Scottish Court of Session Decisions

The Increase of Rent and Mortgage Interest (War Restrictions) Act 1915 (5 and 6 Geo. V, cap. 97), section 1 (3), is quoted supra in rubric], …”

Sydney Scope Shedden Smith, Moness, St Ninian's Road, Corstorphine, pursuer, brought an action in the Sheriff Court at Edinburgh against Mrs Margaret Barclay and her husband George Barclay, 34 Comely Bank Avenue, Edinburgh, defenders, in which the pursuer craved a warrant of summary ejection against the defenders.

The following narrative of the facts is taken from the note of the Sheriff-Substitute, infra:—“The house in question belongs to the pursuer, who let it to the defender Mrs Barclay on a yearly lease from Whitsunday 1916 to Whitsunday 1917, subsequently renewed each year. The rent is £19, 19s. The said defender admittedly intimated in writing on 26th February 1919 that the let was to be terminated and the house vacated at the term of Whitsunday 1919. The pursuer accepted this intimation, and in consequence thereof considered himself free to let the house to another tenant, and did let the house to another tenant with entry at the said term. But defender now refuses to leave the house, and pleads that she is entitled to continue in occupation. She explains that a lease of other premises which her husband, the defender George Barclay, entered into has fallen through, and that they have failed to find accommodation else where.”

The pursuer pleaded—“1. It being reasonable and necessary in the circumstances condescended on that the pursuer should obtain immediate possession of the house, decree should be pronounced as craved, with expenses. 2. The defences being irrelevant, ought to be repelled. 3. The defenders having given notice to terminate the said lease, and the pursuer having accepted and acted thereon, the defenders are barred personali exceptione from founding on the said Act.”

The defenders pleaded—“1. The action is incompetent as laid. 2. The pursuer's averments are irrelevant and insufficient to support the conclusions of the summons. 3. The said house not being required by pursuer for his own occupation or for an employee, or on any ground which can be deemed satisfactory in the circumstances stated, decree of absolvitor should be granted with expenses. 4. It being reasonable in the circumstances that the defenders should be allowed to retain possession of the subjects the defenders should be assoilzied.”

On 1st August 1919 the Sheriff-Substitute ( Orr) pronounced an interlocutor in which he repelled the first and second pleas-in-law for the defenders, sustained the pursuer's second and third pleas-in-law, and granted warrant as craved.

Note.—[ After the narrative quoted supra]—“Pursuer does not say he warned out the defender; his case is founded on the fact that defender voluntarily and unconditionally

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undertook in writing to vacate the house at Whitsunday 1919, that he accepted that intimation and let the house to another tenant, who now insists on getting possession.

“The case therefore raises the question whether the defender can lawfully contract out, and has contracted out, of the provisions of the Increase of Rent, &c. (War Restrictions) Act of 1915, which would otherwise govern the question. As the pursuer did not purchase the house after 30th September 1917 the provisions of the later Acts do not apply.

The question which thus arises sharply in this case has apparently not been made matter of decision and it is one of some importance. I am of opinion that it is open to a tenant in the position of defender to contract himself out of the right to remain in occupation of a house, and that the said defender has effectually done so in regard to this house.

The Act in question encroaches upon and restricts in an anomalous fashion the rights of owners of certain dwelling-houses. It prevents them from ejecting tenants in certain cases, although the tenant's lease has expired and no new lease has been entered into. The provisions of such an Act should, I think, be strictly construed. The presumption is in favour of freedom of contract. The Act itself presents a striking and suggestive contrast in its provisions anent increase of rent or rate of mortgage interest, as compared with its provisions anent ejectment of a tenant. In the former case provision is made by section 1 (1) striking at raising of rent or mortgage interest as therein set forth, and it is enacted that these provisions are to have effect ‘notwithstanding any agreement to the contrary.’ In other words, landlords and tenants, lenders and borrowers, cannot contract themselves out of the Act so far as increase of rent or rate of interest is concerned. But the section of the Act dealing with recovery of possession of a dwelling-house, or the ejectment of a tenant therefrom (section 1 (3)), has no corresponding provision. In other words there is no enactment that a tenant may not lawfully contract himself out of the right to remain in occupation of his house. Whatever be the law in regard to cases to which the Act of 1919 applies, it appears to me that in the present case landlord and tenant remain free in the matter of contracting out.

