Scottish Court of Session Decisions

By section 1 of the Agricultural Holdings (Scotland) Act 1883 (46 and 47 Vict. cap. 62), it is provided that a tenant who has made on his holding any improvements specified in the schedule thereto shall be entitled on quitting his holding to obtain from the landlord as compensation such sum as fairly represents the value of the improvements to the incoming tenant. Part III of the schedule specifies certain improvements to which the consent of the landlord is not required in order to entitle the tenant to compensation.

By section 42 of the Act “holding” is defined as “any piece of land held by a tenant.”

By section 3 of the Market Gardeners Compensation (Scotland) Act 1897 (60 and 61 Vict. cap. 22), which amends and extends the provisions of the Act of 1883 as to improvements executed in or upon market gardens, it is provided that where after the commencement of the Act (1st January 1898), it is agreed in writing that a holding shall be let or treated as a market garden, the following provision, inter alia, shall have effect:—“(3) The following improvements shall, as far as regards such holding, be deemed to be comprised in Part III of the said schedule— (i) the planting of standard or other fruit trees permanently set out; (ii) planting of fruit bushes permanently set out; (iii) planting of strawberry plants; (iv) planting of rhubarb and other vegetable crops which continue productive for two or more years; (v) erection or enlargement of buildings for the purpose of the trade or business of a market gardener.”

Section 4 of the said Act enacts as follows—“Where under a lease current at the commencement of this Act a holding is at that date in use or cultivation as a market garden with the knowledge of the landlord, and the tenant thereof has then executed thereon, without having received previously to the execution thereof any written notice of dissent by the landlord, any of the improvements in respect of which a right of compensation or removal is given to a tenant by this Act, then the provisions of this Act shall apply in respect of such holding as if it had been agreed in writing after the commencement of this Act that the holding should be let or treated as a market garden.”

By section 6 of the said Act it is provided that “for the purposes of the principal Act and of this Act the expression ‘market garden’ shall mean a holding or that part of a holding which is cultivated wholly or mainly for the purpose of the trade or business of market gardening.”

By lease dated 19th April and 2nd May 1881 Henry Callendar of Prestonhall and Westertown let to David Whytt Ewart Smith the farm of North Elphinstone, which extends to 359 acres or thereby, for nineteen years from Martinmas 1880.

By the lease Mr Smith bound himself to cultivate and labour the lands let according to the rules of good husbandry, and not to run out the same by irregular or over-cropping, and in particular never to have more than one-half of the lands in white crop at any time during the running of the lease, and to have the other half always in grass, fallow, or green crop, and never less than one-sixth part thereof in grass, and to leave the lands so at his removal. The lease contained a clause binding the tenant to pay an additional rent of £5 per acre for each acre cropped contrary to its terms.

At the end of 1898 Mr Smith gave notice

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to the landlord that he intended to leave the farm at the expiry of the lease at Martinmas 1899.

On 7th July 1899 Mr Smith, who for a considerable number of years had used part of the farm for growing raspberries and strawberries, sent to the landlord a notice of claim for compensation under the Agricultural Holdings Act 1883, and the Market Gardeners Compensation Act 1897. In this notice were included the following items:—

( c)”In respect of fruit bushes permanently set out, 6 acres 3 roods 11 poles raspberry bushes, containing 27,319 bushes at 6d.	£682	19	6
( d) In respect of strawberry plants—18 acres 1 rood 10 poles; consisting of first year's strawberries—9 acres 2 roods 27 poles, and 57,247 lineal yards at 2d. per yard	£468	14	6
‘Second year's strawberries—8 acres 2 roods 23 poles, and 48,238 lineal yards at 1d. per yard	200	19	10
	£669	14	4
( e) In respect of the erection of buildings for the purpose of the trade or business of a market gardener— Tomato house	£25	0	0
Packing shed	6	0	0
Store, &c. house	10	0	0
	£41	0	0”

Following on this claim Mr Smith presented a petition to the Sheriff-Substitute at Haddington for the appointment of a referee under the Acts.

