United Kingdom House of Lords Decisions

Lord Chancellor.—Your Lordships are asked to decide whether a clause in a lease, dated 1884, has been superseded by the provisions of the Agricultural Holdings (Scotland) Act, 1908. The clause runs as follows:—John Stewart hereby binds and obliges himself “at the expiry of this lease to leave the sheep stock on the farm to the proprietors or incoming tenant according to the valuation of men mutually chosen, with power to name an oversman.”

Is this superseded by the words of section 11? (His Lordship read the material part of the section.) If this were an English case the authorities decided on the Common Law Procedure Act, 1854, draw a marked distinction between arbitration and valuation. It is one thing to refer a dispute to the decision of an arbitrator who has to hear parties and witnesses as in a Court of law. It is another thing to say that a third person shall value the subject of sale, as when an incoming tenant agrees to buy fixtures at a valuation. But we are not concerned with English law or English usages.

What we really have to decide is whether the word “arbitration” in section 11 of the Act covers such a reference as that in the present lease according to the Scottish legal terminology. In a point of this kind your Lordships will be disposed to pay a very especial attention to the opinion of the learned Judges in Scotland, whose experience has brought them into-such close familiarity with such questions. I own that to my mind, unconsciously influenced it may be by the English authorities, the clause does not look like arbitration. But I deliberately defer to the opinion of the First Division unless clear authority can be cited to shew that it is erroneous.

I do not find such clear authorities. There are cases in which the difference is pointed out between appraisement and a strictly arbitral proceeding. But in many passages the word “arbitration”is used to cover all kinds of reference. And when every allowance is made for the inevitable laxity with which convenient general words are applied without prejudice to closer distinctions which do not need to be regarded in the particular case, I am unable to say that upon the authorities the word “arbitration” is inapplicable to a clause of this kind.

Accordingly I move your Lordships to dismiss this appeal.

Earl of Halsbury.—I am entirely of the same opinion, and I am bound to say I think I go perhaps a little further than the Lord Chancellor, because I believe that the word “arbitration” has an ordinary meaning in the English language which prevails both in Scotland and in England. I think it means something which is submitted to the arbitrament—to the adjudication of private persons—agreed upon by the parties, as distinguished from the ordinary Courts of law; and it appears to me that the meaning and object of the statute of 1908 was to sweep away that which must have been well known to those who framed the Act, namely, that in the ordinary course of things in Scotland this particular question of taking over the stock and valuing it was a subject which the parties have agreed upon, and that in making their leases it is the ordinary and customary mode between the person who is taking the stock and the person who is to pay for the stock when he takes.

Looking at the language of these leases generally, it is agreed that there are to be persons mutually chosen. I notice that the word “skilled” is introduced more than once in some of the judgments. I think that is a little inaccurate. There is no such word in this lease, nor is there any such word in the statute. The question here is simply whether or not the clause in this lease comes within the words of the statute. Now, whatever may be said about the policy of it, or whether or not it Would have been better to allow that which people in Scotland have found to be convenient, namely, that two neighbours or friends should adjudicate upon the matter, we have nothing to do with that. Our duty is to construe the language in its ordinary and natural meaning, to give effect to what the Legislature intended. We have nothing to do with the question whether or not it was a desirable Act to pass. The question here is, what is the meaning of it? To my mind it is beyond all doubt that what the Legislature intended was to sweep away all these private arbitraments which the parties have themselves agreed upon, and to determine that there should be one uniform form of procedure. Once we have arrived at that, as being the intention of the Legislature, we have nothing more to do than to give effect to it. I am therefore entirely of the same opinion as the Lord Chancellor has expressed, and I agree in the motion which he has made.

Lord Atkinson.—I concur. It appears to me that in face of the numerous Scottish authorities which have been cited, it is impossible to hold that, according to the procedure and nomenclature adopted in judicial proceedings in Scotland, this is not an arbitration. That being so, I concur in the decision of my noble and learned friend on the woolsack.

Lord Mersey concurred.