Scottish Court of Session Decisions

This was an action at the instance of John Paterson & Son, Limited, contractors, Glasgow, against the Corporation of the City of Glasgow (Police Department), for the reduction of a decree—arbitral by William Robertson Copland, C.E., Glasgow, dated 25th February 1899.

By contract dated in April 1893 the pursuers undertook to construct for the defenders certain main sewers in the eastern district of the city at certain scheduled rates. The contract contained no arbitration clause. During the progress of the work the pursuers found that on account of the bad condition of the ground it was impossible to drive a tunnel for the sewer by any of the usual methods, and that it would be necessary to do so by means of air-pressure, a method which had then been only recently applied to that class of work, and which was more costly. This was represented to the defenders, who instructed the pursuers to proceed with the work by means of the air-pressure system where necessary, the question of the extra cost thereby incurred being left over to be subsequently dealt with. The pursuers did so, and in January 1895 they intimated to the defenders that the portion of the sewer requiring to be driven by air-pressure was completed. Meantime certain correspondence passed between the parties with reference to the pursuers' claims in respect to this portion of the contract, and ultimately the defenders' Sub-Committee on Statute-Labour, by minute of meeting dated 3rd August, and approved 17th August 1894, agreed to recommend “that as this payment is in respect of and applicable to the extra cost incurred by Messrs Paterson & Son in executing their contract by means of the system of air-pressure found by them to be necessary, Mr W. R. Copland be appointed arbitrator in the matter of the amount to be paid to Messrs Paterson & Son in respect of the extra cost incurred by the necessary adoption of the said system of air-pressure.” The terms of this minute were intimated to the pursuers, who on 16th August replied that they agreed to the conditions stated therein. In June 1897, on the completion of the whole contract, the pursuers rendered their account to the defenders. This account showed separately the amount claimed by them for the work executed by the air-pressure system, which amounted to £5710, 14s. 11d., and that claimed in respect of the remainder of the contract, which amounted to £6044, 11s. 4d. The total sum claimed, before deducting £6150 paid to account, was £11,755, 6s. 3d. They subsequently, on 7th April 1898, lodged with the arbiter a detailed statement of the cost, time, and material expended by them in connection with the use of the air-pressure system. In their pleadings in the reference the pursuers averred (Stat. 7) “that the agreement was that they should execute the work on a time and material basis,” and the defenders in their answers admitted this averment.

While this reference was proceeding it appeared that there were some items of the account of £6044, 11s. 4d. other than those connected with the use of air-pressure, which the parties were unable to adjust. By minutes of meeting of the Statute-Labour Committee, of date 31st December 1897 and 11th February 1898, and letter from the pursuers dated 9th February 1898, it was agreed “that the remaining items of differences arising out of said contract be referred to Mr Copland.”

On 30th April 1898 the pursuers wrote to the arbiter—“A considerable time ago, on the suggestion of Mr Whyte, we agreed that the matter of the compressed air should be referred to you to adjust between us without the formalities of a legal arbitration, and with a view to an amicable settlement, so as to save legal and other expenses. We would like to know now if Mr Whyte departs from this position, because, if so, we must reconsider the whole matter and the terms of its submission.”

On 4th May Mr Whyte, the defenders' clerk of works, wrote to the arbiter—“For the reason stated in my letter of 29th April, I consider it necessary that the legal aspect of the case should be put before you.”

After sundry procedure, the pursuers' agents, on 6th August, wrote to Mr Lindsay, clerk to the Police Department—“It was, of course, originally intended that the parties should dispense with legal assistance, and they have hitherto done so, but as so much delay has already taken place, it has occurred to our clients that further delay would be obviated by having the case laid before the arbiter by the legal representatives of both parties. We would therefore suggest that the arbitration should be taken up by you and us at the present stage of the proceedings in order that the question may forthwith be settled. Our clients have no desire to enter into an elaborate arbitration, and they are quite willing that both parties should dispense with outside skilled witnesses.”

Mr Lindsay replied on 25th August—“I submitted your letter of the 6th on the above to my committee on statute-labour at their last meeting, when, after consideration of your request that the case be laid before the arbiter by the legal representatives of both parties, and that the arbiter be authorised to appoint a clerk in the usual way, they resolved to recommend that the request made be not entertained or acquiesced

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in by the Corporation, in respect that the reference to Mr Copland was an informal one, and that admittedly it was to be conducted without recourse to formal legal procedure or the services of legal representatives.”

