Scottish Court of Session Decisions

In July 1909 Robert Maitland Christie of Durie, Fifeshire, raised an action in the Sheriff Court at Cupar against Alexander Birrell and William Birrell, farmers, Banbeath, Fifeshire, concluding for, inter alia, (1) the half-year's rent due at Whitsunday 1909 of the farm of Banbeath and Cottown of Durie; (2) additional payment in respect of new cottages there for the period from

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Martinmas 1907; and (3) one-half of the fire insurance premiums paid by the pursuer since Martinmas 1905, all in terms of lease between the parties dated 16th October 1905.

The lease provided, inter alia — “And the said Robert Maitland Christie has agreed, and hereby agrees, within the period of six months after being requested by the said tenants, to erect at the steading of said farm an implement shed with a poultry-house on end of same, and also to erect at such convenient place as may be mutually agreed upon two additional cot-houses for farm servants similar to the present cot-houses; and in respect of said additional buildings the said Alexander Birrell and William Birrell bind and oblige themselves and their foresaids to pay to the said Robert Maitland Christie or his foresaids during the currency of this lease the sum of ten pounds sterling annually, and that half-yearly, along with and in addition to the rent as before stipulated, commencing at the first term after the erection of the said additional buildings: And the said Alexander Birrell and William Birrell hereby take and accept the whole farm and other buildings (including dwelling-house, and also including the said implement shed, poultry-house, and additional cot-houses when completed), and also the whole fences, gates, roads, drains, ditches, and water-courses on the said lands, as in sufficient tenantable condition and repair, and also accept the farm as sufficiently fenced, and shall be bound to uphold and keep the said whole buildings, fences, gates, roads, drains, ditches, and water-courses in like condition and repair at their own expense during the currency of this lease, and so to leave them at the expiration or earlier termination thereof, ordinary tear and wear excepted.”

The defenders averred that they called upon the pursuer by letter dated 28th May 1906, in terms of the above obligation, to have the additional buildings completed by 28th November 1906, but that the said buildings were not properly completed and fit for occupation until the autumn of 1907. “(Stat. 4) In consequence of the want of the said cottages the defenders were put to serious inconvenience, and incurred considerable loss in not being able to make suitable arrangements for their servants. They were obliged to engage a different class of servant from what they would have been enabled to do had the cottages been ready for occupation at the term of Martinmas 1906. In like manner the defenders suffered great loss and inconvenience through the want of the implement shed and poultry-house, and to make room for the shed they were obliged to be at the expense of removing a stack of oats. They were prevented from keeping the head of poultry which they would have done had the poultry-house been erected and ready for occupation, and similarly the implements on the farm were left outside exposed to the weather and seriously deteriorated in consequence of the want of a proper shed in which to store them against the inclemency of the weather. That loss and damage the defenders moderately estimate at the sum of £30, which covers the cost of removing said stack, and which they maintain they are entitled to compensate and set against the sums claimed from them by pursuer under the present action. (Stat. 5) .… The pursuer was bound prior to the entry of the defenders to said farm at Martinmas 1905, or at anyrate immediately thereafter, to switch and cut the hedges and deliver them to the defenders in a proper tenantable condition. The pursuer failed to perform that operation although repeatedly called upon to do so, and the hedges were only cut by the pursuer in December 1908. The result to the defenders has been that they have suffered much inconvenience and loss through the hedges remaining uncut from the date of their entry down to the spring of 1909. This loss and damage the defenders moderately estimate at the sum of £20, which they claim as a deduction from the sums claimed by the pursuer under this action. (Stat. 6) At or before the term of Martinmas 1905 the fences on the farm had also become dilapidated from ordinary tear and wear, and many of the fences and gates required not only extensive repairs but considerable renewals. This was pointed out to the pursuer prior to said term by the defender Alexander Birrell. In like manner the roofs, floors, and windows of the farm dwelling-house were not in a habitable and tenantable state at the term of Martinmas 1905, and extensive repairs to replace ordinary tear and wear were also required upon the farm buildings themselves. The pursuer was bound at or before the term of Martinmas 1905, or immediately thereafter, to renew and repair such portions of the fences and gates on the farm as had got into disorder through ordinary tear and wear, and he was also bound to repair and make thoroughly tenantable and habitable the farm dwelling-house and the farm buildings on the farm. In any event, the said fences and gates, as also the roofs, floors, and windows of the farm dwelling-house, have become so dilapidated from ordinary tear and wear that the said fences and gates are practically of no use to the defenders, and the said dwelling-house is unfit for the ordinary and comfortable use of the defenders. The defenders have repeatedly called upon the pursuer to perform these obligations, and he has repeatedly promised to do so, but he has not yet fully fulfilled any of these obligations, and in consequence the defenders have suffered serious loss and damage in their use and occupation of the subjects let to them. They estimate the amount of that loss and damage at the sum of £50.… (Stat. 9) The pursuer has also in connection with the formation of the curling pond obstructed or stopped up a ditch at the east side of Cottown of Durie Field, and until a few weeks ago he dammed back the water upon the lands let, at same time bringing the field drains into a condition

