Scottish Court of Session Decisions

John Haig & Company, Limited, distillers, Markinch, who were heritably vested in certain subjects in Glasgow, pursuers, brought an action in the Sheriff Court at Glasgow against Gordon Houston Boswall Preston and Alistair Houston Boswall Preston, sole partners of and trading under the firm name of The Central Motor Engineering Company, 51 Pitt Street, Glasgow, defenders, for sequestration of defenders' effects within said above-described premises in security and for payment of rent, interest, and expenses, for payment of past due rents, for an order to replenish, and failing implement, for warrant to eject.

The defenders pleaded, inter alia—“(1) In respect that the defenders have not got possession of the entire subjects let to them under said lease they are entitled to retain the rent now sued for until such possession is given them. (2) The pursuers having failed to implement their obligations under the lease are not entitled to insist on the performance by the defenders of the counter art of these obligations. (3) The defenders being entitled to retain the half-year's rent until the pursuers have fulfilled their obligations under the lease by putting the premises into the condition in which the pursuers contracted to put them the defenders are entitled to absolvitor.”

The facts are given in the note of the Sheriff-Substitute ( Boyd), who on 22nd January 1913 allowed a proof before answer, and on 5th April 1913, after proof led, pronounced the following interlocutor:—“Finds the pursuers are owners and the defenders are tenants of premises, in terms of the minute of lease and minute of adoption, whereby the pursuers bound themselves to do ‘needful repairs to the roof which is presently leaking,’ and to keep the premises wind and water tight; that the pursuers failed to sufficiently perform this obligation in spite of reasonable complaints by the defenders, and the defenders retained the half-year's rent due at 11th November 1912 on the ground that full possession of the subjects let had not been given to them: Finds that the defenders were entitled so to do until the pursuers shall fulfil the obligation under the lease: Therefore assoilzies the defenders from the conclusion of the action.”

Note.—“The pursuers are whisky distillers and owners of licensed premises in Glasgow and elsewhere. They are owners and the defenders are tenants of a workshop, office, and store in Pitt Street, Glasgow, which is used as a motor garage, and this is an action of sequestration for rent of the premises due 11th November 1912.

The defence is that entire possession of the subjects was not given, and that the defenders were entitled to retain the rent sued for.

The defenders entered into a minute of agreement with John Dove on 28th March and 22nd April 1911, and acquired the tenants' rights under the current lease of the subjects of this action from Candlemas 1911 till Whitsunday 1915, with a break to the defenders at Whitsunday 1912, which they did not exercise. The rent was £97, 10s. a year till Whitsunday 1912, and £80 a year for the three succeeding years. The minute was executed by the defenders, but not by John Dove, as he died on 10th April 1911. The minute provided, inter alia, that ‘The second parties accept the premises let as in good tenantable repair subject to the first party repairing the broken glass and doing needful repairs to the roof which is presently leaking, and bind themselves to maintain and leave them in the like good

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condition at the termination of the let, ordinary tear and wear excepted, the first party being bound to keep the premises wind and water tight and the drains outside the premises in good condition.’

The pursuers became proprietors of the premises and gave their consent to the minute of lease by a supplementary lease executed by the parties in August 1911.

[The supplementary minute of agreement contained the following clause—“ First. The first parties hereby for all right competent to them homologate qua heritable creditors in possession the granting of the minute of agreement of lease before written.”]

“The defenders maintain that the pursuers failed to implement the obligations undertaken by them regarding the roof in spite of the defenders repeated complaints, and that in consequence the subjects were not fit for the purposes let from the beginning of the lease, and the defenders have not been in possession and have suffered damage. Accordingly they retained the rent at Martinmas 1912. The defenders consigned the amount of the half-year's rent and insurance payable by them—£43, 7s. 3d.—in bank in the joint names of the pursuers' agent and the defenders' agent and identified this as the rent and insurance in question. The pursuers in spite of this applied for and obtained sequestration on 29th November 1912. On the 30th November 1912 the defenders consigned the additional sum of £80, the amount of the whole year's rent, in the hands of the Clerk of Court, and the sequestration was recalled.