Thereafter, on 26th November 1898, the arbiter issued a note of proposed findings, adding thereto the following note—“As the arbiter intimated to the parties' representatives when he met them, the foregoing decision has been arrived at without entering into a proof, which would almost certainly be prolonged. If desired, however, by either of the parties, he is quite prepared to hear proof and reconsider the whole question in the light of any evidence that may be led. On the other hand, if proof is to be dispensed with, he allows eight days for lodging written representations by either party against these findings, if so advised.”

On 29th November the pursuers intimated to the arbiter that they were dissatisfied with his proposed findings, and requested him to fix a diet of proof.

On 17th January 1899 the arbiter pronounced an order appointing proof to be led on 27th January. He appended the following “ Note.—While the arbiter has not thought it right to restrict the proof in any way, he hopes the parties will keep the evidence within reasonable limits, and that neither of them will seek to tender evidence which is not strictly pertinent to the question at issue, viz., What is the reasonable extra cost of constructing the sewers included in the contract between the parties by means of pneumatic pressure, so far as required. Both parties having distinctly agreed that they were not to be represented by law-agents, the arbiter cannot now see his way to allow this arrangement to be broken unless mutually agreed upon.”

On 23rd January the pursuers wrote to the arbiter—“From the terms of the present order, and the note appended thereto, we observe that you only allow proof to be conducted by the parties themselves, without representation by their law-agents. We, however, cannot accept a proof on such a condition, and unless this condition is withdrawn we shall consider this restricted order as equivalent to a refusal to hear the proof which we would tender through our law-agents. We must respectfully take exception to the last clause in your note, because we never came under any agreement not to be represented by our law-agents. … We do not profess to be able, and cannot undertake the legal work of examining and cross-examining witnesses, as this is altogether beyond our province. Without agents we cannot do more than we have already done. We also observe from your note that you state the question to which the proof should be directed is ‘what is the reasonable extra cost,’ &c. We respectfully point out that in our opinion this statement does not contain the question which was remitted to you. The question referred to you is distinctly stated in the minutes of the Statute-Labour Committee, and we maintain that under the reference it falls to you to fix the amount of the extra cost incurred by us in the adoption of the system of air-pressure found to be necessary in executing the contract.”

Thereafter the arbiter cancelled the diet for proof, and on 7th February he issued the following note of proposed findings—“The claimants having declined to avail themselves of the opportunities afforded of leading proof in support of their claim, the arbiter proposes to find as follows:—

1. The total amount due in respect of the work done by the claimants in connection with this contract, including depreciation of air-compressor plant, and an allowance for the use of Greathead's patent, is	£8180	14	9
2. The amount paid to account is	6150	0	0
3. That the balance due and now payable is	£2030	14	9

The arbiter further allows parties eight days to lodge written representations against these findings, if so advised.

Wm. Robertson Copland.”

On 9th February the pursuers wrote to the arbiter—“We have already explained to you fully our reasons for declining to attend the proof proposed by you, and we cannot accept these proposed findings as binding on us. We respectfully maintain that the proof was allowed on conditions which we were not bound to accept, and that these proposed findings are therefore invalid. We cannot recognise them in any way, and we reserve our whole rights in the matter.”

On 25th February the arbiter issued a formal decree-arbitral giving effect to the findings above recited. Thereafter the pursuers raised the present action. They maintained that the decree-arbitral should be reduced on the following grounds:—(1) That the arbiter had refused to hear evidence as to the actual cost incurred by them in driving the tunnel by means of air-pressure, and as to other matters regarding which the parties were at variance. They averred that the sum awarded by the arbiter was several thousand pounds less than their actual outlays; (2) that the arbiter had proceeded ultra fines compromissi, in respect that, instead of determining the amount of the actual extra cost incurred by the use of air-pressure, he had professed to find what was a reasonable sum to be allowed for carrying out that system, which was not the question submitted to him under the reference; (3) that the decree-arbitral professed to determine the amount due for executing the whole contract without distinguishing between the sum awarded in respect of the use of air-pressure and that awarded in respect of the original contract, and that it dealt with items in the original contract amounting to £4003, 5s. 2d., which had been already adjusted between the parties, and were not within the limits of the reference; (4) that the arbiter had acted illegally in refusing to the pursuers a proof except on condition that they should not be represented by their law-agents.

