Amalgamated Anthracite Collieries Ltd v Cory Brothers and Co Ltd

Amalgamated Anthracite Collieries Ltd v Cory Brothers and Co Ltd

INDUSTRY: EMPLOYMENT; Other Employment: HEALTH; Health and safety at work

COURT OF APPEAL

SCOTT, DU PARCQ AND MORTON LJJ

10, 11, 20 DECEMBER 1945

Workmen’s Compensation – Industrial disease – Pneumoconiosis – Suspension due to pneumoconiosis – Compensation – Contribution by previous employer

to compensation payable by last employer – Recorded agreement by last employer to pay lump sum in lieu of weekly payment payable under Scheme –

Liability of previous employer to contribute to lump sum payment – “Compensation” – Coal Mining Industry (Pneumoconiosis) Compensation Scheme, 1943,

(SR & O, 1943, No 885), paras 8, 9(2) (a).

Until January 1944, P was employed underground in the coal mining industry. On 28 January 1944, a medical board certified that he was suffering from

pneumoconiosis, that his general physical capacity for employment had been impaired by the disease, although he was not fully disabled, and that he was

suspended from employment in his former work as from 15 October 1943. P thereupon became entitled to compensation under the Coal Mining Industry

(Pneumoconiosis) Compensation Scheme, 1943. Under para 9(2)(a) of the Scheme, the compensation was to be in the form of a weekly payment, and under

para 8(1) it was recoverable from A Co, who were P’s last employers. Under para 8(2), however, C Bros were liable to make contributions to A Co, in regard

to the compensation payable, because P had been employed by C Bros for a certain proportion of the 5 years preceding the date of the injury. On 21 April

1944, A Co, without consulting C Bros., entered into a recorded agreement with P to pay him £750 in full satisfaction of his claims for compensation. While

admitting their liability to pay a fixed proportion of any weekly sums paid to P, as compensation, by A Co C Bros contended that they were not liable to make

any contribution to the sum of £750, because it was not “compensation” within the meaning of the 1943 Scheme, and under para 8(2) they were only liable to

contribute to “compensation” paid by the last employer. They further contended that the sum represented an improvident bargain by A Co:—

Held – (i) The £750 paid to P by A Co under the recorded agreement, in substitution for the weekly payments to which he was entitled by way of

compensation under para 9(2)(a) of the 1943 Scheme, was “compensation” within the meaning of the Scheme C Bros were, therefore, liable under para 8(2) of

the Scheme to contribute to the £750.

Dictum of Lord Tomlin ([1935] AC 1, at p 10), in M’Gillivray v Hope applied.

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(ii) the amount of C Bros’ contribution to the £750 should be, prima facie, the same proportion as in the case of the weekly payments, but the sum to be

contributed by them should be reduced if it were found, in the arbitration proceedings, that A Co had made an improvident agreement with P.

Bolsover Colliery Co Ltd v Oxcroft Colliery Co Ltd applied.

Notes

It is held in this case that a former employee is liable to contribute towards a lump sum payment made by a later employer, in lieu of weekly compensation, to

a workman suffering from an industrial disease. Such a lump sum payment is “compensation” in the sense of the word used by Lord Tomlin in M’Gillivray’s

case. The amount of the contribution payable is a matter for the county court judge, who, in deciding whether the agreement made by the later employer was

improvident, must have regard to the circumstances at the time of the agreement, ignoring what may have happened subsequently.

As to Contribution Between Employers in the Case of Industrial Diseases, see Halsbury, Hailsham Edn, Vol 34, pp 980, 981, para 1338; and for Cases,

see Digest, Vol 34, pp 471, 472, Nos 3847–3849, and Supplement.

For the Coal Mining Industry (Pneumoconiosis) Compensation Scheme, 1943, see Halsbury’s Statutes, Vol 36, pp 198–203. See also Willis’s

Workmen’s Compensation, 37th Edn.

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Cases referred to in judgments

M’Gillivray v Hope [1935] AC 1, Digest Supp, 104 LJPC 11, 151 LT 482, 27 BWCC 348.