In the case of Artizans Dwellings Company v. Whitaker, 35 T.L.R. 521 (No. 27), the tenant gave a notice to quit, but it was held that the notice was only a provisional notice which was to be regarded by plaintiffs as withdrawn unless confirmed by the tenant before a certain date and that the notice was not so confirmed. Such a provisional notice Mr Justice Astbury refused to regard as a ground satisfactory to the Court within the meaning of the section. ‘As the defendant,’ his Lordship says, ‘rightly or wrongly did not intend in this case to give other than a provisional notice in June 1918, I do not think any such ground exists.’ That case stands in marked contrast to the present where the notice given by the tenant was a wholly unqualified and unconditional notice to leave the house at Whitsunday 1919, accepted by the landlord and acted upon by his letting the house to another party. I think that is a ground which ought to be regarded as satisfactory within the meaning of the section of the Act of 1915 for granting the warrant craved. In the view I take the defender's other averments are irrelevant.”

The defender appealed to the Sheriff.

On 29th October 1919 the Sheriff ( Crole) pronounced an interlocutor in which he sustained the appeal, recalled the interlocutor appealed against, sustained the second and third pleas-in-law for the defenders, repelled the whole pleas-in-law for the pursuer, and dismissed the action.

Note.—“The pursuer, who is the owner of a dwelling-house at 34 Comely Bank Avenue, Edinburgh, let the house to Mrs Barclay, one of the defenders, on a yearly lease from Whitsunday 1916 to Whitsunday 1917, at a rent of £19, 19s. The lease was renewed at the same rent for the year from Whitsunday 1917 to Whitsunday 1918, and again from Whitsunday 1918 to Whitsunday 1919. By letter dated 26th February 1919, Mrs Barclay intimated to the pursuer that she intended to vacate the house at Whitsunday 1919. The pursuer acted on this intimation and let the house to a Mrs Watson. Mrs Barclay now declines to vacate the house as the lease of other premises which had been entered into by her husband, the defender George Barclay, has fallen through, and the defenders cannot obtain other accommodation. The pursuer founds on the notice given by Mrs Barclay, and seeks in this action to have the defenders ejected from the house in question. He contends that by the notice given by Mrs Barclay and the acceptance by him an agreement was entered into by the parties outwith the Increase of Rent and Mortgage Interest Act 1915, which entitles him to the warrant craved, or alternatively that he having let the house to another person, the defender is barred personali exceptione, and that the fact that he has so let the house constitutes a ground which should justify the Court in granting such a warrant.

I am of opinion that none of these contentions is sound. Section 1 (3) of the Act above referred to provides that ‘no order for recovery of possession of a dwelling-house to which this Act applies or for the ejectment of a tenant therefrom shall be made so long as the tenant continues to pay rent at the agreed rate and performs the other conditions of the tenancy, except on certain grounds specified in the sub-section, which admittedly do not apply to this case, ‘or on some other ground which may be deemed satisfactory by the Court making such order.’ In my opinion Mrs Barclay is a tenant of a dwelling-house in the sense of this subsection who has paid her rent and performed the other conditions of her tenancy, and that the Court is precluded by the terms of the sub-section from granting an order of ejectment merely on the ground that she has given notice to quit. In the case of the

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Artizan Labourers and General Dwellings Company v. Whittaker, 35 T.L.R. p. 521, Mr Justice Astbury, while disposing of the case before him in favour of the tenant on the ground that the notice to quit given by him was only a provisional notice and could be withdrawn if not confirmed before a certain date, expressed the opinion that in the case where a tenant had given an unqualified notice such a notice would be in the same position as one given by the landlord, and goes on to say—‘It may seem whimsical that an Act passed for the relief of the tenant should apply when the tenant has himself put an end to the demise, but the language (of the sub-section) seems to me to admit of no other construction unless the provision in question is inoperative when the landlord has given notice, in which case the section would be more or less of a nullity.’

It was pointed out at the debate that 1 (3) in contrast with section 1 (1) does not in terms prevent parties contracting themselves out of the Act, but in my opinion the latter section in effect prevents the Court from enforcing such an agreement by granting a warrant of ejectment, though it may be that an action of damages would lie for a breach thereof.

Looking to the terms of sub-section 1 (3) I think there is no room in this case for the plea of personal bar.

The only remaining question is whether the fact that the pursuer let the house in question to another party on the faith of the notice given by the defender Mrs Barclay should be deemed a satisfactory ground in terms of the sub-section for pronouncing the order craved. I am of opinion that this fact is not a reason which would justify the Court in pronouncing such an order. It is not averred that the pursuer has suffered any loss or damage by the action of the defender. The only person who seems to have suffered inconvenience is Mrs Watson, the person to whom the house was let, and I do not think that the averment regarding the inconvenience suffered by her and the condition of her present house is relevant. Moreover, I think the ground upon which the Court can proceed must be a ground consistent with the grounds specified in the sub-section. It has been held in England that the discretion conferred upon the Court by the sub-section did not include a discretion inconsistent with the earlier provisions thereof. ( Stovin v. Farebrass, 35 T. L. R. 659; Price v. Pritchard, ibid, 672.)”