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The pursuers pleaded—“(1) The arbiter, in refusing a proof to the pursuers, except upon the condition that they should not be represented by their law-agents, having acted illegally, irregularly, and contrary to the essential principles of justice, the pursuers are entitled to have the said pretended award reduced. (2) The said pretended award or decree-arbitral mentioned in the summons being ultra fines compromissi and ultra vires of the arbiter, is funditus null and void, and the pursuers are entitled to decree of reduction as concluded for. (3) The pursuers are entitled to reduction of the said pretended decree-arbitral for the reason that it does not determine the questions submitted to the arbiter.”

The defenders pleaded—“(1) The pursuers' averments are neither relevant nor sufficient to support the conclusions of the summons. (2) The pursuers' averments, so far as material, being unfounded in fact and untenable in law, the defenders are entitled to decree of absolvitor with expenses. (3) The pursuers are barred personali exceptions from insisting in the present action.”

The Lord Ordinary ( Kyllachy) allowed a proof.

On behalf of the pursuers, John Paterson, a director of the pursuers' company, deponed—… “There was no agreement that I know of to the effect that no legal assistance was to be obtained by either party during the reference. The question cropped up through Mr Whyte always saying to me, ‘We will manage to settle these accounts ourselves, and we will have none of the lawyers.’ I was quite agreeable if we could do without lawyers, and that was the whole agreement about it. I did not consider we were bound not to employ lawyers, though I acquiesced in Mr Whyte's idea that we might settle the matter ourselves. … (Q) Did you tell Mr Whyte in Mr Peterkin's presence that the reference was an informal one, and that no skilled witnesses were to be present?—(A) It came from Mr Whyte first. No doubt I would acquiesce. I do not know whether I used the expression, ‘It would be a pity to incur the expense of a full-dress debate,’ but quite possibly I did. (Q) At that time your arrangement was that there were to be neither skilled witnesses nor lawyers, but that Mr Copland, as a practical man, was to state the whole points?—(A) I remember the lawyer question. I do not remember whether skilled witnesses were excluded or not.” …

On behalf of the defenders, William Peterkin, C.E., in the employment of the defenders, deponed—… “(Q) Do you remember in January 1895 having a conversation with Mr John Paterson about a reference on the subject?—(A) My recollection is that I had one conversation with Mr Paterson at which he made both suggestions in presence of Mr Whyte. That was early in the negotiations, but I cannot condescend upon the date. I was called into Mr Whyte's room, and found Mr Whyte and Mr Paterson there. Mr Paterson was the spokesman. It was mentioned to me that the suggestion had been made by Mr Paterson that to save expense and time nobody should appear in the reference except Mr M'Connell on behalf of the pursuers, and myself on behalf of the Corporation, with our respective foreman and inspector. Mr Paterson said it would be a pity to go to the expense of a full-dress debate. His suggestion was acquiesced in by Mr Whyte. (Q) Was anything said about skilled witnesses?—(A) Skilled witnesses were one of the parties he described as being parties to a full-dress debate. (Q) Who was the other party?—(A) Lawyers. By the Court—skilled witnesses were specifically mentioned as being to be dispensed with. Examination continued—When he used the expression that parties were not to be at the expense of a full-dress debate, he mentioned there and then what he meant by that term, viz., that skilled witnesses and lawyers were not to be brought into the matter.” …

James Martin, Convener of the defenders' Sub-Committee on Contracts, deponed in reference to a meeting of the Sub—Committee with Mr Donald Paterson on 3rd August 1894—… “Mr Paterson was quite agreeable to accept Mr Copland, and we were to have no formal arbitration business; it was to be left entirely in Mr Copland's hands to see what amount of money they would get for the air-pressure. It was mentioned that our engineer was to appear for us, and the pursuers' engineer for them. (Q) Was anything said as to no lawyer or skilled people being there?—(A) That was part of the bargain. We did not want any lawyer. That was stated. All that was agreed to by Mr Donald Paterson, but it was not reduced to writing. This took place at a meeting of the Sub-Committee, which I reported to the Statute-Labour Committee half-an-hour afterwards.”

