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Colonial Cases

Loureiro v. Lemann and others, Trustees of Dent and Co., 1871

[trover, title deeds]

Loureiro v. Lemann and others, Trustees of Dent and Co.

Supreme Court of China and Japan
11 May 1871
Source: The North-China Herald, 19 May 1871

 

LAW REPORTS.

SUPREME COURT.

May 11th, 1871.

Before C. W. GOODWIN, Esq., Deputy Chief Judge.

J. LOUREIRO

v.

W. LEMANN, V. KRESSER and A. TURING,

Trustees of DENT & Co., by their Attorney H. P. HANSSEN.

Claim of $11,500 damages for the detention of certain of plaintiff's title deeds and share-scripts by the defts.

   Mr. BIRD for plaintiffs.

   Mr. HARWOOD for defendants.

   His Lordship understood that Mr. Hanssen represented the defendants in this case by arrangement.

   Mr. BIRD said Mr. Hanssen did so and held power of Attorney and had always acted for the Trustees.

   Mr. BIRD then opened the case.  The plaintiff in this action claimed damages for the retention of certain documents which he alleged had come into the possession of defendants, as representing the estate of Dent & Co., by which detention plaintiff had sustained damages through his having been unable to dispose of the property to which they were titles.  The petition set forth that the documents were title-deeds and others, merely claiming damages without declaring to what extent, for that had to be made up by the nature of the decision.

   The first issue was whether there had been detention by the Trustees, secondly what would be the measure of damages the Trustees would have to pay, and thirdly the special plea Mr. Harwood had raised upon the subject of this action, that the award of the arbitrators between the parties had included this and that the plaintiff could not therefore have no case.  He hoped the Court would decide upon the right of the plaintiff to bring this action and the measure of damages, that would be a subject to be settled hereafter between the parties.  Mr. Harwood he believed relied on the plea of the award at arbitration and intended to hand in as evidence the submission and the award.  That award found that the Trustees could not legally detain the documents.  The Trustees had retained them on the ground that there was a lien for a sum due by Mr. Loureiro to the estate, but as such a lien did not exist the Trustees were not entitled to a legal conveyance.  It would save the time of the Court in taking evidence and so forth of this matter, if the detention were allowed to be settled by the award.  Inasmuch as the award would be handed in by the other side, and would show the documents could not be lawfully detained under it, which he would claim when it was handed in.

   As far as he could see, though he of course could not say what additional evidence the defendants would adduce in support, the submission and award would prove nothing, because the question of damages was not submitted to the a arbitrators nor decided by them.  He had besides this, other evidence which he should adduce to the Court, to show that it never was the intention of the parties to submit this question of damages to the arbitrators, that no question of damages was submitted, that the arbitrators could not have taken such question into their consideration, and that they had never considered it in their award.  Further, he would show that at the time of the arbitration, the question of damages was not a matter of difference between the parties. N

   The question raised here was not of the validity of the arbitrators'' award, but as to whether the present claim was met or satisfied by that award.  He understood Mr. Harwood would rely upon the particular construction he would put upon the award, but he would have to disprove the case as he put it that the question of damages was not a matter of difference between the parties.  As to the measure of damages, he fancied there could be no difference between himself and his friend.  The learned Counsel referred to numerous authorities as to the right of the plaintiff to claim damages between the value which the property or stocks bore when placed in Mr. Hanssen's hands, and the value of these at present; quotiny "Main on Damages," pag4 217.  In the case there given, some scrip had been sold and delivery asked for when it was at a certain market rate, but it was not given till it had fallen to a much lower rate; and the jury found under direction that the difference between these rates formed the measure of damages.  A case where corn had been sold was similarly decided, and one of the same nature relating to railway scrip he quoted from "Addison on Torts, "page 388. 

   These authorities would he thought sufficiently show what the measure of damage was in an action of this nature for the retention of documents relating to property.  In one case Williams - 4 & 5 Common Bench 318, the question was raised whether the jury were bound to find the detention before they found damages, and the case showed that these two points could be treated separately.  Another case Barron v.  Arno, Queen's Bench, was cited under the same head.  He thought these authorities would be sufficient for the position he had taken, that the true measure of damage was the difference between the value of the property at the time the documents ought to have been given up, and the time they were given up, if given up at all. It seemed reasonable too that it should be so,  for otherwise it might be possible for a man to inflict great injury by giving up the documents just before action was brought, and the party injured would have no redress at law.  He would now call his first witness.

