Scottish Court of Session Decisions

The Agricultural Holdings (Scotland) Act 1883 (47 and 48 Vict. c. 62), sec. 1, provides—“Subject as in this Act mentioned, a tenant who has made on his holding any improvement specified in the schedule hereto, shall, from and after the commencement of this Act, be entitled on quitting his holding at the termination of a tenancy to obtain from the landlord as compensation under this Act for such improvement, such sum as fairly represents the value of the improvement to an incoming tenant.” Section 7 provides—“Not with standing anything in this Act, a tenant shall not be entitled to compensation under this Act unless four months at least before the determination of the tenancy, he gives notice in writing to the landlord of his intention to make a claim for compensation under this Act.“ In the interpretation clause (sec. 42) “determination of tenancy” is defined as meaning “the termination of a lease by reason of effluxion of time or from any other cause.”

William strang was tenant of the farm of parklee on the estate of castlemilk, belonging to captain james stirling stuart, conform to lease entered into in 1871 between the proprietor and mrs janet rankine or strang, whereby the farm was let to her for nineteen years from and after the term of Martinmas 1871 as to the arable lands, and Whitsunday thereafter as to the houses and grass. The rent was £125. William Strang had acquired right to the lease by assignation from Mrs Strang, with Captain Stirling Stuart's consent, in December 1883.

By renunciation dated 7th and 9th November 1885, William Sarang bound himself to pay the landlord £88, 19s. 8d. (whereof £25, 5s. 9d. was a balance of rent due at Whitsunday 1885, and £63, 13s. 11d. was the half year's rent due at Martinmas 1885), and also to pay £62, 10s. As the half year's rent due at Whitsunday 1886, before the stock and crop should be removed, and bound himself to remove from the whole subjects at the term of Martinmas 1885 as to the lands and grass, and at the term of Whitsunday 1886 as to the houses. This renunciation was accepted by the landlord Captain Stirling Stuart.

On 14th January 1886 Strange sent to the landlord a notice of claim for the sum of £48, 5s. 9d. in virtue of the Agricultural Holdings (Scotland) Act 1883, for unexhausted improvements, consisting of seeds, manure, and feeding stuffs. The landlord repudiated the claim as (1) not well founded, and (2) not intimated when the renunciation was arranged, and (3) not given timeously, i.e., “four months before the determination of the tenancy,” and refused on his part to appoint a referee. Strang raised this action, praying the Court to appoint a competent and impartial person to be a referee for the landlord along with William Fleming, his own nominee, to settle the difference between them as regards the claim.

The defender pleaded—“(1) The pursuer having abandoned any claim he might have for compensation under the Agricultural Holdings (Scotland) Act 1883, the petition is unnecessary, and should be dismissed. (2) The pursuer having failed to give notice of claim in conformity with the provisions of the said Act the petition should be dismissed.”

The Sheriff-Substitute ( Guthrie) pronounced this interlocutor:—“Finds that the pursuer William Strang was tenant of the farm of Parklee, on the estate of Castlemilk, belonging to the defender, conform to lease: Finds that the said lease was terminated by renunciation by the said pursuer, accepted by the defender, annexed thereto, and dated 7th and 9th November 1885, whereby the said pursuer renounced and gave up the said lease for all crops and years thereof yet to run from and after the term of Martinmas 1885 as to the arable lands, and Whitsunday 1886 as to the houses and grass: Finds that on 14th January thereafter the pursuer duly intimated to the defender, and to his factor and commissioner, a claim for compensation for improvements under the Agricultural Holdings (Scotland) Act 1883: Finds that the said claim is not excluded by the foresaid renunciation: Therefore repels the defender's pleas, and in respect that the defender has failed, for seven days after notice from the pursuer, to appoint a referee for settling the amount and mode and time of payment of compensation under the said Act, appoints Allan Kirkwood, Esq., land-agent, Glasgow, to be referee, to act along with the referee appointed by the pursuer in the premises, and decerns.

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“ Note.—… The notice is said to have been too late, the ish of the lease being at Martinmas 1885, not at Whitsunday 1886. It seems to me that this is the ordinary case of a Whitsunday entry and Whitsunday removal, with the usual provision to enable the incoming tenant to labour the arable land at the preceding Martinmas—See Hunter on Landlord and Tenant, i. 384; Earl of Hopetoun v. Wight, July 10, 1863, 1 Macph. 1097—( iff. May 27, 1864, 2 Macph. (H. of L.) 35. The point is clear, and needs no commentary.

“I do not think I can hold the tenant to be excluded from his statutory right to claim compensation by his having renounced the lease without reserving this claim. The statute which confers the right to compensation on a tenant gives it to him ‘on quitting his holding at the determination of a tenancy’(sec. 1), and ‘the determination of a tenancy’ is said (sec. 42) to ‘mean the determination of a lease by reason of effluxion of time, or from any other cause.’ There is no more usual or natural cause, apart from expiry by effluxion of time, than renunciation or agreement, and it seems altogether inconsistent with the purpose and intention of the Act to hold that every renunciation shall exclude its operation unless the right of the tenant to claim compensation is expressly reserved. In renouncing a lease a tenant is presumably aware of the rights which the law confers at ‘the determination of a lease,' and there is no reasonable ground for assuming that he waives or abandons them unless he expressly says so. The recent case of Lyons v. Anderson, June 25, 1886, is different from the present case. It related to a claim of damages by a tenant on the ground of quasi delict, and not to a claim strictly under the contract of lease or a statute, and the claim of damages had there been preferred, and apparently not insisted in, before the expiry of the lease. However that may be, the principle laid down in that and previous cases ( Waterston v. Stewart, 1881, 9 R. 155) that a renunciation of a lease imports a renunciation of all claims under it cannot in my opinion be extended so as to make such a renunciation extinguish the statutory claim for compensation which comes into existence only by reason of the renunciation itself.”

