Scottish Court of Session Decisions

This was an action of reduction at the instance of James Gowans, railway contractor, against Mr Brathwaite Christie of Baberton and Mrs Agues Mossman or Christie, widow and sole executrix and heir in mobilibus of the late Alexander Christie of Baberton. There was sought to be reduced a certain lease of the whole freestone and minerals, and all materials and substances lying under the lands and estate of Baberton, entered into in February 1866 between the said Alexander Christie of Baberton, as heir of entail then in possession of the said estate, and the said James Gowans, the pursuer.

The more important clauses of the said lease were as follows:—“The said Alexander Christie has set, and by these presents, in consideration of the rents or tack duties, and other prestations after-mentioned, lets to the said James Gowans and his heirs and assignees, all and whole the freestone and minerals, and all materials and substances, of what nature soever, lying in and under the lands and estate of Baberton, which are in the parishes of Currie and Colinton, and sheriffdom of Edinburgh, and that for the space of twenty-one years from and after the term of Candlemas Eighteen hundred and sixty-six, which is hereby declared to be the commencement of this lease, and the entry of the said James Gowans to the premises, in virtue hereof; with full power to the said James Gowans and his foresaids, at their own expense, to search for, work, win, raise, and carry away the freestone, and all minerals, materials, and substances of what nature soever, lying in and under said lands, as fully and freely as the said Alexander Christie could do himself, (then follow clauses regulating the working). Which tack, under the conditions and reservations above-written, the said Alexander Christie binds and obliges himself, and his heirs and successors, to warrant at all hands, and against all mortals, as law will: For which causes, and on the other part, the said James Gowans binds and obliges himself and his heirs, executors, and successors whomsoever, to pay to the said Alexander Christie, and his heirs and successors, for the said freestone, minerals, and substances, and materials hereby let, the sum of two hundred pounds sterling of fixed money rent per annum, and that half-yearly, at the terms of Lammas and Candlemas; and it is hereby agreed that the said fixed rent shall not be exacted for the year or period

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antecedent to Candlemas Eighteen hundred and sixty-seven, declaring nevertheless that should the said James Gowans or his foresaids, during the period from Candlemas Eighteen hundred and sixty-six to Candlemas Eighteen hundred and sixty-seven, remove from the said estate of Baberton any freestone, minerals, materials, or substances, he or they shall thereby become bound, and hereby bind and oblige themselves, to pay to the said Alexander Christie or his foresaids the sum of one hundred pounds sterling in name of rent for said period; and it is hereby declared to be in the power of the lessee and his foresaids, on giving six months' notice of his intention to do so previous to any term of Candlemas occurring at the end of the third, seventh, or fourteenth years of this tack, to remove from the subjects hereby let; and this tack, on the tenant's giving such notice at any of these periods, shall cease and determine, it being hereby declared that, in the event of the tenant availing himself of the break at the end of three years, he shall be obliged to restore the ground broken up, in such a manner as that it may be ploughed up, or to a gradient of not more than one in five, and failing this, to pay such damages as may be determined by the arbiters after provided for.” (Then follow clauses regulating the disposal of buildings, machinery, &c., upon the outgoing of the tenant.)

The statements upon which reduction of the lease was sought for were—“In the year 1866 the pursuer was induced, by the representations of the late Alexander Christie, then heir of entail in possession of the estate of Baberton, to enter into the lease now sought to be reduced. These representations were to the effect that there was a large stratum of freestone in the lands proposed to be let, of a superior quality, and capable of being worked to profit by a tenant, and in particular by a tenant becoming bound for the rent and under the stipulations in the said lease. The said representations were made to the pursuer not only by the late Mr Christie and his agents, but by his manager or factor. The said manager or factor informed the pursuer at the same time, and as part of the said representations, that freestone such as has been described had already been searched for, and found in the lands. On the faith of these representations, and in reliance on them, and under an essential error as to the subject of the lease which was induced by them, the pursuer, on 2d February 1866, signed the said lease. Immediately on entering into the said lease in February 1866 the pursuer commenced energetic operations in the way of searching for the said freestone by boring and otherwise; and he has continued these operations for a space of four years. The result of these exertions has been the discovery, that while there is some freestone on the lands of Baberton, there is (as the pursuer hereby specially avers) no such amount of freestone as was represented to him (on the faith of which representation he entered into the lease); nor is the said freestone, or any other mineral or material or substance in the lands so let, nor are all of the said substances together, capable of being worked to a profit in a mineral lease; and still less are said minerals capable of being remunerative at the rent stipulated for in said lease. The pursuer has tried the said lands at all points showing indications of freestone, but he has in every case been unable to turn out such a quantity as would repay his outlay, even upon the most economical methods which can be used for the efficient working of minerals. The first break in the said lease took place at Candlemas 1869. At that date the pursuer had already so far experimented on the ground as to be led to suspect or believe that the lease was not workable to profit, and that there was no such freestone or other mineral in the said lands as had been represented to him. He had not, however, been able within that time so exhaustively to experiment on the said grounds as finally to act upon this, and he declined in the meantime to acknowledge the lease as an existing one, by acting on the break provided in it. He accordingly continued his operations for another year. The defender, the present Mr Christie of Baberton (who had now succeeded his brother as heir in possession of the said entailed estate), was quite aware, as were also his agents, of the experimental and doubtful way in which the pursuer was carrying on the operations both before and after the said break. The pursuer, having continued his investigation for another year, finally ascertained the unworkableness to profit of the lands and minerals let to him. Neither during this year (to Candlemass 1870) nor previously, was the pursuer on any occasion able to turn out such a quantity of stone as covered his expenses in the particular operation, much less reimbursed him for the general outlays in searching and other preliminary work.”