DAVID MACLEAN, sworn, said - I am Manager of the Hongkong and Shanghai Bank.  I was one of the arbitrators in reference to certain disputes pending between Mr. Loureiro, Nagasaki, and Messrs. Dent & Co.'s trustees.  I understood the questions before us to be the right of the trustees to detain certain title-deeds and documents, and the amount due between them on accounts current.  I did not understand there was any claim for damages made.  When we finished the case we did not allow Dent's trustees any interest on the amount due to them, as we found certain sums had been due to Mr. Loureiro in the accounts.  We found in fact no sum as damages, but we refused interest simply because we found one of two points in Mr. Loureiro's favour.  No evidence of damage was adduced before us.  At the same time I thought all the questions between the parties were settled by the award.  There was something s aid between you and Mr. Rennie which I did not at the arbitration pay attention to.  I don not remember Mr. Rennie putting a question like this "Then we are to understand that the question of damage is not before the arbitrators?"  But I was not paying attention to your discussion with Mr. Rennie, which I presumed to be of a legal nature.  Mr. Hanssen was sitting on my right and close on your left.

   Cross-examined by Mr. Harwood. - I considered the object of the arbitration was to decide all questions relating to the detention of the documents and the accounts.  I was under the impression that everything was finished when the award was made.  We did not allow interest to Mr. Loureiro because we thought the whole case might have been finished years ago, and because there were one or two points in Mr. Loureiro's favour.  It was principally in regard to the accounts we gave this award, but also taking into consideration the detention of the documents.

   By Mr. BIRD. - I said I thought everything was finished, meaning that we had decided upon all the points submitted to us.  I thought all these points were raised specifically with regard to the detention of documents, equitable mortgages and questions of indebtedness between the parties.  It was because we decided upon all those points I thought everything was finished.  And I have said that because we thought the matter might have been settled years ago we allowed no interest.  I was not aware that any substantial damage was sustained by Mr. Loureiro in consequence of the detention of the documents.

   J. LOUREIRO, sworn, stated - I am plaintiff in this case.  I left here in Jan. 1864, when I was on intimate terms with Mr. Hanssen.  I handed him before I left the title-deeds of all my property, he being my friend and in the same employ.  Matters had been much troubled in Japan, arising from the murder of Mr. Richardson and a probable English war with Japan.  I also gave Mr. Hanssen power of attorney in the usual form, but it did not authorize him either to mortgage or sell my property.  I requested M r. Hanssen at one time to purchase some property for me, in 1863, a Dock share.  He purchased one, and I claim ten now because that one share represents, from the reconstruction of the Company, ten shares.  I entrusted the documents to Mr. Hanssen for safe-keeping till my return from Europe.  Mr. Hanssen was then about to be made a partner in Dent & Co.

   I returned from Europe in June 1865, by which time Mr. Hanssen had been admitted a partner.  Nothing was said about the documents, but Mr. Hanssen claimed a balance of account against me for Dent & Co., which I disputed.  Mr. Hanssen and Mr. Dent then in Shanghai, said they were not partners at the time the items were charged, so they must wait Mr. John Dent's arrival from England, before going into the matter.  I was not asked till January 1866 to give a mortgage on my property, and up to that time believed I could get the documents any time I applied for them.

   Mr. Bird read and handed in a letter written by Mr. Loureiro and dated 12th January 1866.

   Witness said - That was the reply to a verbal application from Mr. Hanssen regarding the mortgage.  With the exception of what is cut out, I swear this is a true copy.  The copy is one made at the time and not copied in my book because I happened to be over here when I wrote it.

   Mr. BIRD said the other side had the original and might produce it.

   Witness continued. - I applied for my documents in January and again, in July 1866, verbally to Mr. Hanssen.  He said he could not give them up until my account with Dent and Co., was settled.  I owed him no money personally; but on account of Dent & Co., in which he was then a partner, he declined to give them up.  I was at the time going to Hongkong, and returned about the end of August.  I then saw Mr. Hanssen and Mr. Turing, and told them that in Hongkong I had seen Mr. Dent, and that he said he would write to them here to have the matter arranged.  Mr. Turing told me they had got such a letter and promised to make up the accounts.  I stayed in Shanghai say three weeks, but did not get them.  I next applied through Overweg and Co., in Dec., 1866, they being then my agents in Shanghai.  I next applied some time in March the following year.

   The application for the documents by Messrs. Overweg and Co., with Mr. Hanssen's reply, was read and handed in.

   Another letter dated 12th Dec. from Mr. Loureiro to Mr. Mowatt also read.

   Witness continued. P- I still believed that Mr. Hanssen had possession of the documents and I next applied through Messrs. Overweg on 9th March 1868.  I have not the answer to that letter.  I have been unable to find it; but the documents were not given up to Messrs. Overweg.  I then retained you in th4 matter.

   Mr. BIRD read correspondence he had with Mr. Mowatt, by which it appeared that the documents had been handed back to Mr. Hanssen.

   Witness continued. - I instructed you to commence proceedings in the Danish Court, and they were suspended because it was more convenient for me to come over to Shanghai.

