Scottish Court of Session Decisions

The Sheriff Courts (Scotland) Act 1907, First Schedule, Rule 55, enacts—“Where a defender pleads a counter claim it shall suffice that he state the same in his defences, and the Sheriff may thereafter deal with it as if it had been stated in a substantive action, and may grant decree for it in whole or in part, or for the difference between it and the claim sued on.”

Held that a “counterclaim” must be a claim which could be set off pecuniarily against the claim sued for, and that when the conclusions of the action itself were not pecuniary, but merely declaratory, there could be no such thing as raising in defence a counter claim.

The Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), First Schedule, enacts—Rule 43—Within six days of the condescendence being lodged, the defender shall lodge his defences.”

Rules 55 and 56 are quoted in the rubric. John Macnab of Kinglassie, Fifeshire, heritable proprietor of the farm of Parknook, raised an action in the Sheriff Court at Kirkcaldy against John Nelson and David Nelson, both farmers, residing at

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Parknook aforesaid, tenants of the said farm, for declarator that an irritancy of the lease had been incurred.

The defenders entered into possession of the farm of Parknook at Martinmas 1904 at a yearly rent of £60. The lease, which was for nineteen years, and was dated 25th and 28th November 1904, inter alia, provided that “if the said John Nelson and David Nelson, or either of them or their foresaids … shall allow one half-year's rent to remain unpaid when the next half-year's rent shall have become due, it shall be in the power of the said John Macnab and his foresaids … to put an end to this lease and resume possession of the lands hereby let without any declarator or process of law to that effect.” The lease also contained a clause whereby the tenants accepted the dwelling-house, steading, &c., and the fences, &c., as in sufficient tenantable and fencible order and repair.

The pursuer averred—“(Cond. 3) A half-year's rent was due and payable at the term of Martinmas 1907, and is still unpaid. Another half-year's rent was due and payable at Whitsunday 1908, and is still unpaid.”

The defenders denied these averments as stated. In a statement of facts for them they averred that in offering to rent the farm they stipulated with the pursuer, and the stipulation was agreed to, that the dwelling-house, steading, and other houses and offices on the farm were to be put in a good and sufficient tenantable order and repair, and that the whole fences should also be put in a good and sufficient tenantable and fencible condition and repair. They referred to the following letter from their agent to the pursuer's agents, dated 9th November 1904—“Dears Sirs,—I have received the lease of Parknook in favour of the Messrs Nelson, which appears in order, but with regard to the undertaking on page fourth as to keeping houses and fences, &c., in good condition, Messrs Nelson agree to do so; but before signing they would require an undertaking that these are to be put in good condition. I am to see them on Monday”—and to the reply, dated 16th November, viz.—“Dear Sir,— Parknook— Kinglassie—With reference to your letter of 9th inst., the proprietor will take steps to put the house and steading in order so soon as he can get access thereto. Kindly let us have the lease duly signed in course.” Their statement of facts then continued—“(Stat. 5) … On the faith of this letter … the defenders signed the lease containing the acknowledgment and obligations before referred to, and forwarded same to the agents for the proprietor. The said lease was so signed by the defenders on the faith of the said letter granted by the pursuer's agents, but notwithstanding its terms the pursuer has not yet fully put the house and steading or the fences, &c., on the lands in good order and repair.”

They further averred—“(Stat. 8) The disrepair of the houses and steading and the defects in the fencing of the lands let to the defenders have caused and are causing them serious loss, inconvenience, and damage, and the defenders have been damnified, through the pursuer's breach of his agents' undertaking contained in their said letter and of his common law obligations, to the extent of at least £100, for which sum they crave the Court to decern against the pursuer.… (Stat. 11) As the defenders could obtain no redress from the pursuer, and as he persistently declined to fulfil the obligations which were and are incumbent upon him as their landlord under said lease and at common law, they were reluctantly compelled to withhold payment of the rents stipulated to be paid by them to him. They have accordingly declined to pay the rents of which payment was asked at Martinmas 1907 and Whitsunday 1908, and they claim that they are entitled to decree against the present pursuer for £100 sterling in respect of the loss, injury, and damage sustained by them in consequence of his persistent failure to implement the obligations incumbent upon him as their landlord under the said lease and at common law, to put the dwelling-house, steading, and other houses and offices, and also the whole fences, gates and gate-posts, roads, drains, ditches, and water courses on the said farm of Parknook (including the Sauchie Burn) in good and sufficient tenantable and fencible condition and repair.”