Bolsover Colliery Co Ltd v Oxcroft Colliery Co Ltd [1933] 2 KB 429, Digest Supp, 102 LJKB 617, 149 LT 391, 26 BWCC 340.

Appeal

Appeal by the respondents and cross-appeal by the applicants from an award of His Honour Judge Clark Williams KC sitting as arbitrator under the

Workmen’s Compensation Acts, 1925–1943, at the Aberdare County Court on 25 May 1945. The facts are fully set out in the judgment of Morton LJ.

Valentine Holmes KC and R Gwyn Rees for the appellants, Cory Brothers & Co Ltd.

F W Beney KC and G Owen George for the respondents, Amalgamated Anthracite Collieries, Ltd.

Cur adv vult

20 December 1945. The following judgments were delivered.

DU PARCQ LJ. In this case Scott LJ and I have had the opportunity of reading in advance the judgment which is about to be delivered by Morton LJ. Scott

LJ authorises me to say that he is in complete agreement with it. I also agree with it entirely and have nothing to add to it.

I will ask Morton LJ now to read his judgment.

MORTON LJ. Up to January 1944, one Emrys Richard Price was employed underground in a colliery belonging to Amalgamated Anthracite Collieries Ltd

(hereinafter called the Anthracite Co). On 28 January 1944, the medical board appointed by the Secretary of State under the Silicosis and Asbestosis (Medical

Arrangements) Scheme, 1931 (as amended), certified (i) that Price, though not totally disabled, was suffering from pneumoconiosis to such a degree as to

make it dangerous for him to continue the work which he had been doing, and (ii) that the board had for that reason suspended him from employment in such

work as from 15 October 1943. The board further certified that Price’s general physical capacity for employment was impaired by reason of that disease.

The result of the certificate was that Price became entitled to compensation, in the form of a weekly payment, under the Coal Mining Industry

(Pneumoconiosis) Compensation Scheme, 1943, para 9(2)(a). Para 8(1) of the same Scheme provides:

‘The compensation shall be claimed and recoverable from the employer who last employed the workman in the industry … ’

Therefore the Anthracite Co was liable to pay the compensation in the first instance. Para 8(2), however, provides:

‘Any other employers who employed the workman in the industry during the 5 years preceding the date of the injury shall, unless they had at the

commencement of this Scheme ceased to carry on the undertaking of a coal mine, be liable to make to the employer from whom compensation is

recoverable such contributions as, in default of agreement, may be determined by arbitration under this Scheme.’

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Price had been employed by Cory Brothers & Co Ltd (hereinafter called Cory Bros) for 127/252 of the period during which he had been employed in the coal

mining industry during the preceding five years.

Cory Bros were willing to contribute 127/252 of any weekly sums paid by the Anthracite Co, by way of compensation to Price, but on 21 April 1944, the

Anthracite Co agreed with Price that he should be paid £750 “in full satisfaction redemption and discharge” of his claims for compensation. This agreement

was duly recorded in the Aberdare County Court, pursuant to the Workmen’s Compensation Act, 1925, s 23, but it was arrived at by the Anthracite Co without

consulting Cory Bros. The latter immediately objected on being told of the agreement, and refused to make any contribution to the sum of £750 paid by the

Anthracite Co to Price. On 20 September 1944, the Anthracite Co made an application in the Aberdare County Court for arbitration, to which Cory Bros were

made respondents. In its request for arbitration the Anthracite Co claimed that Cory Bros should pay by way of contribution a sum of £407 3s 1d. This sum

represented 127/252 of three sums, viz: (i) certain weekly payments totalling £47 17s 11d which had been made to Price before he received the £750 payable

under the agreement of 21 April 1944; (ii) the lump sum payment of £750; (iii) certain fees amounting to £10 10s paid by the Anthracite Co in connection with

the agreement. By amendment the Anthracite Co added the following words to their claim: “or alternatively such contribution or contributions in respect of

the liability of the applicants to the workman as may be just.”