   Mr. BIRD then referred to the annulment of the proceedings re Dent and Co. in bankruptcy, by which the present defendants were made trustees of the estate.

   Examination resumed. - I applied to the Trustee in Hongkong because I was on the point of leaving for Europe.  I did so because I was informed by the agents of the S. S. N. Co. that Mr. Hanssen, acting for the trustees, had tried to attach some shares in that Company.

   Mr. BIRD observed that in respect of the S.S. N. shares they did not claim damage because these had gone up instead of down.  Mr. Bird here read a letter of 14th of April 1870, written by plaintiff from Nagasaki to the trustees regarding the letter of Mr. Hanssen to S.S.N. Co. which he had received along with the dividends.  He now asserted that dent & Co. had no legal claim upon the shares or any other documents which were intrusted to Mr. Hanssen before he became a partner and were by him handed over as a security for an account between Dent & Co. and plaintiff.  Plaintiff also called on the trustees to deliver them up to his attorney, under pain of damages, and offered to submit the question of their right to keep them to Sir Edmund Hornby.

   Examination resumed - I personally got no answer, but on the 10th of August, the day before Sir Edmund Hornby left for Europe, my attorney, Mr. Young, got a note from Mr. Hanssen saying that the trustees agreed to the arbitration of Sir Edmund Hornby, but as there was no time to submit it to him offering to take any other arbitrator suggested when reference had been made back to me.  I then authorized Mr. Young to get the matter settled by arbitration, naming two parties, Mr. Maclean and Mr. Rennie, but at first, after Sir Edmund Hornby's departure I suggested Mr. Goodwin.

   Various letters were read in reference to the arrangement of the arbitration.  Mr. Loureiro suggested the gentlemen above, and stipulated that it should only have reference to his claim for the delivery of the documents, while Mr. Hanssen insisted that the arbitrators should also go into the question of the accounts.

   Witness continued - I did not at any time demand any sum of money from the Trustees, Mr. Hanssen, or any one representing Dent & Co., nor until this petition was filed did I ever make any claim for damages.  The first question for arbitration was whether Dent & Co.'s Trustees had any right or title to the documents of mine which they held.  I did not propose any other question, but Mt. Hanssen insisted that the question of accounts should also be settled.  Dent & Co. made up and account including many items which I disputed, and I made up one of which they disputed many items.  I showed a balance at my credit and they at theirs.  There was no other question, and no other dispute between Dent & Co. and myself.  I remember a conversation which took place between you (Mr. Bird) and Mr. Rennie, who did not see that the documents and accounts should be kept separately, and   said that if I did not owe money of course the documents would be given, but that if I did then under the award they should be held.  You told Mr. Rennie that you had been particularly required me by to keep these matters separate.  And with regard to the proceedings at the Danish Court, Mr. Rennie said he supposed they would cease because of the arbitration.  You said "that depends."  I remember Mr. Rennie saying after you told him about the Danish Court business, "then wee are to understand there is no question of damages before the arbitrators."  You looked at me and as I shook my head you said "no;" that there was not.  Mr. Rennie, Mr. Maclean, Mr. Hanssen, you, and myself, were present. (Witness here described the position of each in the room.) There was no other talking going on at the time.  Mr. Hanssen made no remark whatever that I know.  The property in Nagasaki represented in these documents had depreciated in value considerably, and the shares of the Shanghai Dock Company are worth a great deal less than they were formerly.

   Cross-examined by Mr. Harwood - My first direct application to the Trustees was on the 14th April 1870.  I have since executed in terms of arrangement a mortgage on these documents.  The property has gone on depreciating since 1865-6, and even since 1870.  The Dock Shares may not have depreciated since 1870.  I signed the agreement myself, but I did not read it through.  It was approved of by my counsel.  I have tried to dispose of these properties since 1870, but was unable because I had no title deeds.  I inserted advertisements regarding them, and within the last 3 weeks lost an offer.  I had to forego offers also between 14th Aperil and 14th Nov., 1870, because I had no title deeds to give.  Mr. Hanssen possessed the original deeds, of which there is a copy at the Consulate at Nagasaki.

   The Court here adjourned for half an hour.

   When the Court re-assembled, Mr. Bird stated his intention to get into the witness box himself, to relate the substance of a conversation at which he was present, and which he considered material to his client's case.