William R. Copland, the arbiter, examined on behalf of the defenders, deponed—… “I understood that there was an agreement between the pursuers and the Corporation about an informal reference. (Q) You do not suggest that any agreement was made before you?—(A) No; I had no agreement with them, but they constantly talked of it as an arrangement between themselves. Nothing was said about skilled witnesses at that time. There was never a suggestion of witnesses at any time up till the time the idea was communicated to me that it would be necessary to conduct the case by law-agents. (Q) Was anything said to the effect that at no stage of the reference they should consult lawyers and take legal assistance?—(A) No; I am not aware of that. The principle on which we began was, that no lawyers were to be employed before me, and I would not shift from that unless the parties instructed me to the contrary. (Q) Was there an understanding that legal assistance was not to be got in connection with the reference at all?—(A) Unless by the subsequent agreement of the parties.” … Mr Copland further deponed—“I did not make an inspection with a view of satisfying myself

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as arbiter of the nature and difficulties of the work, but it was not necessary for me to do so in order to be arbiter. (Q) And you have never inspected any part of the work with a view of considering whether it was done in an efficient and proper manner?—(A) That was not disputed, and therefore I did not do so. It was admitted by the Corporation that the work was done efficiently. There was no challenge in point of quality; it was a matter of cost. The necessity of the expenditure depends on the nature of the ground, but not so much in air-pressure. (Q) And you say you never made any inspection of the ground when the work was in progress in order to determine what the difficulties would be?—(A) No; I should have done so if there had been any question as to the quality of the work. At first I knew that the only question I was to determine was the amount to be allowed for the air-pressure work. … It was my understanding, not at first, but afterwards, that the general account had been remitted to me, and I dealt with it upon that footing. Except for the fact that the contractors lodged a time and material statement, the question as to the arrangement being on a time and material basis did not come before me. I refer to the seventh head of the statement for the contractors and the remarks for the Corporation, but it never was brought before me except in that document. So far as I could discover the parties were not at one concerning the question that the contractors were to be paid on a time and material basis. If the account was to be paid on a time and material basis the Corporation would have put men on to keep notes of the time and material employed, but there was no such information. (Q) Then you went upon the footing that the account was not to be paid for on that footing?—(A) I went on the footing of the minute of the Corporation, a copy of which was supplied to me. I suppose the Corporation had an inspector on the job the whole time. I cannot tell what the object of the contractor was in lodging his statement of time and material. I did not inquire into the correctness of that statement. That was not my view of what was remitted to me; it was the amount of money that ought to be paid to the contractor for the extra work he had done in putting air-pressure into this job, and irrespective of what he had expended; if he had spent the National Debt it would not have affected me. (Q) And quite irrespective of whether he had expended it properly or not?—(A) No; the price of putting air into a sewer is common knowledge amongst us—so much per lineal yard of work done—and to go into a long account of time and material to settle that seemed to be an irrelevancy, and was not in accordance with the remit made to me. There were very few points of fact that were at issue between the parties. There were one or two measurements which I made myself, but beyond that it was an issue mostly as to what would be considered a fair price. In my view I had ample materials to decide the question when I issued my award, and no evidence was necessary, but as one of the parties thought it was, I was very unwilling to exclude anything that would give him an opportunity of challenging the view I had stated.… No representation, protest, or request was ever made to me to indicate any details of my award. Neither the pursuers nor anybody for them ever made any protest or request that I should distinguish the amounts awarded for the air-pressure section of the contract from the more general portions.”

By interlocutor dated 16th February 1900 the Lord Ordinary assoilzied the defenders from the conclusions of the action.

Opinion.—“In this case, having heard and considered the evidence—evidence which in some directions went perhaps beyond what was strictly competent—I have come to the conclusion that the pursuers have failed to make good their grounds of reduction.

As to the scope and terms of the reference, I think they are quite distinctly expressed in (1) the minute of the defenders' Sub-Committee of 3rd August 1894, communicated to and accepted by the pursuers' letter of 16th August 1894; and (2) the minutes of the Sub-Committee of 31st December 1897 and 11th February 1898, and letter from the pursuers of 9th February 1898 therein referred to. The agreement, as appears from these documents, I think simply was (1) that the pursuers should have such an allowance in respect of the use of air-pressure in constructing the sewer as Mr Copland should think proper; (2) that Mr Copland should also adjust as between the parties the amount due on the pursuers' general account, giving, of course, in doing so, effect to any partial adjustments made, or which might be made, by the parties themselves. That, I think, was the substance of the agreement of reference, and I can find no evidence that its scope and terms were afterwards enlarged or restricted.

In the next place, as to the procedure, I think it obvious that the reference was intended to be, and was, an informal reference to be worked out by Mr Copland as a man of skill, with all the freedom of action which belongs to the office of arbiter in such circumstances. There was no minute of reference—no appointment of clerk—no minutes of procedure; nor in the proceedings before the arbiter was there any attempt to observe the formalities which are usual under a formal submission.

