Scottish Court of Session Decisions

This was an appeal from an order of the Railway and Canal Commissioners sitting in place of the standing arbitrator under the Caledonian and Scottish Central Railways Amalgamation Act 1865 and the Caledonian and Scottish North Eastern Railways Amalgamation Act 1866, at the instance of the Caledonian Railway Company, defenders and appellants, against the North British Railway Company, applicants and respondents.

The Caledonian and Scottish Central Railways Amalgamation Act 1865 and the Caledonian and Scottish North Eastern Railways Amalgamation Act 1866, amalgamated respectively the Scottish Central Railway and the Scottish North Eastern Railway with the Caledonian Railway.

The Act of 1865, sec. 73, defined Scottish East Coast traffic as meaning “traffic of every description passing or destined or directed to pass to, from, over, or beyond the railways which previously to the commencement of this Act formed the undertaking of the Scottish Central Railway Company (and which are hereinafter called the Scottish Central Lines) or any part thereof, from, to, over. or beyond the railways forming the undertaking of the North British Railway Company and the Edinburgh and Glasgow Railway Company respectively or any part thereof, which companies are hereinafter called the Scottish East Coast Companies.”

Section 74 provided for there being given to the Scottish East Coast Companies in respect of Scottish East Coast traffic “all such facilities as are usual or useful for the convenient working or development of railway traffic including” … and section 75 enacted that … “all traffic specially consigned by the public as to be conveyed by the Scottish East Coast Companies route shall be sent by such route.” …

The Act of 1866, sec. 106, conferred on the North British Railway Company, for the purpose of conveying Scottish East Coast traffic as defined by sec. 99 (quoted in the Lord President's opinion), running powers over the Scottish North Eastern lines. Section 108 provided—“Nothing in this Act contained shall authorize the North British Railway Company to carry or interfere with any traffic arising and terminating on the railways of the Company ( i.e., the Caledonian Railway Company after the amalgamation), with the exception that in the exercise by the North British Railway Company of the running powers hereinbefore contained it shall be lawful for them to carry by two through passenger trains each way daily between Aberdeen and the North British Railway local passenger and coaching traffic between the following stations, viz.:—Aberdeen, Stonehaven, Bridge of Dun, Forfar, Couper-Angus, Perth, Arbroath, Broughty, and Dundee.”

Coal traffic from Bannockburn Colliery on the Scottish Central line, four miles south of Stirling, to Aberdeen on the Scottish North Eastern line, was specially routed and consigned by the senders via Stirling and the North British route by the Tay Bridge. The Caledonian Company disregarded the senders' routing, and persisted in sending the traffic by its own route via Perth, maintaining that it was under no obligation to forward the traffic by the North British Company's route. The North British Company maintained the contrary, and applied to the Court of the Railway and Canal Commissioners for an order determining this difference.

On 13th December 1902 that Court issued the following order:—“… Now therefore, having heard counsel for each of the said Railway Companies, this Court doth declare that the North British Railway Company are entitled to have coal traffic from Bannockburn Colliery to Aberdeen, which has been specially consigned by the public as to be carried via Stirling and the Tay Bridge, handed over to them at Stirling by the Caledonian Railway Company for conveyance by that route.”

Lord Stormonth-Darling—[ After reciting the provisions of the statutes]—“Founding upon these provisions, the applicants say that the traffic from Bannockburn to Aberdeen falls under the description of “Scottish East Coast Traffic,” as defined in section 73. Clearly I think it does. It is traffic directed to pass from a place on the “Scottish Central Lines” to a place beyond the railways of one of the “Scottish East Coast Companies.” Indeed the respondents do not dispute that as matters stood in 1865 it fell within the definition. The system of the North British Company did not then extend further north than Dundee, just as the system of the Caledonian Company did not then extend further north than Perth, but if any consignor had desired that his coal should go to Aberdeen by Dundee instead of by Perth, the respondents admit that his special consignation must have been obeyed. They say, however, that the situation has been entirely changed by subsequent events, especially by the construction of the Tay Bridge, and that the reason for safeguarding the interests of the North British Company has entirely disappeared now that they are in possession of a main through route of their own. They point to the language of section 84 of the Act of 1865, which provides for the

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appointment of a standing arbitrator to settle all disputes about the running powers and facilities granted by the Act, as recognising that regard may be had to the ‘spirit and intention’ of these provisions. I agree that the situation has been greatly altered by the construction of new lines and by changes in the ownership of old lines since 1865. But I do not find in the Act anything to indicate that the railways there mentioned are limited to the lines existing at its date. On the contrary, it speaks of them in the most general terms as the railways of the various companies; and section 84 imposes on the standing arbitrator (whose functions we are here called upon to discharge) the duty of construing its provisions in the ordinary way, that is to say, by attaching a natural meaning to the language which it employs. It is only when the section goes on to deal with the mode of complying with the provisions of the Act that it brings in a reference to their ‘spirit and intention.’ Accordingly I do not think there can be much doubt that the applicants are right in their construction of the Act of 1865.