   R.  W. M. BIRD. - I was engaged as counsel for Mr. Loureiro in the late arbitration case between him and the Trustees of dent & Co.  Immediately before the reference was gone into before the arbitrators, Messrs. Rennie and Maclean, a conversation took place between Mr. Rennie and myself on the subject of the reference.  Mr. Rennie considered that the two portions should be taken together.  I argued, on behalf of Mr. Loureiro, that the two portions should be kept apart, because it was material to him to ascertain whether the documents had been rightfully retained.  In fact that was the motive, as he informed me, which induced him to come before the arbitrators at all.  After Mr. Rennie had agreed to keep the matters separate, the conversation turned upon certain proceedings which had been taken by Mr. Loureiro in the Danish Consulate, and Mr. Rennie asked whether it was our intention to continue these.  I replied - that depended; meaning, it depended upon the result of the award; and then, after some further conversation, Mr. Rennie put a question to me (I cannot remember the exact words) to this effect - then we are to understand that the question of damages is not before the arbitrators? and in putting the question, he turned towards Loureiro, as though putting the question to him.  I also glanced at Mr. Loureiro and he expressed his dissent.  Whereupon I simply said "No," to Mr. Rennie.  This conversation took [place in the presence of Mr. Maclean the other arbitrator, Mr. Hanssen who was representing the Trustees, myself and Mr. Loureiro.  Mr. Rennie and I were the only people then conversing in the room, and Mr. Hanssen made no remark either expressive of assent or dissent.  After that, the subject matter was gone into.

   To Mr. HARWOOD. - Mr. Rennie sent me a draft agreement which I altered on behalf of Mr. Loureiro in accordance with the instructions he had given me; and he had given me no instructions to claim damages.  As the agreement now stands, I approved of it.  I wish to explain - This agreement specifies the questions which were to be submitted to arbitration.  There was no question of damages raised.

   Mr. Harwood then called

   R. T. RENNIE, who said - Mr. Young and Mr. Hanssen called on me jointly and requested me to arbitrate in this case.  When I was asked to act, I was told there were points both of law and of accounts.  I said that I did not consider myself competent to act alone in a matter of accounts, and asked that a professional accountant should be associated with me.  Some objection was made to a mere accountant as an arbitrator, and it was suggested that Mr. Maclean should be asked to act.  This agreement was drafted by me and sent to both parties for approval.  It was corrected by both sides. 

   I remember the conversation which Mr. Bird has related, and I entirely agree in what he has said of it.  The agreement states that the arbitrators are to consider a claim with regard to detention of title deeds.  My object was to ascertain whether, under that wording, any claim for damages was to be brought forward.  From Mr. Bird's conversation I was under the impression that the question was waived.  The impression upon my mind, was that no damages were sought for.

   Mr. HARWOOD on behalf of the Defendants contended that the subject matter of this case was in difference between the Plaintiff and Defendants at the time of the reference, and was within the scope of the Agreement of Reference, and that the Plaintiff was therefore precluded from bringing the present action.  He referred to that Agreement which recites that

Whereas certain differences have arisen between the said William Lemann, Victor Kresser and Alexander Turing as such Trustees aforesaid and the said Jose Loureiro, and by the said Jose Loureiro against the said William Lemann, Victor Kresser and Alexander Turing in respect of the said estate of the  said firm of Dent and Company with regard to the detention of certain Title Deeds and other documents alleged by the said Jose Loureiro to be his property, and with regard to certain equitable mortgages claimed by the said William Lemann, Victor Kresser and Alexander Turing as such Trustees over the property of the said Jose Loureiro, and as to whether the said estate is indebted to the said José Loureiro, or the said Jose Loureiro is indebted to the said estate in any or what sums of money, it is hereby agreed by, and between the said parties to refer the same to the award order and final determination of Richard Temple Rennie, Barrister at Law, and David Maclean, Banker, both of Shanghai in the Empire of China arbitrators nominated by the said William Lemann, Victor Kresser, Alexander Turing and Jose Loureiro respectively to determine whether the said Trustees can lawfully retain the said Title deeds and documents, and as to whether the said equitable mortgages claimed by the said Trustees are good, and whether the said Trustees are entitled to have a conveyance made to them by the said Jose Loureiro in regard to the property claimed under the said equitable mortgages, and whether the said estate of dent and company is indebted to the said Jose Loureiro, or the said Jose Loureiro indebted to the said estate in any or what sums or sums of money, and generally to determine all matters in difference between the two parries.

   The Agreement also provided that the parties should in all things stand to, and abide by perform fulfil and keep the award, and that none of them should bring or prosecute any writ of error, or any action or suit at law, or in enquiry against the others or other of them concerning the matters referred.

He urged that nothing could be fuller or more comprehensive than the words of the Agreement; they necessarily included all claim for damages, and said that it could not be contended that the parties meant to refer simply the question whether the Defendants were lawfully entitled to the possession of the documents or not, but their object was to refer all matters relating to the detention of the documents, and prevent litigation - if not it would be providing  for a subsequent law suit which would entirely be at variance with the intention of the parties.  He submitted that if a party weather intentionally or accidentally omits to bring to the notice of the arbitrators any claim within the scope of the reference, he is precluded from subsequently proceeding to enforce it. 