Further, and in particular, I hold it proved that it was from the first the understanding of parties that neither counsel nor law-agents should be employed. That, as appears from their letters, was the proposition of the pursuers themselves, accepted—if not also urged—by the defenders' committee. I do not say that it was made a term of the reference so that either party might not at the outset have resiled from it; but it was an arrangement relative to the mode of procedure which those in charge of the reference were quite entitled to make, and, I think, did make; and it

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was certainly an arrangement acted on throughout the proceedings, and up to the issue by the arbiter of the notes of his proposed award. It is not, I think, of much consequence whether the Corporation, as distinguished from its committees, was from the outset bound by the arrangement. It was an arrangement on which both parties acted, and that, I think, is enough.

Taking these views of the nature and history of the reference, I may, I think, dispose of the pursuers' objections with comparative brevity.

Their first point is that Mr Copland went ultra fines compromissi in fixing the allowance for the use of compressed air otherwise than (1) by ascertaining the pursuers' actual outlay; (2) deducting any particular outlay which he thought unnecessary; and then (3) adding an allowance for profit. It is said that it was a condition of the reference that the arbiter should proceed on those lines; that the figures of his award show that he did not so proceed, and therefore that his award is invalid.

Now, it does not appear, and I doubt whether we are entitled to know, by what precise process Mr Copland reaches the figures in his award. But, assuming what is, I think, highly probable, that he did not proceed by the method suggested, it appears to me that there was nothing in the terms of the reference that required him to do so. I have already, I think, stated where, in my opinion, the terms of the reference are to be found; and I need only add that it seems to me to be vain to attempt to vary or add to those terms by reference to loose expressions in the defenders' pleadings. In point of fact, the manner in which the pursuers framed their final account makes it, to my mind, plain that the issue, as they themselves raised it, was not what was their outlay or extra outlay in connection with the use of compressed air, but what was the additional price per yard which should be allowed them in respect of the employment of that method.

The next complaint was, I think, this—that the arbiter has not separated in his award the amount allowed by him upon the general account and the amount allowed by him for the use of compressed air; and that similarly he has not stated separately the amount allowed under the general account (1) in respect of admitted items; and (2) in respect of disputed items.

It is here enough to say that I cannot discover any sufficient reason why the arbiter should not, if he thought proper, make his award in the lump. It is not said, and is certainly not proved, that he failed to consider both heads of the pursuers' claim; nor is it alleged or proved that he disallowed items admitted, or failed otherwise to give full effect to the parties' adjustments. Moreover, here also the way in which the pursuers' case was presented seems to justify, if justification were needed, the arbiter's action. The final account, and the comparative statement—which was throughout used, it appears, by both sides—present the pursuers' claim as a claim for a total sum of £11,755—a claim made up under different heads, but still a claim for a total sum. What the arbiter has in fact done is to allow £8140 instead of £11,755 so claimed. In doing so I do not think he has done anything wrong. Besides, the pursuers had an opportunity when the arbiter's notes were issued to ask for a breaking-up of the sum awarded under different heads. But I do not find that they made any request of that sort.

Lastly—and this seemed the main complaint—the pursuers say that the arbiter, having necessarily or unnecessarily allowed a proof, was not justified in making it a condition that lawyers should not be employed. Upon this point I heard a good deal of argument, but in the end the question seemed to be brought to a comparatively narrow issue.

It was not, I think, ultimately disputed that the arbiter had the power—if in his judgment he thought it right—to decline the assistance of counsel or agents. The decisions referred to in Mr Bell's book on Arbitration, p. 164, seemed too plainly in point to be got over. Neither was it, I think, left doubtful that Mr Copland himself did not consider the introduction of lawyers either necessary or desirable. He seems to have considered—and I must say I entirely agree with him—that the subject matter at issue was such, even when it came to leading evidence, that the work was likely to be much better done by the parties' engineers, who had throughout represented them, than by law-agents or counsel, who would probably have no technical knowledge and require to be instructed on every point.

The pursuers, however, say that, whatever might have been said, if Mr Copland had proceeded on this ground, or had assigned no ground at all, his action must be judged by reference to the reason which he chose to assign, viz., that the parties had agreed to dispense with lawyers.