The pursuer pleaded, inter alia—“(1) The defenders having allowed one half-year's rent to remain unpaid when the next half-year's rent became due, the pursuer is entitled to put an end to the lease and resume possession of the lands thereby let. (3) The defence is irrelevant. (4) The defenders' counter claim is incompetent.”

The defenders pleaded, inter alia—“(1) The pursuer being himself in breach of the obligations incumbent upon him under said lease and at common law, is not entitled to enforce the provisions of the same against the defenders. (2) The subjects let not having been put in a good and sufficient state of repair at the defenders' entry thereto … ( in various particulars) …, and he having delayed and refused to do so, the defenders are entitled to compensation for the loss and injury they have thereby sustained.”

The condescendence for the pursuer was lodged on 3rd June 1908, the defenders having on 22nd May intimated that they intended defending the action.

On 10th June the Sheriff-Substitute ( Hay Shennan) pronounced this interlocutor—“The Sheriff-Substitute on cause shown allows defences to be lodged by Friday first.”

On 11th July he allowed parties a proof before answer.

Note.—“This is an action of declarator of irritancy of a lease founded on a stipulation in the lease that when two half-years' rents are due and unpaid the landlord may put an end to the lease. The defence is that the tenants are entitled to withhold the rent on the ground that the landlord has failed to give full possession of the subjects let. It is true the tenants accept the buildings as sufficient in the lease, but they

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signed the lease on the stipulation that notwithstanding this clause the landlord was to do the necessary repairs. In this respect the case resembles M'Donald v. Kyd, 13th June 1901, 3 F. 923, 38 S.L.R. 697.

I am not quite so certain of the relevancy of some of the defenders' averments as to the fences as founding a right to retain rent. But as a proof is necessary, it is desirable that the whole matter should be gone into at one time. And this seems to receive added force from rule 55 of the Sheriff Courts Act 1907, which appears to justify dealing with all defenders' counter claims. At first sight there is something in pursuer's argument that a pecuniary counter claim is not competent in an action of declarator. But in substance this is an action for rent, because the irritancy depends exclusively on the question whether the whole rent is due. I do not see how by adopting this form of action the landlord can be allowed to prevent the tenant from getting a decision on the real merits of the dispute between them.

I have, however, made the proof before answer, because all the questions on the merits will be best dealt with when the facts are ascertained.”

The pursuer appealed to the Sheriff ( Cullen), who on 29th September 1908 pronounced this interlocutor—“Recals the interlocutors of the Sheriff-Substitute of 10th June 1908, 17th June 1908, 24th June 1908, 1st July 1908, and 11th July 1908; and in respect of the failure of the defenders to timeously lodge defences to the action, decerns against the defenders in the terms craved in the initial writ: Finds the defenders liable to the pursuer in his expenses of the cause and of the appeal,” &c.

Note.—“In this case the condescendence for the pursuer was lodged on 3rd June 1908. The defences were due on or before 9th June thereafter according to the terms of the 43rd rule contained in the first schedule of the Sheriff Courts (Scotland) Act 1907, which provides that ‘within six days of the condescendence being lodged, the defender shall lodge his defences.’ The defenders did not lodge their defences within this statutory period, nor did they during its currency apply to the Sheriff-Substitute for an extension of it. On 10th June 1908, however, the Sheriff-Substitute pronounced an interlocutor whereby, on cause shown, he allowed defences to be lodged by Friday first thereafter, and they were lodged within that period.

The pursuer, in support of his appeal, challenges the competency of the interlocutor of 10th June, maintaining that, while the Sheriff-Substitute under the Act of 1907 had power, on cause shown, to extend the statutory period for lodging defences during its currency, he had no power after its expiry, and when the defenders had incurred a default, to appoint a new term for lodging defences, and that in respect of the defenders' failure to lodge their defences timeously the pursuer is entitled to decree against them, in the terms craved in the initial writ.