   Mr. Harwood then cited in support of his argument the following cases, Smith v. Johnson 15 East 213; Dunn v. Murray, 9 Barnwell & Cresswell 780; Smalley v.  Shornton, 27 L.J. C. P., Jewell v.  Cheshire 36 L.J. 186; and Russell on Arbitrations 477, and submitted that upon the authority of those cases the Plaintiff was barred by the Agreement of reference and the award, from bringing the present action.

   If the Court should be of opinion that the Plaintiff was not so barred then he contended that the petition disclosed no case of action for anything more than a claim for nominal damages for the detention of the documents between thr 14th April, 1870, the time when the Plaintiff first gave notice to the Defendants to return them, and the 17th November, 1870, when the submission was made, and the documents came lawfully into the possession of the defendants - he urged that the Defendants had nothing to do with the detention of the documents by Mr. Hanssen or Mr. Mowatt - they were only responsible fort their own action.  The Deed under which they were appointed related merely to the partnership affairs of dent & Co., and not to the private estates of the partners.  No special damage was alleged in the petition, and it had not been shown that the properties had depreciated in value at all between the 14th April, 1870, and the 17th November, 1870.

   Mr. BIRD would first proceed to take into consideration the arguments which Mr. Harwood had urged in support of his case.  Mr. Harwood, in opening, had read to his Lordship the material part of the submission to reference, and hard argued that from the wording of that document it sufficiently appeared that the subject matter of the present action was one of the questions submitted to the arbitrators.  He would, however, draw his Lordship's attention to the words of reference which ran

"it is hereby agreed to submit the same to the award, &c., &c., of arbitrators nominated, &c., to determine whether the said trustees can lawfully detain the said Title deeds, &c., as to whether the said  equitable mortgages claimed by the said Trustees are good, &c., &c., and whether the said estate of Dent & Co. is indebted to the  said J. Loureiro, or the said J. Loureiro indebted to the said estate in any and what sums or sums of money."

These were the points actually specified, and then came the general words which are usually contained in submissions.  But he contended that where the points submitted were specifically set out, that there the general words must be construed and controlled by the questions so set out.  If they had not been stated specifically there might have been some colour for the argument of the other side; but as the words stood what object could there have been in inserting at length the questions submitted, if other questions had been intended to be referred also. He maintained therefore that his friend's reading of the instrument was not the correct one.

   The JUDGE said it would have been perfectly consistent that the arbitrators should go into the question without the question of damages being raised at all.  But of there really had been damages, the claim would have suggested itself.

   Mr. BIRD had no instructions in regard to damages.  The intention obviously was to leave to the arbitrators the determination of the questions set forth; nor had any evidence been given upon any other.  Mr. Harwood had contended further that if one of the parties intentionally or inadvertently omitted to refer a point to the arbitrators, he could not raise it afterwards.  He (Mr. B.) quite agreed.  At the same time, of this matter had been, by the understanding, tacit or otherwise, between the parties, withdrawn from the arbitration, the case was quite different.  If one of the parties stated openly that this question was not included in the reference, and the other party, although present, raised no objection, how could it be said to have been included in the reference?  Mr. Loureiro had said in his evidence that it had been stated, in conversation immediately before the reference was gone into, that the point was not to be considered by the arbitrators; and he (Mr. B.) had corroborated that evidence, as also had Mr. Rennie.  This conversation took place in the presence of Mr. Hanssen, who did not say that he objected.  He regretted that Mr. Harwood wass not present at this conversation, because he might have suggested that the question ought to be raised, when he (Mr. B.) would at once have applied for time to consult his client.  But the conversation did take place in the presence of Mr. Hanssen; who was there as representing the trustees, and who, strange to day, had not been called to refute (if possible) the testimony adduced by him.  There had been therefore no concealment, nor wilful keeping back of any matter in difference.  He contended therefore that the case Smith v.  Johnson which Mr. Harwood had quoted in support of his argument was not in point here.  In that case it had been agreed to refer certain disputed accounts which in fact were all the matters in dispute.  A matter of account had not been brought before the arbitrators, but had been kept back intentionally, whereupon it was held (and justly so) that it could not be made the subject of a subsequent action; but this was by no means the case here, there was no concealment, and the matter alleged to have been kept back never had been actually referred. He contended that after the conversation which had taken place, in the presence of the parties to the arbitration, the arbitrators could not take the point into consideration.  It was not before them.

   The JUDGE - Does not the evidence go to show that the arbitrators did not know there was to be any question of damages - rather than that the question was kept back?

   Mr. BIRD said that was a point which he proposed to consider presently.  He was now only replying to the points raised by Mr. Harwood.  Mr. Bird went on to distinguish the other cases relied on by his opponent, pointing out how that in them a cause already begun had been referred and that the actions subsequently brought were based upon some or one of the issues raised in the actions referred.  Here there was no action referred, therefore no issues raised other than those set out in the submission.  In short he had been unable to find any cases which went against the cases on which he relied - Golightly v. Jellicoe cited in notes to Ravee v.  Farmer 4 T.R. 147, Seddon v.  Tutop 6 T.R. 610.