The pursuer farther stated that when in March 1870 he became thoroughly satisfied of the unworkableness to profit of the lands and minerals let to him, he at once communicated with the landlord and his agents, and repeatedly offered and demanded an equitable arrangement, and the determination of all questions between them under the arbitration clause of the lease; but that the defender Mr Brathwaite Christie, who in 1868 had succeeded to the estate as heir of entail to his brother, had refused to accede to any such proposals or in any way to release him from his obligations under the lease.

The pursuer pleaded—“(1) The mineral lease entered into between the deceased Alexander Christie and his successors, on the one hand, and the pursuer, on the other, being unworkable to profit, and having been so from the beginning of the said lease, the same ought to be reduced, and the pursuer found to be free from the same, in terms of the declaratory conclusions of the summons. (2) The said lease having been entered into under essential error on the part of the pursuer as to the subject of the same, which error was induced by the representations of the said Alexander Christie and those for whom he was responsible, the said lease ought to be reduced, in terms of the conclusions of the summons. (3) The rents and other prestations exigible under the said lease having been exacted from the pursuer and paid by him while the lease was really unworkable to profit, but before he had finally ascertained this, the pursuer is entitled to repetition of the same, or at least to count and reckoning in respect of the same, both against the executors of the late Alexander Christie and against the present possessor of the entailed estate. (4) In the event of the defenders denying the fact of the unworkableness to a profit of the said lease, they are bound to refer the question to arbitration, or to consent to the ascertainment thereof in such form as may be agreed to by the parties, or as the Court in its discretion may see fit.”

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The defenders pleaded, inter alia,—“(1) The pursuer's statements are not relevant or sufficient in law to support any of the conclusions of the summons, or at least the same are not relevant or sufficient to support the said conclusions in so far as the same are directed against the present defender. (3) The action cannot be maintained, in respect that the pursuer did not avail himself of the break at Candlemas 1869, but continued to work the freestone after as well as before the said break.

The Lord Ordinary ( Mackenzie) pronounced the following interlocutor:—

“ Edinburgh, 2d November 1870.—The Lord Ordinary having heard the counsel for the parties, and considered the closed record, Finds that the pursuer's statements are not relevant or sufficient in law to support the conclusion in the summons for reduction of the lease, on the grounds set forth in the pursuer's second plea in law, and therefore repels the said second plea in law for the pursuer: Quoad ultra, before answer, allows the parties a proof of their respective averments, and to each a conjunct probation; and appoints the cause to be put to the roll, in order that a day may be fixed for taking the proof.

Note.—The pursuer avers that he entered into the lease libelled on under essential error, induced by the representations of the late proprietor of Baberton, and of his agents and factor. These representations, it is said, were to the effect that there was a large stratum of freestone in the lands of Baberton proposed to be let, that it was of superior quality, and that it was capable of being worked to profit by a tenant, and in particular by a tenant at the yearly rent of £200 under the stipulations of the lease.

The alleged representation that there was a large stratum of freestone in the lands of Baberton is very vague and indefinite. It is not averred that there is no such large stratum of freestone, and that the representation was false and fraudulent. The pursuer's statement is only that while there is some freestone in the lands, there is ‘no such amount of freestone as was represented to him.’ No particular amount of freestone is said to have been represented to him, and whether a stratum of freestone is large or small is a matter of opinion, as to which there may be much difference. It is not averred by the pursuer that the freestone is not of a superior quality. Then, as regards the representation that the freestone was capable of being worked to profit by the tenant, such capability depends upon many contingencies, as, for example, the skill and capital of the tenant, the rate of wages, the state of the market, costs of transit, and many other elements of hazard. Such representations are, it is thought, a mere matter of opinion, which, even if erroneous, could not form a good ground for reducing the lease. It is not stated that the alleged representations were fraudulent; but it is averred by the pursuer that he was not, at Candlemas 1869, that is after three years' possession and trial of the freestone, satisfied that there was no such freestone in the lands as had been represented to him, and that he accordingly did not avail himself of the break in the lease at that term, but continued his operations, although the next break did not occur until Candlemas 1873. The present action was not raised until fifteen months thereafter—that is, until after the pursuer had been upwards of four years in possession of and working the subject of the lease.

In these circumstances, the Lord Ordinary is of opinion that the pursuer's averments in regard to representation and essential error as to the subject of the lease, are not relevant or sufficient in law to support the rescissory conclusions of the summons.

The defender further maintained that the pursuer's remaining statements in regard to the freestone or minerals having all along been unworkable to profit were not relevant or sufficient in law to support the conclusions of his summons. But, after careful consideration the Lord Ordinary is of opinion that the proper course is to allow a proof before answer of these statements. Edmiston v. Preston, 13th January 1675, Dict. 15,172; Gray v. Hogg and Bennet, 11th January 1706, 4 B. Sup. 635.”

Against this interlocutor, so far as it allowed a proof before answer, the defenders reclaimed, and contended that, looking to the terms of the lease, and the conduct of the tenant, the action should have been dismissed simpliciter; and that it was no case for an investigation into the question of unworkableness to profit.

Shand and Balfour for Mr Brathwaite Christie.

Scott and Brand for Mrs Christie.

Solicitor-General and Taylor Innes for Mr Gowans, the pursuer.

Senior counsel were not called upon for the defenders.

At advising—