The pursuer appealed to the Second Division of the Court of Session.

On 28th November 1919 the Court appointed the case to be heard before Seven Judges.

Argued for the appellant—The respondents were not entitled to claim the protection of the Acts. (1) The only one of the Acts which seemed to have any bearing on the present case was the Act of 1915 (5 and 6 Geo. V, cap. 97), but in reality that Act did not apply. The Act did not extend universal protection to all occupants of houses. For example, it did not protect squatters who sat with out a title, vi aut clam aut precario, and could be removed by a warrant of summary ejection, nor did it protect tenants who paid their rent partly by services instead of in money, and it was inapplicable to the present case, because the respondents having given notice of termination of the let, it could not be said that after the termination of the let there was any longer an “agreed-on” rent within the meaning of section 1 (3) The Act implied a tenant who was such at his own will. The parties to the let had validly contracted out of the Act, even if its provisions were held to be applicable. Where it was intended to bar contracting out, contracting out was expressly forbidden as in the case of the provisions of section 1 (1). That sub-section said that its provisions should apply “notwithstanding any agreement to the contrary,” but section 1 (3). contained no such declaration, and accordingly contracting out of its provisions was valid. (2) Even if section 1 (3) applied, the Court had power in its discretion to grant the warrant of ejection “on some other ground which may be deemed satisfactory by the Court making such order.” In the present case the giving of the notice might be regarded as a wrong committed against the landlord and a satisfactory ground of ejection. Moreover, the removal of the respondent in this case might also be regarded as falling within the requirements of a landlord and a satisfactory ground of ejection. The grounds of ejection which might be deemed satisfactory to the Court were not necessarily ejusdem generis with those specially mentioned in the sub-section, but even if the principle of ejusdem generis applied, the giving of the notice was ejusdem generis with the other grounds specially mentioned in the sub-section. The following cases were referred to— Artizans, Labourers and General Dwellings Co. v. Whittaker, [1919], 2 K.B. 301; Stovin v. Farebrass, 1919, 35 T.L.R. 659, per Scrutton, L.J., at p. 662; Green-Price v. Webb, 1919, 36 T.L.R. 29; Grandison v. Mackay, 1919, 1 S.L.T. 95; Price v. Pritchard, 1919, 35 T.L.R. 672, per M'Cardie, J., at p. 673; Flannagan v. Shaw, 1919, 36 T.L.R. 34; and Hunt v. Bliss, Times newspaper, 21st November 1919.

Argued for the respondents—It was open to the appellant to bring an action of damages, but the remedy sought in the present action, viz., ejection, was contrary to the Act. The rents restriction legislation was legislation in favour of sitting tenants, and it was illegal to contract out of section 1 (3). Where it was intended to make contracting out legal the Act expressly said so. Thus in section 1 (4) contracting out was permitted “where the mortgagor consents.” The English cases showed that personal bar did not enter into the question. The Court could under section 1 (3) grant the order of ejectment if the premises were “reasonably required by the landlord,” but in order to determine whether the premises were “reasonably required by the landlord” it was necessary

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to take into consideration “the alternative accommodation available for the tenant” referred to in section 5 (2) of the Act of 1919 (9 Geo. V, cap. 7). Section 11 of the Act of 1919 enacted that that Act should be construed as one with the principal Act of 1915, and accordingly section 5 (2) of the Act of 1919 provided a canon of interpretation of the words “reasonably required by the landlord” occurring in the principal Act. Admittedly the Court could under section 1 (3) grant the order of ejectment “on some other ground which may be deemed satisfactory by the Court making such order,” but the “other ground” must be ejusdem generis with the grounds specially mentioned in the section. The code was an exclusive and not an inclusive one. The Act created a species of statutory conditional fixity of tenure— Flannagan v. Shaw ( cit.), per Scrutton, L.J., at p. 35; Hunt v. Bliss ( cit.), per Coleridge, J. The cases of Artizans, Labourers and General Dwellings Co. v. Whittaker, per Astbury, J.; Stovin v. Farebrass ( cit.);, and Green-Price v. Webb ( cit.), per Lush, J., were also referred to.

At advising—