The landlord lodged defences to this petition, in which he objected to the above items being made the subject of the reference.

On 10th December 1899 the Sheriff-Substitute ( Shirreff) appointed Walter Hors-burgh Gibson, tenant of Camptoun, Haddington, as referee.

On 17th December 1899 Mr Callander presented a note of suspension and interdict in which he called Mr Smith and Mr Gibson as respondents, and prayed the Court to interdict Mr Smith from insisting in or prosecuting the foresaid items of his notice of claim, and to interdict Mr Gibson, as referee foresaid, from entertaining or awarding any sum in respect of the items (c), (d), and (e) of the notice of claim. The complainer was subsequently allowed to amend the prayer of the note by adding the following words:—“Or otherwise to interdict, prohibit, and discharge the said respondent David Whytt Ewart Smith from insisting in or prosecuting and following further the foresaid items of said pretended notice of claim in so far as they relate to alleged improvements executed prior to 1st January 1898.”

The complainer averred (Stat. 3) that about ten years ago, notwithstanding the terms of the lease, the respondent Smith, without any notice to or permission from the complainer his landlord, began to use a portion of a field on the farm for growing raspberries and strawberries, and continued to do so until the expiry of the lease. He also averred as follows:—“(Stat. 5) The complainer believes and avers that the greater portion of the said alleged improvements, in respect of which compensation is claimed under the said items of claim, were executed prior to 1st January 1898, when the said Market Gardeners Compensation (Scotland) Act 1897 came into operation.”

The respondent averred, inter alia, as follows:—“(Ans. 3) Admitted that about fourteen years ago the respondent commenced to cultivate raspberries and strawberries, and that he has carried on that cultivation ever since with the full personal knowledge of the complainer, and also with the personal knowledge of the successive factors on the estate, who have been five in number, without objection from the complainer or any of said factors. It is common to grow market garden crops on farms in the locality in which North Elphinstone is situated. It is the centre of a large market garden industry, and many of the farms in the neighbourhood are partly cultivated as market gardens. Strawberries were grown on another part of the farm during the respondent's lease by a sub-tenant of the respondent, and permission was got from the complainer's factor to sub-let part of the farm for that purpose.” (Ans. 5, 6, and 7) …. “Admitted that the greater portion of the improvements in question was executed prior to 1st January 1898.” ….

The complainer pleaded, inter alia—“(2) As the Market Gardeners Compensation (Scotland) Act 1897 does not apply to a holding such as North Elphinstone, the complainer is entitled to interdict as craved with expenses. (4) In any event, the respondent is not entitled to compensation for alleged improvements executed prior to the commencement of the said Act, and the complainer is therefore entitled to suspension and interdict in terms of the alternative prayer of the note.”

The respondent David Whytt Ewart Smith lodged answers and pleaded, inter alia—“(6) The prayer of the note ought to be refused with expenses, in respect that the respondent is entitled, on a sound construction of the Market Gardeners Compensation (Scotland) Act 1897, to compensation for his improvements executed prior to as well as after 1st January 1898.”

On 29th December 1899 the Lord Ordinary on the Bills ( Kinnear) passed the note and refused interim interdict.

Thereafter the reference proceeded, and the referee issued his final award on 29th January 1900. The complainer appealed to the Sheriff.

On 15th March 1900 the Lord Ordinary ( Kyllachy) pronounced the following interlocutor:—“Interdicts, prohibits, and discharges the respondent the said David Whytt Ewart Smith from insisting in or prosecuting and following further the items of the pretended notice of claim specified in the prayer of the note, in so far as they relate to alleged improvements executed prior to 1st January 1898: Quoad ultra refuses the prayer of the note: Finds no

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expenses due to or by either party, and decerns.”

Note.—“In this case I do not, I think, require to resume the facts. They appear upon record as succinctly as I could state them.