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which prevented them from working and properly draining the fields. The result of this has been that a considerable portion of the field in question has been seriously damaged for cropping purposes by the operations of the pursuer, and the defenders claim that from his operations in this respect they have suffered loss and damage to the extent of £20, which they claim to be entitled to deduct from the sums in the present action.… (Stat. 10) The pursuer has also in connection with his building operations taken down and removed a w.c. upon the farm, which he refuses to replace. The defenders claim that in doing so he has deprived them of part of the subjects let to them, and that he is not entitled to claim the full rent of the farm until the said w.c. has been restored and replaced.” [The passage in italics was added at amendment mentioned infra.]

The defenders further averred that at various meetings between the parties the pursuer verbally agreed to all the defenders' requirements as hereinbefore condescended on; that they paid rent on the faith of this agreement; and that at one meeting, on 14th June 1907, the parties signed the following memorandum:—“We, Alexander and William Birrell, have handed to Mr Christie to-day deposit-receipt for £249, 17s. 5d. with the Royal Bank of Scotland, Leven, dated 12/11/06. This is handed to Mr Christie on the understanding that when he comes home we will meet and arrange our matters ourselves. …”

The defenders also averred (Stat. 20) that by letter dated 21st May 1909 addressed to the pursuer's agent they tabulated the claims which they made against the pursuer, and which he had undertaken to satisfy, as follows:—“1. The roof of Banbeath farm-house is in a very bad state, as it admits the rain, which has destroyed the ceilings, and considerable repairs must be done upon the roof. In like manner the floor in more than one of the rooms is rotten and must be substantially repaired or renewed, and none of the windows will either go up or down. 2. The roof lights and windows in the farm steading and granary all require to be repaired and reputtied. The door of the straw-house is also practically done and must be renewed.… 4. The gutters between the roofs of the steading appear to have subsided, but in any case they are not carrying off the water and must be repaired. 5. Mr Christie has done nothing towards repairing the fences and gates on the farm, and these, from ordinary tear and wear, are quite out of order.… 8. As you are aware, Mr Christie dammed back the water in the ditch on the east side of the Cottown of Durie field, with the result that a portion of land has been damaged and the drains choked. This must be put right and suitable compensation fixed. 9. Through Mr Christie's delay in cutting the hedges damage has been inflicted upon us which must be paid for, and in like manner he has failed to cut the overhanging branches of the trees, which has also damaged our field, and this must be settled for.… 11. Mr Christie also removed a w.c. from the steading, and it must be replaced.”

The defenders pleaded, inter alia — “(4) The pursuer having failed to implement and fulfil the obligations undertaken by him to the defenders, he is not entitled to sue for payment of rent until these obligations are fulfilled. (5) The defenders having suffered loss and damage to the amount condescended on through the failure of the pursuer to implement and fulfil his obligations to them, they are entitled to compensate and set against any rent due the amount of the damages claimed by them.”

On 15th November 1909 the Sheriff-Substitute ( Armour) repelled the defences as irrelevant and not sufficiently specific to be remitted to probation (subject to an allowance of proof with regard to another part of the action), found that the defenders had no right to retain rent past due in respect of their claims against the pursuer, and granted decree.

The defenders appealed to the Sheriff ( Macfarlane), who on 12th March 1910 pronounced an interlocutor allowing the record to be amended to the effect indicated supra, recalling the interlocutor of the Sheriff-Substitute, and allowing proof.

Note.—“… With regard to the rest of the case, I do not come to the same conclusion as the Sheriff-Substitute, though I agree with much of his reasoning. The action is in the main one for rent. The principal ground for refusing to pay it is that the landlord has failed to put the buildings and fences into a tenantable state of repair. There is of course an implied obligation on a landlord to do so at the entry of a tenant, but here the defenders, by the terms of the lease, relieved him of that obligation by accepting the buildings and fences as in sufficient tenantable condition and repair, and bind themselves to keep them in the like condition and repair, and so to leave them, ordinary tear and wear excepted. Accordingly the defenders' averments so far as contradictory of the lease would not in the ordinary case be a relevant defence, and in any event could only be proved by the writ or oath of the pursuer. Only so far as the fences and buildings are said to have become unfit for use from ordinary tear and wear are the averments relevant, and such a statement was added on amendment ( Johnston v. Hughan, 1894, 21 R. 777, 31 S.L.R. 655). But there are also statements by the defenders to the effect that at several meetings which they had with the pursuer, when they had refused to pay the rent due at the time, the pursuer had admitted his obligation to execute repairs both on the buildings and the fences, and had undertaken to execute them, and that in consequence of this admission and promise the rent had been paid. A writing is referred to under the hand of the pursuer and the defenders which, while it may not in terms bear out the defenders' statements, shows at least that some agreement had been arrived at with reference to the matter in dispute, and later on the hedges were put in order