The question thus raised depends on the construction of rule 56 of the first schedule of the Act of 1907, which is in these terms—“… [ Quotes, supra, in rubric], …” “The Sheriff is here given power to ‘prorogate’ the time for lodging any production or pleading or implementing any order. The view maintained by the pursuer is that, according to the correct use of language, it is only an unexpired term which can be prorogated, and that to allow overdue defences to be lodged by a defender who is in default is a different thing from prorogating the original period. The question at issue is a very important one as affecting Sheriff Court procedure under the new Act. If the pursuer is right, a Sheriff has no power under any circumstances to allow the reception of overdue pleadings, however excusable may be the failure to lodge them within the normal period prescribed by the statute; and no provision is made for reponing a party against the consequences of his default. It is with considerable hesitation, and with reluctance, that I have reached the conclusion that the pursuer's construction of the rule should be sustained. To prorogate a term is to prolong or continue it or lengthen it out to a more distant date. Properly, therefore, the act of prorogation should take place while the original period is still current. To appoint a new term for the reception of a pleading after the original one has expired is also a mode of giving a party further time, but there is this difference, that in such a case the party has incurred a default, while a prorogation duly obtained during the currency of the original period involves no default. There is, I think, no doubt that in practice the word ‘prorogate’ is not uncommonly used so as to include the case of appointing a new term after the original one has expired. By way of illustration I may refer to the case of Weild v. Weild as reported in 6 Shaw at page 247. The question therefore comes to be, whether the word as used by the Legislature in rule 56 of the Act of 1907 is to be construed in this way or in the more strict sense maintained by the pursuer; and it is, I think, relevant and highly important to ascertain in what sense it has been used in former legislation affecting the Sheriff Court. Prior to the passing of the Act of 1907 the Sheriff's powers in this connection were regulated by section 6 of the Sheriff Court Act of 1853, which was in these terms—‘Where any condescendence or defences, or revised condescendence or revised defences, or other paper, shall not be given in within the periods prescribed or allowed by this Act, the Sheriff shall dismiss the action, or decern in terms of the summons, as the case may be, by default, unless it shall be made to appear to his satisfaction that the failure to lodge such paper arose from unavoidable or reasonable causes, in which case the Sheriff may allow the same to be received on payment of such sum in name of expenses as he shall think just, provided always that the periods appointed for lodging any paper, or for transmitting any process to the Sheriff, or for closing a record, may

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always be once prorogated by the Sheriff without consent on special cause shown …; and in every interlocutor prorogating on special cause shown the time for lodging any paper, the nature of such cause shall be set forth, and a definite time shall be therein fixed within which the paper is to be lodged.’ Here the reception of overdue pleadings from a party in default on the one hand, and the prolongation of the normal periods for lodging them on the other hand, are dealt with as distinct acts of procedure, the word ‘prorogate’ being used, to denote the latter according to what I take to be its primary and more accurate meaning The Sheriff was empowered by this enactment to allow the reception of overdue pleadings on payment of such sum in name of expenses by the party in default as he should think just, while, separately, he was empowered to grant a prorogation of the normal term on special cause shown. The 6th section of the Act of 1853 has been repealed by the Act of 1907, but when one finds in the latter Act a power to prorogate the time for lodging pleadings, I think it should be taken prima facie that the word prorogate is used in the same sense attached to it in the antecedent legislation. This result seems to me to receive corroboration from rule 68 of the 1907 Act, which confers power on the Sheriff to permit, upon conditions, the reception of productions not timeously lodged, a provision which would appear unnecessary if the reception of overdue productions had been already provided for under rule 56. There is no corresponding express provision for the reception of overdue pleadings.

It has to be observed on the terms of rule 56 that on the occurrence of any of the cases of default mentioned in the first part of it, the rule enacts that the Sheriff ‘ may grant decree as craved, or of absolvitor, or may dismiss the action with expenses,’ and then goes on to say ‘ but the Sheriff may, upon cause shown, prorogate the time for lodging any production or pleading or implementing any order.’ It is maintained by the defenders that the use of the word ‘may’ and the structure of the enactment show that what is intended is that on the occurrence of any such cases of default the Sheriff is to have a discretionary power to grant decree in one form or other, or, alternatively, to exercise his power to prorogate, and that such prorogation must therefore take the form of an allowance of the reception of the overdue papers or the fixing of a new term for lodging them. There is force in this view, but I do not see my way to accept it as sound. In the first place, the use of the word ‘may’ is capable of being explained by the varying form of the decree which it will fall on the Sheriff to pronounce. In the next place, the power of prorogation which is given to the Sheriff does not seem to me to be a proper alternative to the power of granting such decree. The latter power applies ‘when any production or pleading has not been lodged or order implemented within the time required by statute or ordered by the Sheriff, or where, in a defended action, either party fails to appear by himself or his agent at any diet, or fails to make payment of any Court dues or deposit’; while the power to prorogate is not one calculated to meet all these cases of default, but applies only to the lodging of pleadings or productions or implementing of orders. Again, if the inductive words of the rule were to be accepted as conditioning the power of prorogation, and if that power were therefore taken as an alternative provided to the granting of decree in the cases of default figured in the rule, the rule so construed would fail to confer on the Sheriff power to prorogate a term in the primary and strict sense of extending it during its currency when no such default had occurred.