The question is whether the pursuers failed to perform the obligations they had undertaken.

To start with, the landlord admitted in March 1911 that the roof was leaking, and this same view was adopted in August 1911. The pursuers agreed to make the roof secure, and afterwards to keep it secure. There is no evidence that at the outset the pursuers proceeded to put the roof into proper repair. They led much evidence to show that repairs were done whenever complaints were made, and contended that that was enough to discharge their liability. I think there were many complaints by the defenders of the leaking nature of the roof, and also several repairs by the pursuers. But even assuming that the particular defect was remedied at the time, I do not think the roof was ever put into a sound condition and kept in that state, as the pursuers had undertaken to do. I think it was in a very bad state. [ His Lordship discussed the evidence. ]

I thought these witnesses were all credible persons, and the general result of their evidence is that during the currency of the lease the premises have never been wind and water tight in spite of the repairs executed by the pursuers.

There is no better expert evidence to be obtained in Glasgow than that of Robert C. Boyce, C.E., James M'Gown, plumber, and William M'Neil, builder, in their several departments. The result of their reports is that the premises are in such a state of dilapidation and decay that they are not fit for the purpose for which they were let. [ His Lordship further discussed the evidence.]”

I think the question of the case is simple. The landlord's obligation was to make and keep the roof sound. There were many complaints by the tenants, and a considerable number of repairs by the landlord, but I do not think these were sufficient radically or made the roof sound.

There is evidence that the defenders warned the pursuers that they would retain the rent.”

The pursuers appealed to the Sheriff ( Gardiner Millar), who on 25th July 1913 pronounced this interlocutor—“Recals the interlocutor of 5th April 1913: Finds in fact that the defenders entered into an agreement with the deceased John Dove, during the month of March 1911, whereby they acquired the tenants’ rights under the current lease of the subjects of this action, from Candlemas 1911 to Whitsunday 1915, with a break to the defenders at Whitsunday 1912, at a rent of £97, 10s. for the period from the date of their entry to Whitsunday 1912, and £80 a-year for the three succeeding years; that the agreement was embodied in a minute executed by the defenders but not by John Dove, as he had died on the 10th of April 1911: Finds that by the proposed minute it is provided that ‘the second party accept the premises let as in good tenantable repair, subject to the first party repairing the broken glass and doing needful repairs to the roof which is presently leaking, and bind themselves to maintain and leave them in the like good condition at the termination of the let, ordinary tear and wear excepted, the first party being bound to keep the premises wind and water tight and the drains outside the premises in good condition:'Finds that the pursuers thereafter became proprietors of the premises and entered into a minute of lease with the defenders, in the month of August 1911, whereby they let to the defenders the premises under the same conditions and with the same term of entry and ish as in the proposed minute of lease between the defenders and the said John Dove: Finds that the defenders have failed to prove that at the beginning of the term of lease the landlords did not carry out the express obligation to repair the broken glass and do needful repairs to the roof: Finds that on several occasions defects became apparent in the roof, and that the pursuers, when called upon, executed repairs, but that at no time did these defects interfere with the beneficial use of the premises by the defenders to any serious extent: Finds in law that the defenders, not having been deprived of the beneficial use of the premises to any serious extent, are not entitled to retain the rent due by them at Martinmas 1912: Therefore, reserving any claim of damage they may have in respect of these defects, decerns against the defenders for payment to the pursuers of the sum of £40 sterling, in terms of the first conclusion of the action: Grants warrant to the Clerk of Court to pay said

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sum of £40 to the pursuers out of the consigned money in implement of the above decree, and to pay the balance thereof to the defenders.” …

“ Note.—I think the effect of the minute of lease entered into between the parties in August 1911 was to place them in the same position as if the pursuers had been parties to the original agreement with the deceased Mr Dove. The defenders had already entered into possession of the premises, and the pursuers took over all the obligations, and placed themselves in the same position as if the minute of lease of August had been granted in the month of March 1911. It is agreed that the premises let were old, and it seems to me that the defenders must have known, when they entered into this lease, that defects would more probably arise than in premises that had been recently erected.