   With reference to Mr. Harwood's argument that Mr. Loureiro was only entitled to nominal damages between April and December, it of course lay upon his client to show that he had sustained substantial damages.  But if he could prove that he was undoubtedly entitled to claim and receive them, it had been arranged between mr. Harwood and himself that, in order to save time and thr trouble and expense of getting evidence from Japan, the  question of the amount of damage should not be brought forward now, but that of the Court considered the plaintiff entitled to maintain this action, the Court might fix the measure of damages and the time from whence the same should be computed, when the actual sum could be thereafter settled.  Mr. Harwood had further contended that the Trustees were not responsible except for such time as they had themselves retained the documents.  Now this action was not brought against the Trustees personally, but in their capacity of representatives of the estate.  It was the estate which was sued, because the detention had all along been in the name of the estate and for its benefit.  His client was not suing Mr. Hanssen personally not the Trustees personally he was suing the estate through its representatives for the time being, and he said you retained my deeds when you had no right to do so - they say, we had a right to do so; but when the question came to be decided it was found that they had no right to detain the documents.

   He now proceeded to the two contentions which he had to make - 1st, that the matter never was intended to b e submitted to arbitration; in fact, by consent tacit or otherwise, it was not submitted.  He would ask his Lordship to glance over the evidence, especially the letters which constituted the negociations for the reference.  Mr. Loureiro wrote first, proposing an arbitration as to the right of the Trustees to retain his documents; and after a time received a reply, agreeing to submit the point to reference.  These negociations ensued between Mr. Young acting for Mr. Loureiro and Mr. Hanssen, Mr. Young saying that the intention was to limit the reference as to the right of the Trustees to retain the documents, Mr. Hanssen objecting and insisting upon the disputed accounts being also arbitrated upon. Subsequently it was agreed that the questions of accounts and of the right to retain the documents should be submitted, and no more.  Clearly the question of damages was never intended to be submitted.

   His second contention was, that the matter was not within the scope of the reference; and he relied, for prod on the conversation which he had related, and which had been corroborated by Mr. Loureiro and Mr. Rennie, while Mr. Maclean - who had not been paying attention thinking it was a point of law they were discussing - was unable to speak to the point; but in his evidence he states that he did not consider the subject of damages.  Mr. Rennie said - "I considered the question of damages was waived."  Therefore it is clear not only that the arbitrators did not consider the matter, but that they did not do so because they were told, by one of the parties in the presence of the other, that it was not before them.

   THE JUDGE should think it was within the scope of the reference.

   Mr. BIRD feared his Lordship was looking the case as though an action of detinue had been referred.  If it had been so, then the question would have been within the scope of the reference. But no such action had ever been brought against the Trustees, and no such action was referred.  The case was simply that Dent & Co. said they had a right to the documents; Loureiro said they had not.  Dent & Co.  said they had a claim against him, he said he had a claim against them.  Those were the matters referred, however the other side might endeavour to twist the wording of the submission.  That the damages were not to be arbitrated upon, was proved by the conversation already referred to.  The question there put was put openly, and his client had s aid it was not to be referred.  The question of damages was not raised; no evidence was given thereon nor was it named in the agreement.  All other points were set out; but this one was specially omitted.  There reference was merely one of certain points which the parties had agreed to refer.  If there had been any difference as to the purport of the reference, it would not have been made.

   The JUDGE - If, after the parties had gone to a reference, they find out another matter in reference?

   M r. BIRD - Either party can insist that it be submitted.  But here the point was mooted beforehand; end expressly excluded.

   The JUDGE said it might have been excluded through a misunderstanding.

   Mr. BIRD thought in that case the Court would rather support the claim of his client, than uphold a defence which was in the nature of a technical objection and which would bar a just claim.  But there was another point which he relied upon still more strongly viz: that the matter was not a matter in difference at the time of reference.  Mr. Loureiro in his evidence had stated that he had never made any claim for damages, had never demanded payment of any sum of money therefore; and this had not been contested.  Then if no demand was made, how could there have been a refusal or matter in difference?  In effect, the defendants were trying to make out that Mr. Loureiro's claim for damages was satisfied by the award of the arbitrators.  But if his Lordship would refer to the award, he would find that not a word was said about damages.  Defendants tortured the wording of the agreement to make it appear the question of damages was in difference; but he hoped he had clearly proved that it was not; and, moreover, that it could not have been taken into consideration by the arbitrators. The argument on the other side was that it was impliedly submitted, and therefore decided upon, and a number of cases had been cited to support that view.  But his reading of the law differed from that of his learned friend.  He (Mr. B.) held that the law was founded upon reason and logic.  The reason of admitting a plea of arbitrament and award as a bar to future proceeding was to prevent a man suing another twice for the same cause.  But that plea could not be urged here, because the suit for damages had never occurred.

