incompetent. 2. The dispute between pursuer and defenders having in terms of the rules of the Association been submitted and referred to the committee whose decision as provided in said rules is final and binding, the present application is incompetent and should be dismissed. 3. The committee having in terms of the rules decided that pursuer has ceased to be a member of the defenders' Association, the present application should be dismissed. 4. Pursuer having ceased in terms of the rules to be a member of the defenders' Association is not entitled to the declaration craved.”

On 27th June 1919 the Sheriff-Substitute ( Young) repelled the first and second pleas stated for the defenders, and granted leave to appeal.

On 29th November 1919 the Sheriff ( M'Clure), to whom the defenders had appealed, adhered to his Substitute's interlocutor.

Note.—[ After the narrative quoted ut supra]—“The present appeal is taken from a judgment of the Sheriff-Substitute by which he repelled the first and second pleas-in-law

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stated for the Association and (without more) granted leave to appeal. These pleas are both in terms directed to the competency of the action, and the second may, I think, be disposed of at once. It is presumably based upon the 15th rule of the Association, which provides that ‘all disputes arising with members or their representatives with reference to the rules or bye-laws of the Association, or to their rights or obligations under the same, shall be submitted and referred to the committee, whose decision shall be final and binding on all parties.’ It is probably enough to say that there never was any submission or reference to the committee in terms of this rule, nor is it averred that there was. The correspondence and minutes do not suggest it anywhere, and so far from the committee's decision being regarded as final and binding, the secretary informed the pursuer, by letter of 17th September, that if he was dissatisfied with the finding of the committee ‘you can, as you are doubtless aware, in terms of the rules, bring the matter before the Association,’ I have not succeeded in discovering any rule which gives an appeal to the Association from the committee's ‘final and binding’ decision under the 15th rule, and the fact that the pursuer was offered and accepted the chance of a revision of the committee's determination by the Association fortifies my opinion that the idea of a submission or reference was in nobody's mind at the time. Under reference therefore to the Sheriff-Substitute's note for additional reasons, I agree that the second plea was properly repelled.

The first plea is that ‘the defending Association being a trade union, the action is incompetent.’ The plea is not exact, but the meaning is obvious, and it was developed in argument. It is said that the Association, which in my opinion falls plainly within the statutory definition of a trade union, would but for section 3 of the Trade Union Act 1871 have been an unlawful association by reason of its purposes being in restraint of trade, and that the present proceedings cannot be entertained as they have been instituted with the object of directly enforcing an agreement of the description specified in section 4 of the Act. As regards the first point, I think the rules and bye-laws furnish conclusive evidence. The freedom of the individual trader who joins the Association is greatly curtailed in his methods of conducting business. As before stated, a member cannot order goods from wholesale merchants or manufacturers who supply traders in Aberdeen who are not members of the Association. He cannot do jobbing work at his own price, but only at rates fixed by the Association. He must decline to tender for work unless the plumber's furnishings and fittings are to be supplied by the plumber contractor. He must decline to tender for competitive work unless it is measured and scheduled, and the system of measuring and scheduling must be approved by the Association, and be in accordance with their model schedule for the time being. In estimating for plumber work the member must add 2 1 2 per cent. as an estimate fee, and hand this over to the Association. These are instances of the trade restraints imposed on members; many more could be given, but I think these suffice to show that at common law the Association would have been deemed unlawful— Glasgow Potted Meat Society v. Geddes, 1902, S.L.T. 481.