The defenders maintain that the pursuers were in breach of both the obligations in the lease, namely, the one to repair the broken glass and to do the needful repairs to the roof, which was leaking at the period of entry, and (second) the continuing obligation on the landlords to keep the premises wind and water tight. With regard to the first obligation, both the defender Alistair Preston and their clerk Miss Jane Swan, who seems to have taken a prominent part in the proceedings, admit that the glass in the roof was repaired, and that certain repairs were done to other parts of it where it was defective. There is no proof that the defenders ever called upon the pursuers when the lease of August 1911 was entered into to carry out this obligation, and the defenders remained in possession of the premises and paid rent therefor for two of the succeeding terms. They further did not take advantage of the break in the lease at Whitsunday 1912. It seems to me therefore that the defenders cannot maintain that the pursuers failed to carry out their obligation to repair the glass and the roof at the beginning of the lease.

With regard to the continuing obligation of maintaining the premises wind and water tight, it clearly appears from the evidence that on several occasions the roof was defective, and that rain did enter in sufficient quantities as to cause pools of water on the floor of the garage. There is evidence that complaints were made to the pursuers or their factor, and that these complaints were attended to and repairs made. I can find in the evidence of Alister Preston and Miss Swan no distinct evidence that on any one occasion any complaint was made of a serious defect which resulted in flooding of the premises which they say was not attended to by the pursuers. All the parties agree that the premises were old, indeed Alistair Preston says—‘I knew this property was an old one, and I was anxious to have the premises as a motor garage.’ The expert evidence for the defenders goes to this, that what should be done in order to put the premises in what they consider good repair would be that the premises should be pulled down and rebuilt altogether. But the taking down and rebuilding of the premises was not the obligation that was undertaken by the landlords in the lease, and this evidence throws a light upon the evidence given by the defenders' experts. The evidence of Alister Preston and Miss Swan is to the effect that frequent complaints were made of defects in the roof and the windows, of burst pipes, and of defects in the w.-c. The answer of the pursuers is that on every one of these occasions instructions were given at once to competent tradesmen, and their accounts are produced as showing the work that was done.

Upon these facts the question arises, Are the defenders entitled to retain the rent due to their landlords at Martinmas 1912? I can find no case where a tenant was entitled to retain his rent on the ground that a landlord had failed to repair a defect which emerged subsequent to the entry of the tenant. Counsel argued that the obligation to maintain the premises wind and water tight was equally binding with any obligation to put the premises right at the beginning of the lease. I am not prepared to say that this is not so; it seems to me that the tenant would then have to prove that the defect upon which he founded was so serious as to deprive him of the beneficial use of the premises, and that he had called upon his landlord to remedy it and that this had not been done. The tenant may have a claim against the landlord for damages for failure to repair any less serious defect, but then, of course, such an illiquid claim of damage could not be set against the landlord's claim for past due rent. As the defenders may be able to prove that they have such a claim I have reserved their right to it in granting decree; but they certainly in my view have not set forth that they have been deprived of the beneficial use of the premises to such an extent as to justify them in retaining the rent which is now past due.

Counsel for the pursuers intimated that they did not insist upon their claim for anything more than £40 due at Martinmas 1912, and I have only given decree for it.”

The defenders appealed to the Second Division of the Court of Session, and argued—The action was incompetent. It was an action for sequestration for rent, which in the circumstances ought never to have been brought— M'Leod v. M'Leod, February 11, 1829, 7 S. 396; Cumming and Others (Tennant's Trustees) v. Maxwell, March 2, 1880, 17 S.L.R. 463; Guthrie v. Shearer, November 13, 1873, 1 R. 181, 11 S.L.R. 70. Moreover, it was incompetent, in respect that the defenders had consigned the rent— Oswald v. Graeme, June 26, 1851, 13 D. 1229; Stewart on Diligence, p. 778. Even if it was competent, the defenders' contention that they were entitled to retain the rent should be sustained. By the supplementary minute of agreement the pursuers had homologated the original agreement between the landlord and the defenders contained in the earlier deed, and had established the engagement, not merely from the date of homologation, but from the beginning—Bell's Prin., sec. 27. In accordance with the terms of