Only one of these three sums is in question on the present appeal, as Cory Bros do not now dispute their liability to pay 127/252 of the £47 17s 11d, and

the Anthracite Co does not now claim to be paid any contribution towards the sum of £10 10s. Cory Bros, however, contended before the county court judge,

and contend here, that they are not liable to make any contribution towards the sum of £750. The county court judge thought that Cory Bros were not liable to

make any lump sum contribution towards the £750, and he thought it unnecessary for him to consider an alternative contention of Cory Bros that that sum

represented an improvident bargain by the Anthracite Co.

His award was in the following terms:

‘(1) I order that the respondents do forthwith pay to the applicants the sum of £23 17s. 9d., by way of contribution to the sum of £47 17s. 11d; being

the amount of the weekly payments made by the applicants to their workman Emrys Richard Price as compensation for pneumoconiosis in respect of the

period from Oct. 15, 1943, to May 12, 1944. [As to that portion of the award no question arises.] And the further liability of the applicants to the said

Emrys Richard Price in respect of the said disease having been redeemed by the applicants by payment of the lump sum of £750 in accordance with a

memorandum of agreement registered in this court on Apr. 25, 1944, and recorded on May 5, 1944, (2) I order that the respondents do pay to the

applicants the weekly sum of 16s. 3d., by way of contribution to the liability of the applicants so redeemed, such weekly payment to commence as from

May 13, 1944, and to continue (subject to review and subject also as hereinafter stated) until the same shall be ended or varied in accordance with the

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provisions of the Coal Mining Industry (Pneumoconiosis) Compensation Scheme, 1943, or other the law applicable thereto but so that such weekly

payment shall cease in any event (if not sooner ended) when the total sum of such weekly payments shall have amounted to £377 19s. 6d.’

Then there followed in para 3 an order that the respondents should pay to the applicants a sum of £40 17s 11d, being the amount of the weekly payments

referred to, from 13 May 1944, until 1 May 1945, and that they should thereafter pay 16s 3d to the applicants on Saturday in every week. Para 4 was as

follows:

‘I make no order as to the costs of or incident to this arbitration.’

I think it is plain that the county court judge was seeking, by paras (2) and (3) of his award, to put Cory Bros into the same position as they would have

occupied if the agreement of 21 April 1944, had never been made.

Cory Bros appeal, and there is a cross-appeal by the Anthracite Co. The arguments of counsel for Cory Bros may be summarised as follows. (i) There is

no privity between the workman and his former employers; it is only the last employers who are liable to the workman and the former employers have no right

to intervene between the last employers and the workman. (ii) The 􀂭 234􀀉 former employers cannot be called upon to contribute to anything except sums

which have actually been paid by the last employers. (iii) The £750 which has been paid to Price by the Anthracite Co is not “compensation” within the

meaning of the 1943 scheme and the former employers are only liable to contribute to “compensation” paid by the last employers. Thus they are not required

to contribute anything towards the £750. Counsel further submitted that in any event paras (2) and (3) of the award of the county court judge could not stand,

even although they were intended to give some relief to Cory Bros.

The first and second contentions of counsel for Cory Bros can at once be accepted. The first contention is in accordance with the wording of para 8 of the

1943 Scheme and the second is in accordance with the decision in M’Gillivray v Hope. In my view, however, his third contention is ill-founded. In

M’Gillivray’s case the House of Lords had to consider a Scheme which did not materially differ from the Scheme which this court is now considering, and

Lord Tomlin said ([1935] AC 1, at p 10):

‘I am also of opinion that the words “such contributions as in default of agreement may be determined by arbitration” do not mean “contributions”

in the strict sense of that word, that is to say “sums provided to make up the amount payable to the workman,” but mean such sums by way pro tanto of

indemnity to the last employer for what he has paid for compensation as in default of agreement may be determined by arbitration.’