The critical question remains—Are the present proceedings barred by section 4 of the Act of 1871? The actual position has not been very clearly defined, and it requires some explanation. The exclusion of the pursuer from the Association was not an expulsion in the ordinary sense of the term for the breach of any rule or bye-law; it was the result of what the pursuer alleges was a misinterpretation by the committee of his contract with the Association. Rule 3—under which the committee proceeded—is (so far as relevant to the present issue) in these terms—‘Upon a member … ceasing to carry on business as a master plumber, or firm of master plumbers, in Aberdeen such member shall thereupon cease to be a member of the Association, and the name of such member shall thereafter be deleted from the roll of members.’ The question accordingly is whether the pursuer on the sale of his personal business of ‘J. J. Johnston’ to a firm of the same name, which includes himself as the practical partner, ceased, upon a sound construction of the rule, to carry on business as a master plumber or firm of master plumbers? The rule has not yet been authoritatively construed, and the ‘object’ of these proceedings (as I understand them) is to have it. construed, not to directly enforce an agreement. The validity of this distinction is clearly recognised by the House of Lords in Yorkshire Miners' Association v. Howden, (1905) AC 256; also in Osborne v. Amalgamated Society of Railway Servants, (1911) 1 Ch 540; and Kelly v. National Society of Operative Printers' Assistants, (1915) 31 T.L.R. 631. In the case first cited Lord Macnaghten used words which I consider to be fairly applicable to this case—‘Then I come to the question, what was the “object” of the present litigation? Was it to enforce an agreement for the application of the funds of the union to provide benefits to members? I should say certainly not. The object of the litigation was to obtain an authoritative decision that the action of the union which was challenged by the plaintiff was not authorised by the rules of the union. The decision might take the form of a declaration or the form of an injunction, or both combined. But the decision, whatever form it might take, would be the end of the litigation. No administration or application of the funds was sought or desired.’ The complaint of the pursuer is that he has been wrong fully deprived of his status and position as a member of the association, and I think he is entitled to test in the present action the construction of the rule which led to his exclusion. If he should succeed, a declarator that he is a member, and consequently entitled to all the rights and

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privileges of membership, may be competently granted, including even the right to have his name and address in any list of members published by the Association. It must, however, be kept in view that the Court cannot enforce directly by interdict or otherwise any agreement specified in section 4 of the Act.”

Thereafter on 22nd January 1920 the Sheriff-Substitute repelled the remaining pleas stated for defenders, granted decree in terms of the first crave of the initial writ, and found it unnecessary to deal with the conclusion for interdict.

The defenders appealed.

[At the hearing on the appeal counsel for the defenders stated that he did not now contend that the action was excluded by rule 15, no reference to the committee in terms of that rule having taken place. He also stated that he did not found on section 4 (3) ( a) of the Trade Union Act 1871.]

Argued for appellants—(1) There was no doubt that this society was illegal at common law. That was clear from the cases of Aitken v. Associated Carpenters and Joiners of Scotland, July 4, 1885, 12 R. 1206, 22 S.L.R. 796; Rigby v. Connol, 1880, L.R., 14 C.D. 482; and Chamberlain's Wharf, Limited v. Smith, [1900] 2 Ch 605, which were all applications of the rule laid down in Hilton v. Eckersley, (1855) 6 E. & B. 47. That being so, the action except in so far as sanctioned by the Trade Union Act 1871 (34 and 35 Vict. cap. 31) would not be entertained by the Court. (2) The action was incompetent, as section 4 of the Trade Union Act 1871 struck at any legal proceedings for the enforcement of agreements between members— Smith v. Scottish Typographical Association, November 7, 1918, 1919 S.C. 43, 56 S.L.R. 46; Rigby; Chamberlain's Wharf, Limited. All disputes between members relating to the method of carrying on the business of the union, or as to their patrimonial rights in the funds of the union, or as to the interpretation of the rules of the union, were for the union itself to decide, and could not be submitted to the jurisdiction of the Court—Trade Union Act 1871, sec. 4. The object of the present action was to enforce, directly or indirectly, the patrimonial rights of the pursuer under the agreement, and the action therefore was incompetent— Aitken; G. & J. Rae, Limited v. Plate Glass Mercantile Association, March 18, 1019 S.C. 426, 56 S.L.R. 315; Rigby. What the Court had to consider was not the form of the action but its object, and if the real object of the action was to obtain any personal interest for the pursuer whether by declaration or injunction, then the action was incompetent— Aitken. To allow this action would be to enforce the pursuer's view of the agreement, to give him the advantage of membership, to allow him to assume partners, and to enforce the conditions of the agreement in a certain way. Membership meant a change from free to tied trading, and the Court could not determine the conditions under which business was to be carried on without trespassing on the forbidden area. The case of the Yorkshire Miners' Association v. Howden, [1905] AC 256, relied on by the respondent, was distinguishable, the object of that action being not to apply but to prevent misapplication of the funds of the union. The case of Osborne v. Amalgamated Society of Railway Servants, [1911] 1 Ch 540, was also distinguishable, as that action was not instituted with the object of directly enforcing an agreement to pay benefits to members. It was merely declaratory of membership. The case of Kelly v. National Society of Operative Printers' Assistants, (1915) 31 T.L.R. 632 (also reported in 84 L. J., K.B. 2236), did not help the respondent, for it went no further than the case of Osborne. (3) On the Merits.—The pursuer having ceased to carry on business as a master plumber was no longer a member of the Association. The Association was limited to master plumbers or firms of master plumbers, and the pursuer was neither. He had ceased to be a master plumber when he sold his business to the new firm. Esto that the firm might be an eligible unit for membership, the firm had not been admitted to membership. So neither the pursuer nor his firm was now a member of the Association.