The first question is whether the respondent's claim for alleged improvements under the Market Gardens Act of 1897 is wholly outwith the statute, in respect that the respondent's holding is an ordinary agricultural farm, and that only a part of it has been cultivated as a market garden. The affirmative is maintained by the complainer on the ground that the statute only applies where ‘a holding is cultivated as a market garden,’ that a holding is prima facie an entire holding, and that there is nothing in the interpretation clause either of the Act of 1897 or of the principal Act (the Agricultural Holdings Act of 1883) which defines a holding as including part of a holding.

On this question—which, as it seems to me, involves only a verbal puzzle—my opinion is with the respondent. The Act of 1883 defines a holding as ‘any piece of land held by a tenant;’ and the Act of 1897 contains only an interpretation of the phrase ‘market garden’— which, however, it proceeds to define as ‘a holding, or that part of a holding which is cultivated wholly or mainly for the purpose of the trade or business of market gardening.’ In these circumstances the question comes really to be, whether the words ‘any piece of land held by a tenant’ cover any piece of land so held, whether it be a part or the whole of the actual holding. Now, I am not sure how far that interpretation would work as applied to the principal Act. I can see that with respect to some of the clauses of that Act its application might be difficult. But however that may be, one thing is, I think, clear enough, that the interpretation clause of the latter Act —the Act of 1897—assumes, if it does not express, the interpretation suggested. Otherwise the clause in question—I mean the interpretation clause of the Act of 1897— would as far as I see, be unintelligible. Accordingly, in my opinion, it follows that, on the just construction of the Act of 1897, it must be held that the term ‘holding’ includes any part of a holding.

The next question is, whether it does not appear sufficiently on the face of the record that at least a large and separable part of the complainer's claim is outside the statute, and cannot therefore be properly adjudicated upon by either the arbiter or the Sheriff.

The part of the claim of which this is sought to be affirmed is the demand for compensation in respect of strawberry, raspberry, and other plants planted in the years from 1894 to 1897, prior to the commencement of the statute in January 1898. The complainer says that, assuming all other facts in the respondent's favour, the 4th section of the statute (being the section on which the claim is rested) confines the operation of the statute to improvements of the required description executed without dissent by the landlord after the commencement of the Act.

I am, on the whole, of opinion that on the just construction of the section the complainer is right. The question appears to turn on the meaning of the word ‘then,’ occurring on the fourth line of the section; and that word, as there used, means, in my opinion, and must mean, ‘thereafter’ or ‘subsequently,’ as maintained by the complainer—not ‘theretofore’ or ‘previously,’ as suggested by the respondent. In other words, the true meaning of the 4th section appears to be that in the case of current leases, and with respect to improvements executed after the commencement of the Act, it shall not be necessary to have a written agreement, dated after the commencement of the Act, agreeing that the holding shall be treated as a market garden, but that it shall be enough with respect to such improvements (1) that the landlord ‘at the commencement of the Act’ knew that market gardening was being pursued; and (2) that, so knowing, he did not dissent in writing from the execution of the improvements for which compensation is claimed.

The opposite reading is not, as it appears to me, required by the grammatical construction, and it seems to involve at least two absurdities: (1) that compensation shall be paid for old improvements, but not for new,—that is to say, shall be paid only for improvements executed before the Act; (2) that with respect to such old improvements the landlord's consent shall be held implied unless he shall have expressed his dissent before the commencement of the Act, and also before, it might be, he had any knowledge that his land was occupied as a market garden.