   The JUDGE -But was it not your duty to raise the question?

   Mr. BIRD admitted that it would have been his client's duty to submit the point if it had been then a matter in difference, and if at the conversation mentioned, it had been insisted upon by the other side.  But it was not raised.  Mr. Rennie had asked whether they were to consider the question, and had been told, no.  The question therefore was not before the arbitrators.  If the other side objected to the reservation, they should have said we don't understand it in that light; we want every possible point raised.  The he (Mr. B.) would have said, - we are not in accord, I must refer to Japan for instructions.  He thought, if his Lordship would look at the correspondence, he would see that it was never his intention to admit this question to reference.

   The JUDGE inferred so.

   Mr. BIRD - Then the question was not before the arbitrators, and they could not take it into consideration.  The Defendants' case was in fact, an attempt to raise a technical bar to his client's suit.  Even though he might have sustained substantial damages, he would be barred from claiming them by this technical plea.  Take for a moment the other side of the case; and suppose that he (Mr. B.) had tried to upset the award on the ground that the arbitrators had omitted to consider and award upon the matter of damages.  Would not the defendants have at once replied, But you never submitted the matter, so far from it, you actually withdrew it from the arbitrators?  The gist of the whole case lay in the question - Can the plaintiff's present claim for damages be said to have been satisfied by the award of the arbitrators?  Most assuredly not.

   Her thought the true measure of the damages was the depreciation in the value of the property between the time it ought to have been given up, and his Lordship would perhaps state at what time the property should have been given up, by the Trustees, so that they might know from what time they should estimate the damages which would then be a matter of computation.  The trustees became liable for damages, if any, and were responsible from the earliest time the estate should have given up the documents.  In the first instance, it was shown in evidence, the documents were deposited with Mr. Hanssen for safe keeping.  The arbitrators found an award that the trustees were not justified in retaining them, and he asserted that this proved an informal cause of conduct to have been pursued by the trustees.  Mr. Hanssen kept the documents before Dent & Co. became bankrupt, and he did so because he claimed a lien upon them.  The arbitrators declared there was no lien, therefore Dent & Co. became liable to them.  Mr. Loureiro had seen other partners in the house about the business, who ought to have repudiated if they did not ratify Mr. Hanssen's act. 

   They next came to the bankruptcy proceedings.  Mr. Mowatt was appointed Assignee but as it was long since, many of the documents forming the thread of the correspondence had been lost.  The documents in question however were handed to Mr. Mowatt and he held them as official assignee, and when applied to for them. Instead of returning them to Mr. Loureiro he hands them back to the very man who handed them to him.  He did not wish to state, as there was no evidence before the Court on the point, all he knew of how the documents were handed backward and forward.  It was shown, however, that Mr. Hanssen was appointed one of the Trustees and held a power of attorney which if the Court desired he would no doubt produce, to show what time he acted as attorney for the trustees.  The trustees, with the exception of mr. Turing were all absent, but Mr. Hanssen acted for them the whole time and at any rate had quite lately written to the S. S. N. Co. claiming to attach these documents on the ground that the estate of Dent & Co. had an equitable lien, signing himself for the Trustees and warning the Company from transferring the scrip or delivering up the documents.  It was shown by the letter of Mr. Loureiro of 14th April that he had applied to the Trustee for the papers, but did they give them up?

   Who showed anxiety to have the accounts settled up?  Mr. Loureiro.  Who applied to have the matter ended by arbitration? Mr. Loureiro.  His letter of 14th April showed this.  The trustees, however, took no notice of that letter, to Mr. Loureiro personally, but Mr. Hanssen, in writing to Mr. Young on 10th August following said he had heard of Mr. Loureiro's proposal for arbitration.  Why was it not the trustees who proposed the reference, if they considered their right so clear?  But no; they took another course, Mr. Hanssen wrote to the S. S. N. Co. requesting them not to allow the scrip to be dealt with till the trustees could effect a legal transfer.  If the trustees did not approve the acts of their attorney, they should have at once repudiated them; but instead of doing so they took no notice of the arbitration proposal for two or three months, though they all the time held on to the documents.  And now Mr. Harwood turned round and said that the estate was not responsible.  Who was responsible then?