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that engagement the pursuers bound themselves to execute certain needful repairs, an initial obligation which they had not fulfilled up to the date of the proof. The onus was on the pursuers to show that they had done so, and they had failed to prove it. The evidence showed also that they had failed to keep the premises wind and water tight. Breach of any obligation inter naturalia of a lease was a good ground for refusal by the tenant to pay the rent. If it were otherwise a party who broke a contract would be entitled to insist on the other party's fulfilling it, and to contend that the only remedy open to the other party was an action of damages. It was unnecessary for the defenders to counter-claim— Earl of Galloway v. M'Connell, 1911 S.C. 846, per Lord Dundas at 851, 48 S.L.R. 751, at 754; Macnab v. Nelson, 1909 S.C. 1102, per Lord President (Dunedin) at 1109, 46 S.L.R. 817, at 822; Scottish Heritable Security Company v. Granger, January 28, 1881, 8 R. 459, per Lord Young at 465, 18 S.L.R. 280, at 282; Rankine on Leases (2nd ed.), p. 230. In M'Donald v. Kydd, June 14, 1901, 3 F. 923, 38 S.L.R. 697, where the action was dismissed, there was no counter-claim. Whether the defenders had or had not made complaints to the pursuers about the state of the premises was an irrelevant consideration. It was a consideration which was only relevant in a case where the credibility of the witnesses was doubtful, and only in so far as it bore on the question of their credibility.

Argued for the respondents—The action was competent. Whenever a term of payment was passed without the rent being paid a landlord was entitled to sue not only for past-due rent but also for accruing rent, but although the pursuers were entitled to get decree in terms of the crave in the initial writ. the present action had throughout been really an action to enforce the pursuers' right to uplift £40 out of the £80 which had been consigned. By the clause of homologation the pursuers were only bound by the contract in the original lease in so far as it had not been executed in August 1911, when they homologated the original lease—Bell's Prin. ( cit). The supplementary minute of agreement was not a new lease, but only a taking up of the obligations under the old lease. Therefore although the pursuers were bound to keep the premises wind and water tight—an obligation which the evidence showed they had fulfilled—they were not bound by the initial obligation to put the premises into tenantable repair, because the defenders had already accepted them as such. Moreover, the defenders had paid the rent when it fell due at the two previous terms. During the whole of the period for which the rent was outstanding the defenders had had the possession of the subjects which they had contracted to get. Accordingly they were not entitled to retain the rent— Webster v. Brown, May 12, 1892, 19 R. 765, 29 S.L.R. 631. Even if the pursuers were bound by the initial obligation to put the premises into tenantable repair, the evidence showed that they had done so. Aland-lord was bound to repair only such defects as were brought to his notice— Hampton v. Galloway & Sykes, January 31, 1899, 1 F. 501, per Lord Trayner at 507, 36 S.L.R. 372, at 376; Wolfson v. Forrester, 1910 S.C. 675, per Lord President (Dunedin) at 680, 47 S.L.R. 525, at 528; Dickie v. Amicable Property Investment Building Society, 1911 S.C. 1079, per Lord Skerrington at 1085, 48 S.L.R. 892, at 895—and there was no evidence that the pursuers had failed to attend to any complaints made to them by the defenders. In any event there was no evidence as to the damage which the defenders alleged they had suffered, and therefore the defence was irrelevant— Christie v. Birrells, 1910 S.C. 986, 47 S.L.R. 853; Baikie v. Wordie's Trustees, July 14, 1897, 24 R. 1098, 34 S.L.R. 818; Stewart v. Campbell, January 19, 1889, 16 R. 346, 26 S.L.R. 226; Rankine on Leases (2nd ed.), p. 306. In any event the defenders were not entitled to decree of absolvitor, but only to decree of dismissal.

At advising—