It has not been, it may be proper to note, suggested that what the 4th section really means is, that if under a current lease and subject to the prescribed conditions any improvement of the required kind is executed, the effect is to subject to compensation all improvements whenever executed, whether before or after the Act, and whether or not dissented from by the landlord. It is true that if the section were to be read quite literally, such a construction might be maintained. For, as expressed, the result of making an improvement is not that it shall be itself compensated, but that the Act shall apply as if an agreement in writing had been executed in terms of section 3. And that being so, it is perhaps true that under section 3 the effect of such an agreement is quite general, and is not confined to improvements executed after the date of the agreement, or even to improvements executed after the date of the Act. But it is, of course, necessary that the statute shall receive a rational interpretation; and when language is obviously elliptical, the necessary implications must be supplied. Here it is, I think, plain enough that the whole enactment of the 4th section applies only to the improvements which it describes. These improvements are its subject-matter, and as applying to them it must be read. Reading it otherwise, the result would, inter alia, be that if after the commencement

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of the Act a tenant in the position of the respondent contrived to plant without previous dissent from his landlord a single strawberry plant, he would thereby open to himself a claim to be compensated for all improvements falling under the Act, whether past or future, and whether made with the landlord's consent or in face of his express dissent. I must say that I do not think that this would be a rational construction of the statute, and therefore I am not surprised that the respondents did not venture to maintain it.

I am on the whole, therefore, of opinion that, so far as the respondent's claim applies to improvements made prior to the commencement of the Act, the claim is outside the statute, and that neither the arbiter nor the Sheriff is entitled to deal with it.

It remains to consider whether, this being so, there is any reason why interdict should not be granted, at least to the modified effect expressed in the complainer's amended prayer. It appears to me that there is no such reason. It is said that the arbitration has proceeded, and that the arbiter has issued his award; but it is, I think, settled practice that if a process of interdict has been timeously brought, it is no obstacle to a final interdict that, pendente processu, the illegal proceedings have been completed— See Grahame v. Magistrates of Kirkcaldy, 9 R. (H.L.) 91, and other cases cited at the debate.

It is also said that there has been an appeal to the Sheriff, and that under the Act the Sheriff is final. But the appeal is only taken ob majorem cautelam, and where the question is whether the proceeding is within or outside the statute, there can be no finality.

It is said finally that the Court does not as a rule assume that the statutory tribunal will exceed its powers, and does not therefore as a rule interpose ab ante. As to this, however, there is, in my opinion, no general rule. It is a question of circumstances and discretion, and, taking the decisions as they have occurred, there are, I should think, as many one way as the other. Here the point at issue is not only distinct and separable, but arises sufficiently on the pleadings. Moreover, the Court is informed that the arbiter has (if I am right in my view) in fact misconstrued the statute and exceeded his jurisdiction. Altogether I can see nothing to be gained by refusing to utilise this process, in which the question can quite well be tried, and putting the parties to the expense of a reduction. Such a course would, I must say, strike me as somewhat pedantic.

Accordingly, on the whole matter I am of opinion that the complainer is entitled to interdict in terms of his alternative and qualified prayer, and that quoad ultra the suspension should be refused, no expenses being found due to or by either party.”

The respondent Smith reclaimed, and argued—Section 4 of the Act of 1897 had a retrospective effect and gave the tenant compensation for improvements executed prior to, as well as for those executed after, the commencement of the Act. The Lord Ordinary had not stated the respondent's argument correctly. He maintained that the section applied to all improvements executed both before and after the commencement of the Act. The landlord's notice of dissent was on a sound construction of the section dissent whenever the holding was begun to be used as a market garden, and that might be before the commencement of the Act. This showed that the Act had a retrospective effect. The Lord Ordinary had turned “has then” into “shall thereafter.” The section provided that if a tenant was using his holding or part thereof as a market garden at the date of the commencement of the Act without the written dissent of the landlord, he was entitled to compensation for all improvements made by him during the period of such use.

Argued for complainer—The Lord Ordinary's construction of the meaning of section 4 was right. “Then” as used in the section meant “thereafter.” The whole tenour of the Act showed that it had no retrospective effect. The provision as to the landlord's dissent in writing would be of no avail, if the Act applied to improvements before its commencement. That provision was inserted in order that the landlord might be able to stop the application of the Act. In any event, if the section was ambiguous, it must be interpreted so as not to apply retrospectively— Maxwell on Interpretation of Statutes, 3rd ed. 298.

At advising—