On the whole, while I think the result at which I have arrived is an unfortunate one in respect that it involves the withholding from the Sheriff of an important discretionary power which he formerly possessed, and the adoption of a hard and fast rule which at times will operate very harshly, I do not feel able by legitimate construction to read rule 56 in such a way as to authorise the Sheriff-Substitute's interlocutor of 10th June 1908.

On the assumption that the Sheriff-Substitute had a discretionary power under rule 56 to allow the reception of the overdue defences in this case no objection was stated by the pursuer to the interlocutor of 10th June 1908.

The pursuer alternatively contended that the defences were irrelevant so far as founded on the letters mentioned in answer No. 5, and I should have difficulty in holding that these letters varied the rights and obligations of the parties as expressed in the formal lease subsequently executed. On the view, however, which I take of the question as to the competency of the interlocutor of 10th June 1908 it is unnecessary to consider this line of argument.”

The defenders appealed to the Court of Session, and the case was heard on 21st May 1909, but before the hearing the defenders had removed from the farm.

Argued for the defenders and appellants—(1) The Sheriff was wrong in holding that power to “prorogate” did not include power, after the expiry of the period for lodging defences, to grant further time. The word had been used in various statutes as well as in opinions of Judges as signifying not merely extension of time when the original period was still current but also extension of time or allowance of further time when the original period had expired—Judicature Act 1825 (6 Geo. IV, eap. 120), section 12; Court of Session Act 1850 (13 and 14 Vict. cap. 36), section 4; Act of Sederunt (Court of Session), 12th November 1825, section 47; Act of Sederunt (Sheriff Court), 12th November 1825, cap. 9, section 14; Act of Sederunt, 11th July 1828, sections 5, 80, 108, and 109; Act of Sederunt, 10th July 1839, sections 59 and 81; Weild v. Weild, December 14, 1827, 6 Sh. 247; Mitchell v. Mitchell, January 29, 1856, 28 S.J. 160;

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Nicol v. Johnston, November 17, 1888, 26 S.L.R. 61. The wording of rule 56 of the Sheriff Courts (Scotland) Act 1907, especially the use of “may” instead of “shall” in the earlier part followed by “but,” pointed to prorogation being an alternative to decree in one form or other. Conflicting decisions on the interpretation of the rule had been given in the Sheriff Courts in Davies v. Blake, June 21, 1908, 16 S.L.T. 263; Lawrence v. Gray, November 9, 1908, 16 S.L.T. 466; Cuthbertson & Company v. Todd, November 12, 1908, 16 S.L.T. 597; Brown v. Cormack, 1909, 1 S.L.T. 247, the last three being in favour of the interpretation they contended for. (2) They were entitled to retain the rent as the pursuer had not implemented the undertaking to put the subjects in proper tenantable condition. Even apart from the express undertaking in the letters, this was an implied condition of the lease. The action being in effect to compel payment of rent, they were entitled under rule 55 of the Act to counterclaim for the loss they had incurred through pursuer's breach of his undertaking.

Argued for the pursuer and respondent—The Sheriff was right in granting decree and holding that the Sheriff-Substitute had not power to allow the defences to be received. Extension of time could not be given after the expiry of the six days. Prorogation meant extension of a term not yet reached; it could not be properly applied to the granting of a new term. The construction contended for by the defenders would make rule 68 of the Act, which allowed the production, under conditions, of documents not timeously lodged, superfluous, for he would already have that power under rule 56. Rules 56 and 68 repeated the powers given under the repealed section 6 of the Sheriff Courts (Scotland) Act 1853 (16 and 17 Vict., cap. 80), except that of giving, subsequent to the expiry of the statutory period, further time for lodging pleadings. As pointed out by the Sheriff, the two parts of rule 56 were not properly alternative. (2) The defences were irrelevant. The agreement alleged to have been broken was not the lease, but an alleged antecedent agreement. The pursuer having in a formal lease accepted the premises as in good condition, could not contradict that condition by parole evidence, nor in answer to a liquid claim for rent was he entitled to retain it because of an illiquid claim of damages— Drybrough v. Drybrough, May 21, 1874, 1 R. 909.

At advising—