“But then the respondents say—and this is really their main argument—that even if they are wrong about the Act of 1865, the Caledonian and Scottish North-Eastern Railways Amalgamation Act, which became law on 1st August 1866, completely altered the rights of parties with respect to the traffic in question. The leading purpose of that Act was to transfer to the respondents the line from Perth to Aberdeen, with its accessories, while giving to the applicants running powers over it for the purpose of conveying ‘Scottish East Coast traffic,’ and there was inserted in section 99 for the purposes of the Act a new definition of ‘Scottish East Coast traffic.’ Aberdeen thus became by virtue of the Act a station belonging to the respondents; and by section 108 it was provided that nothing contained in the Act should authorise the North British Company to carry or interfere with any traffic arising and terminating on the railways of the Caledonian Company, with certain exceptions which do not affect the present question. The respondents maintain that by these provisions traffic from Bannockburn to Aberdeen was converted from being ‘Scottish East Coast traffic’ to being ‘local traffic’ in the sense of the rubric of section 108, and as such was not to be interfered with by the applicants, even although it might have been interfered with before.

Now this, I think, would be rather a strange result of a subsequent Act intended mainly to enlarge the undertaking of the respondents, because one would not expect to find in such an Act anything which would diminish the previously existing rights of a rival company. But really the matter is placed beyond doubt by the opening words of section 108, taken in connection with section 135. The latter section provides that nothing contained in the Act of 1866 should prejudice or affect any rights, powers, or privileges conferred by the Act of 1865 upon, amongst others, the North British Company. Accordingly, if coal directed to pass from Bannockburn to Aberdeen by the North British Railway was ‘Scottish East Coast traffic’ from 1st August 1865 to 1st August 1866, it is, for the purposes of the Act of 1865 ‘Scottish East Coast traffic’ still; and if the applicants had a right to demand that coal so consigned should be handed over to them for transmission by their then existing lines, they have the same right with reference to their lines as existing now. Even without the aid to be derived from section 135, I should be prepared to hold that section 108 takes away no right which they had under the Act of 1865. Section 108 does not say that under no circumstances shall they carry or interfere with traffic arising and terminating on the railways of the respondents, but only that nothing contained in the Act of 1866 shall authorise them to do so. Now, they derive their authority to carry this particular traffic not from the Act of 1866 but from the Act of 1865.

The most that can be said of section 108 in favour of the respondents is that, possibly, it may disable the applicants from using, for the purposes of this traffic, any of the powers conferred upon them by the Act of 1866, including the power of carrying it by trains of their own over the portion of the old Scottish North-Eastern system from Kinnaber Junction to Aberdeen. It was suggested at the debate that in that case there might be practical difficulties in disposing of this traffic at Kinnaber Junction. But with these we are not called upon under this application to deal—the materials for dealing with it are not before us. Possibly the difficulties, if they exist, may be overcome by agreement. If not, the applicants may be entitled to have the question of facilities determined by arbitration.

I propose, therefore, that we should find, dealing with the only question which is properly before us, that the applicants are entitled to have coal traffic from Bannockburn Colliery to Aberdeen, which has been specially consigned via Stirling and the Tay Bridge, handed over to them at Stirling by the respondents for conveyance by that route.”

Sir Frederick Peel—The matter in difference in this case has reference to consignments of coal sent by the general public from Bannockburn on the Caledoniau Company's Scottish Central Railway to Aberdeen, on the same Company's North-Eastern Railway, and which the senders order to be conveyed via Stirling and the North British route by Tay Bridge. Traffic going by that route would come upon the North British system at Stirling, but the Caledonian decline to transfer it, and carry it instead via Perth and their own route to Aberdeen. The contention of the North British, who are the applicants, is that the traffic in question is Scottish East

