Scottish Court of Session Decisions

Subject_1Lease
Subject_2Renewal of Lease
Subject_3Agreement to Pay Increased Rent Inferred from Tenant's Remaining on after Intimation of New Terms
Subject_4Tacit Relocation.
Facts:

The tenant of a shop, more than forty days before Whitsunday, received a letter from his landlord's agent intimating that his rent for the coming year was to be £ 110 instead of £80 as it had been before. The tenant's agent replied that the tenant would not agree to these terms. On 5th April the landlord's agent wrote in answer, saying that his former letter contained the conditions upon which the tenant would occupy the shop for the incoming year. The tenant without any further protest remained on in the shop. Held that he was liable for rent at the rate of £110 per annum.

This was an action brought in the Sheriff Court at Glasgow by Miss Margaret M'Farlane and Miss Agnes M'Farlane, 424 Saint George's Road, Glasgow, against Alexander Burgess Mitchell, wine and spirit merchant, 420 and 422 Saint George's Road, Glasgow, in which the pursuers craved decree for the sum of £55, being the half-year's rent due at Martinmas 1899 for the licensed premises occupied by him as their tenant.

The defender admitted that he was tenant of the premises during the term ending Martinmas 1899, and that he refused to pay rent at the rate now asked. He averred that he had been tenant of the premises during the year from Whitsunday 1898 to Whitsunday 1899 at a rent of £80 per annum; that no fresh terms had been agreed on between the parties; that he had never been warned away by the pursuers; and that the premises had been retaken by him for the year from Whitsunday 1899 to Whitsunday 1900 at the old rent by tacit relocation. He admitted liability for rent at the rate of £80 per annum, and stated that he was willing to pay the rent due, at that rate, or at such rate as might be fixed

Page: 706↓

by the Court. He also stated that at the beginning of 1899 the parties were negotiating regarding a lease for several years ; that while these negotiations were pending, the defender, at the suggestion of the pursuer's agent, lodged an application for a renewal of his licence, and that after he had done so the pursuer's agent attempted to raise the rent to the rate now claimed, but that the defender had refused to agree to these terms.

The defender pleaded, inter alia—“(3) The defender not having agreed to the terms of any new lease, and not having been warned away, his tenancy of the premises in question must be held to be renewed on the former terms (i.e., at a rent of £80 per annum.)”

The pursuers pleaded—“(1) The defence is irrelevant, and the pursuers are entitled to decree as craved. (2) The sum sued for having become due by the defender to the the pursuers at the term of Martinmas last, and not having been paid, pursuers are entitled to decree as craved.”

Certain letters were referred to and produced, the material parts of which were as follows :—

On 30th March 1899 the pursuer's agents wrote to the defender— “As you have failed to arrange terms with us as to the tenancy of the shop 420 and 422 St George's Road, held by you as tenant under our clients the Misses Macfarlane as proprietors, we have now been instructed to intimate to you that your rent for the coming year from Whitsunday 1899 to Whitsunday 1900 will be £110 sterling, and that the shop will be occupied by you on the following conditions”— [Then followed certain conditions as to the conduct of the business]. On 4th April 1899 the defender's agent wrote to the pursuers' agents— … “Mr A. B. Mitchell has handed me your letter to him of the 30th ult. The holiday has prevented its being replied to sooner. Mr Mitchell cannot agree to the terms of your letter.” … He requested that the draft of the proposed lease should be sent to him for revisal.

On 5th April 1899 the pursuers' agent wrote to the defender's agent—“We have your letter of yesterday. Our letter of 30th ult. contains the conditions on which Mr Mitchell will occupy this shop for the incoming year.” …

To this letter no reply was made on behalf of the tenant, and he continued to occupy the premises in question without further protest.

On 25th January 1900 the Sheriff-Substitute ( Spens) issued an interlocutor in which he repelled the defences, and decerned as libelled, with expenses.

Note.— “Defender is a yearly tenant under pursuers. On 30th March 1899 pursuers' agents wrote intimating, inter alia, that the rent for the ensuing year from Whitsunday 1899 to Whitsunday 1900 would be £110. There is no room for tacit relocation in this case. Defender admittedly has stayed on. There never has been any recal of that letter, and in these circumstances I hold that he is liable for rent at £110 for this year's current rent. This intimation, it will be seen, was given more than forty days before Whitsunday 1899.”

The defender appealed to the Court of Session, and argued—When there is a current lease, unless either (1) the tenant is duly warned away and effectual steps are taken for his removal, or (2) a new agreement is concluded between the parties, then tacit relocation takes place, and the tenancy is continued upon the same terms as before—Ersk. ii. 6, 35. It is not sufficient that one of the parties shall have shown a disposition to insist upon a change in the conditions of lease. Here there was no warning away. The letters of 30th March and 5th April did not in themselves amount to a warning away, and however that might be they were not followed up by any effectual proceedings for the removal of the tenant. If any warning was ever given it must be held to have been departed from. In any view, the landlords, having attempted to exact rent at a higher rate for the subsequent term, could not now maintain that the tenant had been duly warned away. Neither was there any new agreement concluded between the parties. No doubt assent to new terms of lease might be inferred from a tenant remaining on after receiving timeous notice that the rent was to be raised, but it was not possible to draw such an inference where the tenant expressly refused to assent to the new terms and the landlords took no steps to have him removed. See Morrison v. Campbell, June 22, 1842, 4 D. 1426, where the judgment proceeded upon the ground that the tenants had not intimated their refusal to agree to the new terms. Here the tenant had done what the tenants there had failed to do. It was also to be noted here that the parties were in negotiations for a lease, and in these circumstances the tenant could not be held simply by staying on to have acquiesced in new proposals to which he had expressly refused his assent. Tacit relocation might take place although the parties were not strictly speaking tacit— M'Intyre v. M'Donald, December 11, 1829, 8 S. 237; Robertson & Company v. Drysdale, February 21, 1834, 12 S. 477. For an instance of the kind of case in which possession was held to be referable not to tacit relocation but to a new arrangement, counsel referred by way of contrast to Sutherland's Trustee v. Miller's Trustee, October 19, 1888, 16 R. 10.

Counsel for the pursuers were not called upon.