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by the pursuer, in part fulfilment, according to the defenders, of the admission and undertaking. The pursuer's failure to carry out the agreement has on the defenders' averments resulted in damage to them to the extent of £50 quoad buildings and fences and £30 quoad hedges, sums which they claim to be entitled to deduct from the sums sued for. There are sundry other items of damage connected with the cot-houses, &c., mineral workings, damming of certain drains, and failure to restore a water-closet set forth by the defenders. No claim for damage is made with respect to certain ground said to have been resumed by the pursuer. Any claim in respect of that is reserved. Now undoubtedly all the averments to which I have referred as founding claims for damages are somewhat vague and indefinite, but on the whole I think that stated in a separate substantive action they would have been relevant to infer liability to pay compensation on the pursuer. The question is, Can they be maintained in this action. Under the old law and practice I do not think they could. I was referred, however, to the Sheriff Courts (Scotland) Act 1907, First Schedule, Rule 55, which is as follows:— [ The Sheriff quoted the rule, v. supra in rubric.] It appears to me that the language of that rule is wide enough to cover the counter claims for damages made by the defenders even in answer to a liquid claim for rent. The rule has been considered in the case of Macnab v. Nelson, 1909 S.C. 1102, 46 S.L.R. 817, and the conditions there held to be necessary for the application of the rule appear to me to be present here.”

The pursuer appealed, and argued—(1) The construction put by the Sheriff on Rule 55 of the First Schedule of the Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51) was too wide. The object of the rule was merely to simplify procedure and obviate multiplicity of actions. It was not intended to affect the right of a creditor in a liquid debt to instant decree, or make relevant an otherwise irrelevant defence, e.g., compensation founded on illiquid claims of damages. The question was the same as the question of conjunction, supposing the defenders had raised a counter-action, and that was always within the discretion of the Court — Mackay, Manual of Court of Session, p. 273. The case of Macnab v. Nelsons, 1909 S.C. 1102, 46 S.L.R. 817, was not inconsistent with this view. (2) The defences were clearly irrelevant. It was not every breach of a contract which brought the contract to an end. If the breach were of an immaterial part of the obligation, that only involved damages — Wade v. Waldon, 1909 SC 571, 46 S.L.R. 359. The question was whether the obligations of which breach was alleged were material or immaterial. In the first case the defenders would no doubt be entitled to retain the rent in whole or in part— M'Donald v. Kydd, June 14, 1901, 3 F. 923, 38 S.L.R. 697; Rankine, Law of Lease in Scotland, 2nd ed., pp. 302–3, 306, 308. In the latter case the breaches only resulted in damages, and such claims of damages could not be set off against the claim for rent— Bowie v. Duncan, 1807, Hume 839; Thomson v. Coventry, June 15, 1833, 11 S. 725; M'Rae v. M'Pherson, November 19, 1843, 6 D. 302; Dryborough v. Dryborough, May 21, 1874, 1 R. 909; Stewart v. Campbell, January 19, 1889, 16 R. 346, 26 S.L.R. 226; Sutherland v. Urquhart, December 13, 1895, 23 R. 284, 33 S.L.R. 210. In Lovie v. Baird's Trustees, July 5, 1895, 23 R. 1, 33 S.L.R. 208, the two claims were held to be equally liquid. The case of Johnston v. Hughan, May 22, 1894, 21 R. 777, 31 S.L.R. 655, did not deal with compensation at all. The breaches founded on by the defenders here were all breaches of immaterial obligations, some of which were not even contained in the lease, and they therefore only gave rise to illiquid claims of damages. In any event the averments of the defenders were irrelevant for want of specification.

Argued for the defenders (respondents) — (1) The wording of Rule 55 of the First Schedule of the Sheriff Courts (Scotland) Act 1907 was wide enough to allow such counter-claims as were made here to be dealt with in the action raised by the pursuer. The rule was imperative, and under it a good counter-claim was one that could be stated in money — Macnab v. Nelsons, cit. This view had been taken of a similar provision in England— Beddall v. Maitland, 1881, 17 Ch. Div. 174, at p. 181; Stooke v. Taylor, 1880, 5 Q.B.D. 569, at p. 582. (2) Apart from Rule 55, the defences were relevant. The pursuer's claim was only liquid if he had performed his obligations under the lease. He was in breach of these obligations, and his claim was no more liquid than the defenders' claims, and they were therefore entitled to set off their claims against the demand for rent — Lovie v. Baird's Trustees, cit. There was no distinction between material and immaterial obligations. Further, the pursuer's failure to make good ordinary tear and wear and put the premises in tenantable condition was a good answer pro tanto to his demand for rent— Johnston v. Hughan, cit. The defenders were entitled in view of the pursuer's breach of his obligations under the lease, his obligation to make good ordinary tear and wear, and the obligations he had specifically undertaken, either to retain the rent or compensate the demand for rent by their claims of damages in respect of these breaches. The averments of the defenders should therefore be remitted to probation.

At advising—