   Mr. Hanssen set up a lien on behalf of Dent & Co. and from the point when he and Mr. Mowatt took up the affairs of the trust, dated the connected thread and regular course odf procedure whereby, from the very commencement, the estate of Dent & Co. and those in charge of it had declined to give up these documents.  In reason therefore the estate was responsible.  It might be that the trustee of an estate was not worth a straw, but at the same time trustees on a very considerable estate, the guardian of documents worth a million of money.  And while the trustees refused to deliver up the titles to certain property the owner might be compelled to borrow money at high interest, or might be unable to sell at a favourable opportunity or by fifty other ways become a heavy loser, and when he came to ask for redress he was told that the man he could sue wass not worth a cent and that the estate inanimate and cannot be sued.  Would such an answer carry any weight in any reasonable man's mind?  The estate of Dent & Co. and not the trustees was responsible. 

   The trustees were responsible to the parties interested in the estate, if they put it to unreasonable expense. They were responsible to Mr. Loureiro also, but that did not prevent the estate being so as well.  There was no reason why because he could not sue the trustees personally he was ousted from his action against the estate.  It was true that the estate was inanimate and could not be sued, but its representatives might, else it was difficult to see how justice could be obtained in a case of this nature.  The estate could not be directly proceeded against here, because it was not in liquidation, but under an arrangement whereby the property was under trustees, by the 97th section, for the benefit of creditors.  The claim by the trustees against Mr. Loureiro was Tls. 17,000 while the other side of that in Court was $11,500, and it had been agreed that in case of the decision being in his client's favour the one claim should be placed so far against the other.  He now confidently left his case to his Lordship.

   His Lordship said he should take time to look over the caser carefully; it afforded some matter for consideration before decision.

May 17th.

   In this case the plaintiff sues for damages for the wrongful detention of certain title deeds and share certificates.  An adjudication by arbitrators under a reference to arbitrate is set up in bar, and the validity of this plea is the first point to be considered.

   It is urged on the part of the plaintiff that the question of damages was never before the arbitrators and was not disposed of by them.  It is not contended that they did not dispose fully of all points of difference between the parties which were brought before them, or that the arbitration can be set aside, but that the question of damages is one which it was never intended to submit to them, and that consequently it can now be brought forward as a ground of action.

   The agreement of reference is carefully drawn, and states that certain differences had arisen between the parties regarding claims by the defendants as trustees of Dent & Co., against the plain tiff, and by the plaintiff against the defendants, with regard to the detention of certain title deeds and other documents alleged by plaintiff to be his property, and with regard to certain equitable mortgages claimed by the defendants, and as to whether the trust estate is indebted to the plaintiff or the plaintiff to the estate, and it is referred to the arbitrators to determine whether the said trustees can lawfully detain the said title deeds and documents, and whether the said estate is indebted to the said plaintiff or the said plaintiff to the estate, "and generally to determine all matters in difference between the said parties."

   Taking the reference as it stands, I cannot but be of opinion that supposing the arbitrators to have found that the deeds had been wrongfully detained, and the claim of an equitable lien upon them was bad, the further question, whether any damages were due to the plaintiff in respect of the detention, was one within the scope of the reference, which was intended to decide all matters in difference between the parties; by which I think it must be understood all matters fairly arising out of the subject matters submitted to them.

   It is in evidence, however, that on the meeting of the arbitrators to hear the matter argued, the express question was put by one arbitrator: "Is or is not the question of damages before us?" and the answer given by the plaintiff and his Counsel was "No;" upon which the arbitrators considered that a claim for damages was waived.  Accordingly no evidence of damage was adduced by the plaintiff, and the question was entirely omitted from their decision.

   Notwithstanding the able and ingenious reasoning's of the learned Counsel for the plaintiff, I am unable to see anything to take this case out of the principle very clearly laid down by Lord Tenterden in Dunn v. Murray (9 B & C. 788) following the decision of Lord Ellenborough in Smith v. Johnson (15 East, 213.)  There a claim had been made by a literary man who had been dismissed by his employers before the period for which he had contracted to serve them had expired.  He brought an action for wages generally and also for damages in respect of his dismissal.  All matters of difference in the case were referred, and ultimately on the hearing no claim for damages was urged.  Lord Tenterden says:

"Now it is clear that the present claim might have been brought before the arbitrator o that occasion, and in the case of Smith v. Johnson Lord Ellenborough lays it down, that where all matters in difference are referred, the party, as to every matter included within the scope of such reference, ought to come forward with the whole of his case.  So here the present claim was within the scope of the former reference, it was the duty of the plaintiff to bring it before the arbitrator if he meant to insist upon it as a matter in difference and he cannot now make it the subject of a fresh action."

These words seem to me conclusive of the present case.  Unquestionably, if the question of damage was not a matter in difference between the parties at the term of the reference it was because the plaintiff declined to raise it, that is he represented that there was no difference existing about the question.  I think, then, that he is estopped from saying that a difference now exists upon a point which was within the scope of the reference, and which he might have insisted upon before the arbitrators.

   Costs follow the verdict.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School