Now, I am by no means prepared to affirm that, even if the agreement referred to was only an honourable understanding, Mr Copland was debarred from considering it in determining a point of procedure, as to which he had a discretion and was the judge. But in the view I take, and have already expressed, the agreement that lawyers should not be employed in the reference was something more than an honourable understanding. In my opinion it was a binding agreement, made binding by the actings of parties, if not otherwise; and being so, it would, I think, have been quite wrong if the arbiter had at the stage in question allowed one of the parties to resile from it.

On the whole matter, therefore, I see no ground for interfering with the award, and shall therefore assoilzie the defenders from the conclusions of the summons, with expenses.”

The pursuers reclaimed, and argued—(1) An arbiter was bound to hear parties, and failure to do so was a good ground of reduction. The condition imposed by the arbiter

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here, that the parties should not be represented by their legal advisers, amounted to a refusal to hear the proof which he had allowed— Mitchell v. Cable, June 17, 1848, 10 D. 1297; Holmes Oil Co. v. Pumpherston Oil Co., July 17, 1891, 18 R. (H.L.) 52, per Lord Watson. The arbiter was mistaken in holding that there was any agreement that the parties should not have legal assistance; the correspondence and communings on that matter were prior to, and were not made part of the submission. Such an error was fatal to the decree-arbitral— Sharpe v. Bickerdyke, Feb. 20, 1815, 3 Dow 102. In any view, the pursuers were entitled to resile from such an agreement if they found it necessary at any stage of the proceedings to employ legal assistance. (2) The arbiter had misapprehended the question submitted to him, and had gone ultra fines compromissi in deciding a question which was not within the terms of the reference. Such an error was fatal to the decree-arbitral— Napier v. Wood, Nov. 29, 1844, 7 D. 166; Adams v. Great North of Scotland Railway Co., Nov. 27, 1890, 18 R. (H.L.) 1. The decree-arbitral professed to find “the total amount due in respect of the work done by the claimants in connection with this contract,” whereas the only question submitted to him was to determine “the amount to be paid in respect of the extra cost” incurred by the use of air-pressure. That could not be ascertained without an inquiry into the amount of time and material expended by the pursuers, and it was admitted by the defenders in the arbitration proceedings that this was the basis of the contract. The arbiter had neither examined the work while in progress nor heard evidence, but had estimated the work at so much per lineal yard without reference to the actual cost to the pursuers. Further, the arbiter's own evidence was conclusive that he had misapprehended the question submitted to him. Such evidence was competent— Duke of Buccleuch v. Metropolitan Board of Works, 1871, 5 E. & I. App. at p. 462; Dare Valley Railway Co., 1868, 6 Eq. 429. Again, by finding a lump sum due in respect of the whole contract, the arbiter had not distinguished between the unadjusted items of the general account, which alone were submitted to him, and those which the parties had already adjusted. As matter of fact these adjusted items, which were not within the reference, exceeded the total amount of the award. The two heads of claim, viz., in respect of air-pressure, and in respect of unadjusted items, were entirely separate, and it was the arbiter's duty to deal with them separately— Rider and Fisher, 1837, 3 Bingham's New Cases, 874; Mortin v. Burge, 1836, 4 Ad. & El. 973.

Argued for the defenders—(1) The questions in dispute were referred to the arbiter as a man of skill, and as such he was entitled to refuse to hear evidence if he thought it unnecessary— Miller v. Millar, March 10, 1855, 17 D. 689, at p. 724. It was also in the discretion of the arbiter to allow or disallow the employment of lawyers—Bell on Arbitration, 164; Spearman v. Steele, Feb. 28, 1828, 6 S. 645. But in the present case the evidence showed that the parties had agreed to dispense with skilled evidence and legal assistance. (2) The arbiter was right in his construction of the reference. The question was, what was a reasonable sum to be paid to the pursuers in respect of the use of air-pressure, and the arbiter as a man of skill was able to determine that question without proof. His evidence showed that it was never suggested to him that the pursuers were to be paid on a time and material basis. The parties had interpreted the reference by their conduct, and it was clear that they desired only one award. The arbiter's evidence showed that he was never asked to distinguish between the different heads of claim. In an informal reference the arbiter's evidence was competent— Kid v. Walker, Nov. 28, 1828, 7 S. 82. From the pursuers' own account, which contained all the items, adjusted and unadjusted, and the payments to account entered in a lump sum, it was plain that what they desired was a general award covering the whole matters in dispute.

At advising—