Argued for respondent—(1) The Association was not illegal at common law. Whether an association was legal or illegal depended not on special bye-laws but on the main objects of the Association. The question was one of degree, and not every rule in restraint of trade made an association illegal. The restraint must be unreasonable. The standard was a very high one. The restraint must not be disproportionate to the benefits received, and must not be contrary to public policy— Swaine v. Wilson, (1889) L.R., 24 Q.B.D. 252; Gozney v. Bristol Trade and Provident Society, [1909] 1 KB 901; Russell v. Amalgamated Society of Carpenters and Joiners, [1912] AC 421, per Lord Macnaghten at p. 430. (2) The pursuer was not seeking to enforce the agreement. All he asked was a declarator of his rights under it, viz., that he was a party to the agreement as a whole. The question really turned on the interpretation of section 4 (1) of the Trade Union Act 1871. The authorities cited showed that if the action was merely declaratory of membership, then it was legal; that if it involved a discussion of alternative views of the agreement and the enforcement of either view, then it might be excluded by the Act; that each case depended on the real object of the action, viz., whether it was or was not to directly enforce the agreement; and that the onus of showing that the action involved direct enforcement lay on the party pleading the Act— Osborne; Rigby; Chamberlain's Wharf; Howden ( cit. sup.); Wilkie v. King, July 22, 1911 S.C. 1310, 48 S.L.R. 1057. Reference was also made to Wolfe v. Matthews, (1882) L.R., 21 C.D. 194, referred to judicially in Howden. The case of Aitken was distinguishable, for that case really turned on title to sue. In so far as Lord President Inglis went beyond the necessities of that case his words were obiter. Smith's case was also different, for the object of the action there was the enforcement

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of a rule of the Association which had been admittedly broken. Rae's case was also inapplicable. The pursuer here did not ask the Court to give him any pecuniary benefit. Esto that he would have a vote in the disposal of the “estimate fees,” there was no agreement as to their disposal. They might be disposed of anyhow. (3) On the Merits.—The pursuer had not contravened the agreement and was still a member of the Association. The onus of showing that he had contravened it lay on the defenders. The “cesser” clause must be read strictly. There was no provision in the rules for the case of a member assuming a partner. The pursuer was still a master plumber in the sense of the agreement. “Master plumber” meant one who was not in a subordinate position in his trade, i.e., neither as apprentice nor a journeyman. The fact that the pursuer had assumed as partners persons who were not plumbers was immaterial. “Master plumber” did not necessarily mean one who employed servants. The words “firm of master plumbers” showed that what was to be looked at was the composition of the firm, not the firm as a separate legal persona, and if the firm contained a master plumber that was enough. The sale of his business to a firm of which he was to be a partner did not disentitle the pursuer from carrying on business as a master plumber, and there was no averment that it did. Both the pursuer and his firm could be members at the same time, although a formal application for membership might have to be made by the firm, and though the firm and its members might have to be content with one vote.

At advising—