On appeal the Sheriff ( Bebby) adhered.

“ Note.—The question raised in this appeal is, whether the notice of intended claim lodged by the pursuer and his brother James Strang is a valid and effectual notice to claim compensation under the Agricultural Holdings Act 1883. Two objections have been taken on the part of the defender.… (1) That the renunciation of the lease, by expressly providing for certain payments to the landlord, impliedly exclude any possible claim for compensation on the part of the tenant; (2) that the notice was too late.… As to the first objection, I do not think that the renunciation, by expressly providing for payment of the rent to the landlord, necessarily excludes the tenant's claim under the statute, and were there any doubt on this point the provision in section 36 of the Act that any agreement by the tenant depriving himself of his right to claim compensation shall be void would prevent the tenant from being prejudiced in that way. The second objection is one of more general importance. Under section 7 of the statute it is required that to entitle a tenant to compensation he shall, ‘four months at least before the determination of the tenancy,’ give the statutory notice, and the question is, When did this tenancy determine? I am of opinion that it did not ‘ determine’ till Whitsunday 1886. The renunciation which determined it bears to be ‘from and after the term of Martinmas 1885 as to the arable lands, and Whitsunday 1886 as to the houses and grass.’ Now, although the tenant gave up possession of the arable lands at Martinmas 1885, he remained in possession of the houses and grass till Whitsunday 1886. He did not quit the subjects therefore till the latter date, and I do not think his tenancy determined till then. It is true that, as was suggested, inconvenience may arise from the statutory notice being delayed till after a new tenant has interfered with the land. But, on the other hand, inconvenience might arise from requiring that notice be given at a very early date, and in construing the statute we can hardly take a balance of convenience or inconvenience on the one side or the other as a safe guide. In these circumstances I am of opinion that the notice which was given four months before Whitsunday 1886 was given four months before the determination of the tenancy, and was therefore sufficient within the statute. The case differs materially from that of Hannan v. Ramsay, decided in the Sheriff Court of Argyleshire, and referred to at the debate. The tenant there had quitted the houses, buildings, and pasture lands at Whitsunday 1884, and had merely a right to use the barns till the 15th March 1885. He was no longer after the former date in the position of tenant, and his tenancy had, as the Sheriff held, determined. Here the pursuer remained in possession as tenant of the house and pasture land till Whitsunday 1886, and, as I have said, his tenancy did not in my opinion determine till then.”

The defender appealed, and argued—The action should be dismissed because (1) the tenant had not given timeous notice of his claim for compensation, and (2) by his renunciation the tenant was barred from insisting in any such claim. 1. Under section 7 of the Act the tenant was not entitled to compensation unless four months before the “determination of the tenancy” he gave notice of his intention to make a claim. Section 42, the interpretation clause of the statute, said that “‘determination of tenancy’ means the termination of a lease by reason of effluxion of time or from any other cause.” The first question was, did this tenancy determine at Martinmas? The lease was one and indivisible. The Sheriff-Substitute was clearly wrong in saying this was the case of an ordinary Whitsunday entry, and this was evident from a reference to the authority here relied on— Earl of Hopetoun v. Wight. Then the entry was to the houses and grass at Whitsunday, and to the arable land subsequently at the separation of the crops— Cf Jurid. Styles (4th ed.) i. 462, and (5th ed.) i. 569; Bell on Leases, ii. 146; Bell's Lect. (3d ed.) ii. 1201. Further, a comparison of sections 1 and 37 showed that the sum to be paid as compensation was to represent “the value to the incoming tenant.” But the pursuer's contention would involve this, that the notice need not be given until two months after the incoming tenant has

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taken possession of the farm. It was plain from section 28 that notice for removal must be given prior to the ish which was first in date. This was distinctly provided by the Sheriff Court Act of 1853, secs. 29, 30, and Sched. 1, to which section 28 of the Agricultural Holdings Act referred. The present lease therefore, quoad notice of removal, terminated at Martinmas 1885, and the statute intended this should be the termination of the lease, quoad notice of claim for compensation. If two different periods were taken it would lead to great inconvenience unless there was strict compliance with the provisions of the Act, the previously existing rights of the landlord were not taken away by section 110. In certain cases, e.g., under the conventional forfeitures in the lease, the lease could be terminated and no notice of claim for compensation could be given. There would be no change in the law in that case— Scott's Executors v. Hepburn, June 14, 1876, 3 R. 816. 2. The tenant

had abandoned all his claims by renouncing the lease—Hunter on Landlord and Tenant, ii. 251; Jenkin v. Younger, March 10, 1825, 3 S. 639; Lyons v. Anderson, June 25, 1886, 13 R. 1020.

The pursuer replied—1. The “determination of the tenancy” was clearly the term of Whitsunday 1886, the period at which the tenant finally quited possession of the farm. Till that term he did not relinquish possession under his lease, as though for purposes of agriculture he had quitted the farm as regards the arable land he was still in possession till that term of the houses. Any other rule would result in confusion. As long as he held possession of the honses the lease had not come to an end “by reason of effluxion of time or other cause.” It was a Whitsunday ish— Earl of Hope—toun v. Wight ( supra). 2. The claim was not barred by the renunciation. It was not a case of a conventional stipulation in the clauses of a lease. It was a claim given by statute, only arising when the holding came to an end, and which the tenant could not contract himself out of. There was in point of fact no reference to the claim in the deed of renunciation.

At advising—