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Coast traffic as defined by the Caledonian and Scottish Central Railways Amalgamation Act 1865, and that when Scottish East Coast traffic is, as in this case, specially consigned by the public as to be conveyed by their route, the Act of 1865 gives them the right to have it so sent. I am in favour of their view on both these points. As to the first, section 73 of the Act of 1865 defines ‘Scottish East Coast traffic’ to mean traffic of every description passing or directed to pass to, from, over, or beyond the Scottish Central lines or any part thereof, from, to, over, or beyond the railways forming the undertakings of the North British Railway and of the Edinburgh and Glasgow Railway Company respectively, or any part thereof, and on the plain literal interpretation of these words, an interpretation which is, I think, good also from the point of view of the purpose and intent of the Act, the traffic we are concerned with comes within them. As to the other point, the Caledonian Company, who are the respondents, contend that the route in this case is regulated by the Caledonian and Scottish North-Eastern Railways Amalgamation Act 1866, and that the Act of 1865 does not under the circumstances apply. The matter stands thus—in 1865 the Scottish North-Eastern Railway belonged to an independent company, and the North British Company had no special facilities over or upon it. The special facilities given by the Act of 1865 to the North British Company for the accommodation of traffic sent from the Scottish Central Railway via the North British Railway to any place on or beyond it, as for instance Aberdeen, did not extend to the Scottish North-Eastern, which was at that time neither Caledonian nor North British. But as to the railways to which they did apply in 1865, they still apply to them, the act of 1866 making no difference in that respect, for the reason that section 135 of the Act of 1866 provides that nothing contained in that Act shall prejudice or affect any rights, powers, or privileges conferred by the Act of 1865 upon the North British Company, and as among the privileges or facilities so conferred there is this in section 75—“All traffic specially consigned by the public as to be conveyed by the Scottish East Coast Companies' (now the North British Company's) route shall be sent by such route”—the applicants are, I think, justified in claiming that the traffic from Bannockburn shall be sent by their route. But while the Act of 1866 does not, as regards that route, affect such part of its through route as is either Scottish Central or North British, it does affect the portion which is Scottish North-Eastern. The Scottish North-Eastern ceased in 1866 to belong to an independent company. It was amalgamated with the Caledonian Railway by an Act of that year, which at the same time gave to the North British Company running powers and other facilities on the Scottish North-Eastern for Scottish East Coast traffic similar to those which the North British had under the Act of 1865 on the Scottish Central for similar traffic. These powers, however, were given with a limitation, section 108 of the Act of 1866 providing that nothing contained in that Act should authorise the North British Railway Company to carry or interfere with any traffic arising and terminating on the railways of the Caledonian Company. It is this section of the Act of 1866 on which the Caledonian Company mainly rely for the course they take, and which they regard as superseding the Act of 1865, where traffic to which that Act would otherwise apply is made by the Act of 1866 to become traffic arising and terminating on the railways of the Caledonian Company. As already said, I do not think, in view of section 135 of the same Act, that it has the effect they suppose; but assuming that the railways of the company referred to in section 108 denote not merely the Scottish North-Eastern, but the railways anywhere of the Caledonian, the North British Company could not, it would seem, carry or interfere with the traffic from Bannockburn to Aberdeen after it reaches the Scottish North-Eastern, though the Caledonian Company might still be bound to give it the facilities mentioned in sections 100 and 101. But we are not now called on to dispose of this point, as the question raised by the applicants is not as to their powers over the Scottish North-Eastern, but as to the effect of the Act of 1866 on their powers under the act of 1865.

Viscount Cobham—I concur.

The Caledonian Railway Company appealed, and argued—The question here was as to the interpretation of the two statutes of 1865 and 1866. It was not possible to restrict it to the Act of 1865, for the respondents could only get to Aberdeen by the use of their running powers acquired by the 1866 Act, and these powers must be taken subject to all their conditions. That brought in section 108 of the 1866 Act, which distinctly excluded the North British Company from interfering with this traffic which satisfied the definition as arising and terminating on the Caledonian Railway. It was to be kept in view that the rights and privileges conferred on the East Coast Companies by the Statute of 1865 were not given with a view to traffic of this nature, for those companies had no route north to Aberdeen then, but only after they had got the running powers in 1866 and had built the Tay Bridge. The facilities were conferred to maintain the competitive routes to the south, and prevent the amalgamation being used to divert traffic to the south from the East Coast route. It was the spirit and intention of the Acts which were to be given effect to, and consequently the term “East Coast Traffic” as defined should not be stretched to include traffic never in contemplation when the protection was given.

Argued for the respondents—The question here was really the interpretation of the 1865 Act. Was the traffic in question East Coast traffic? If so, the North British Company was entitled to receive it. Now, the definition was quite clear, and it certainly covered this traffic, and that really ended the question. But the Act of 1866

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did not help the appellants, for the privileges conferred by the Act of 1865 were conserved by section 135, and the safeguarding to the Caledonian Company of traffic arising and terminating on the railway applied only to traffic which never left that railway— Distington Iron Company, Limited v. London and North-Western Railway Company, 6 R. & C. Cases 108.

At advising—