In the present case the Anthracite Co has paid £750 in satisfaction of Price’s claim for compensation and in discharge of the company’s liability to pay

compensation. I think they may fairly be said to have paid it “for compensation” in the sense in which Lord Tomlin used the words. It is agreed by counsel on

both sides that the Anthracite Co was free to enter into the agreement with Price and that such agreement, being recorded, was binding on both parties. It

would be a strange result if Cory Bros, having admittedly been liable to contribute 127/252 of each weekly payment, were to be completely freed from

liability because the Anthracite Co had paid £750 to Price in satisfaction of all future weekly payments, and I do not think that the language of the Scheme

leads to that result. Counsel for Cory Bros contends that the Anthracite Co has chosen to pay something which is not “compensation,” so as to avoid paying

compensation under the Scheme. I appreciate the ingenuity of this argument, but, in my view, this court would be taking too narrow a view of the Scheme if it

excluded from the meaning of the word “compensation,” as used in the Scheme, a lump sum payment made to the workman, by means of a lawful agreement,

in substitution for the weekly payment to which he was entitled by way of compensation. I feel no doubt that the liability of Cory Bros under para 8(2) to

“make … contributions” includes a liability to contribute to this sum of £750.

In my view, however, it by no means follows that Cory Bros are liable to contribute 127/252 of that sum. It may be that the Anthracite Co has made an

improvident bargain, and if Cory Bros could establish this at the arbitration it would be right for the county court judge to reduce the amount of the

contribution to 127/252 of the sum which would represent a reasonable settlement of Price’s claims at the time when this agreement was made: see Bolsover

Colliery Co Ltd v Oxcroft Colliery Co Ltd, per Lord Hanworth MR ([1933] 2 KB 429, at pp 433, 434), and per Lawrence LJ ([1933] 2 KB 429, at p 435).

That case was decided on sect 43(1)(c)(iii) of the Act of 1925, but I think the reasoning of Lord Hanworth MR and of Lawrence LJ is applicable to the present

case. This right of the former employers does much to remove any hardship on the former employers resulting from an agreement between two other parties

on which the former employers were not consulted.

The result is that the county court judge ought to have held that Cory Bros were liable to contribute to the lump sum of £750, and he ought to have

decided the amount of their contribution on the footing that prima facie they were liable to contribute 127/252 of the total amount, the sum to be contributed

being reduced if he was satisfied that the Anthracite Co had made an improvident agreement with Price. I would add, however, that it would not be right to

decide whether or not the sum paid to Price was excessive in the light of facts 􀂭 235􀀉 occurring after the agreement was made. A bargain may be fair and

reasonable at the time when it is made, and yet after events may prove it to be a most unprofitable bargain for one party or the other. A familiar example is the

grant of an annuity by an insurance company in consideration of a lump sum payment. The annuitant may be knocked down and killed next day, or may live

twice as long as was anticipated; but neither of these happenings proves that the bargain was improvident on one side or the other.

In my view, the award of the county court judge must be varied by striking out the whole of it except para (1). Unless the parties can agree a sum, the

case must be remitted to him to fix, as arbitrator, the amount of Cory Bros’ contribution to the sum of £750, in accordance with the principles already stated.

Either party should be at liberty to call further evidence on the question whether the sum of £750 was excessive or improvident. It is unnecessary to decide

whether it would be open to the county court judge to direct that the sum fixed as Cory Bros’ contribution may be paid by instalments, since Cory Bros do not

ask for this concession. I see no reason why such a direction should not be given in a suitable case, but paras (2) and (3) of the order of the county court judge

cannot be sustained. The agreement for payment of £750 having been made and recorded, there cannot be any “review,” nor is there any weekly payment

which can be “ended or varied in accordance with the provisions of the Scheme.” Nothing that might happen to the workman after the recording of the

agreement could affect the amount of compensation payable to him under the agreement and I can see no reason why it should affect the amount of Cory Bros’

contribution to that compensation.

In substance, the Anthracite Co have succeeded on the appeal and cross-appeal, and Cory Bros must pay their costs. The costs of the further hearing

before the county court judge will be in his discretion.

Award varied. Case remitted to the county court judge to fix, as arbitrator, the amount of Cory Bros’ contribution to the sum of £750, in accordance with the

principles stated in the judgment. Leave to appeal to the House of Lords granted.

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Solicitors: William A Crump & Son agents for A J Prosser & Co, Cardiff (for the appellants); Botterell & Roche agents for Llewellyn & Hann, Cardiff (for the

respondents).

C StJ Nicholson Esq Barrister.

[1946] 1 All ER 236