M. S. and L. Railway Company v. Denaby Main Colliery Company

In the Queen’s Bench Division of the High Court of Justice, London, on Tuesday, the case of the Manchester, Sheffield, and Lincolnshire Railway Company v. the Denaby Main Colliery Company was resumed before Mr. Justice Mathew and Mr. Justice Day, sitting as a Divisional Court. This was an action brought by the plaintiffs against the defendants to recover £2972 5s. 11d. for the carriage of coals. The defendants denied that they owed the money, and counter-claimed for £30,000, which they alleged they had been overcharged by the plaintiffs.

The special case stated that the defendants were colliery owners, carrying on business at the Denaby Main Colliery, near Doncaster, and that a large portion of their coal left their colliery by the plaintiffs’ line, the colliery having no direct communication with any other line. The defendants sold coals at, amongst other places, Hull, Goole, and Great Grimsby, and their customers included Mr. Bannister, coal merchant, in an extensive way of business at Grimsby, and Messrs. Josse and Company, coal merchants, also in a large way of business at Hull, Grimsby, and Goole. Messrs. Bannister and Josse and Co., also dealt with a number of other owners of collieries in the South Yorkshire coalfield.

From February, 1874, to December, 1876, the plaintiffs, whose railway was the only direct line leading from the South Yorkshire coalfield to Grimsby, made to Mr. Bannister an allowance or rebate of 8d. per ton from the public rate of charge in respect of all coal shipped by the Hamburg American steamers which called at Grimsby, the plaintiffs having ascertained that if the steamers could get South Yorkshire coal at a reduction of 10d. or 1s. on the then current prices they would purchase coal at Grimsby instead of elsewhere.

The coal sent to Grimsby from the various South Yorkshire collieries was partly for shipment and partly for land sale, and that which was for land sale was charged at a different rate to that which was for shipment. Many years ago the plaintiffs agreed with Mr. Bannister to charge him in respect of coal for land sale the same rates as in respect of coal for shipment; and from July, 1876, to July, 1878, the plaintiffs made Messrs. Josse and Company an allowance of 4d. per ton in respect of their land sale coal. During the whole period covered by the action the plaintiffs had allowed to Mr. Bannister and Messrs. Josse and Co. a rebate of 2 per cent. upon their respective net debits in respect of coal traffic of every description carried for them. This allowance had not been made to any other firm. Both Mr. Bannister and Messrs. Josse and Company owned a large number of waggons, and dealt with many collieries.

Between July, 1874, and March, 1880, plaintiffs allowed to Mr. Bannister 6d. per ton on all coal shipped by him from Harwich, and the average amount of coal subject to this arrangement was 15,000 tons per annum. The allowances made by the plaintiffs to Mr. Bannister and Messrs. Josse and Company, in respect of the carriage of coal for land sale, were unknown to the defendants until they were ascertained from discoveries in the action. Each of the various allowances made by the plaintiffs to Mr. Bannister and Messrs. Josse and Co. was sufficient in amount to place a substantial disadvantage in the way of the defendants in competing with the firms to whom the allowances were made.

The special case also stated that during the period covered by the action the plaintiffs had one uniform set of rates for the carriage of coal from about 48 different collieries, which were placed in a group. The defendants’ colliery was the easternmost of the group, and was 15 miles nearer the coast than the furthest colliery. When the case came before the Railway Commissioners they gave judgment in favour of the defendants, and prohibited the plaintiffs from charging the group rates between the various collieries comprising the group and the others lying to the eastward, to which the group rates applied.

The defendants contended that the group rates were a violation of Section 90 of the Railway Clauses Consolidation Act, 1845, and the Railway Canal Traffic Act, 1854, and that they were entitled under either of these Acts to recover the difference between the amount actually paid by them for the carriage of coals, and the amount which would have been payable if proper differential charges had been made for the carriage of coal from the different collieries of the group, and not only such difference, but damages for breaches of the statutory duty.

The plaintiffs, however, argued that they had committed no breach of the Acts referred to, that an action by the defendants for a breach of the Railway Canal Traffic Act, 1854, would not lie, and that therefore they were entitled to succeed.

The questions for the decision of the Court were whether the group rates constituted a breach of the Railway Clauses Consolidation Act, 1845, and whether an action would lie for a breach of the Railway Canal Traffic Act. If their lordships answered in the affirmative, then they had to consider the question whether the damages of the defendants for the breach of the Act were limited to the amount of the overcharges, or whether they were entitled to additional damages.

Mr. Webster, Q.C., and Mr. C. Russell appeared for the plaintiffs, while Mr. Forbes, Q.C., and Mr. Lofthouse represented the defendants. Mr. Forbes concluded his argument for the defendants, and their lordships reserved judgment.