Scottish Court of Session Decisions

The Small Landholders (Scotland) Act 1911 (1 and 2 Geo. V, cap. 49) enacts—Section 2—“ Who to be Landholders—(1) In the Crofters Acts and this Act … the word ‘holding’ means and includes … (iii) as from the termination of the lease … every holding which at the commencement of this Act is held under a lease for a term longer than one year by a tenant who resides on or within two miles from the holding and by himself or his family cultivates the holding with or without hired labour (such tenant or his heir or successor, as the case may be, holding under the lease at the termination thereof being hereinafter referred to as a qualified leaseholder) … (2) in the Landholders Acts the word ‘landholder’ means and includes as from the respective dates above mentioned … every qualified leaseholder … and the successors of every such person in the holding being his heirs or legatees.” Section 13—“ Present Rent—The rent payable by a landholder as one of the statutory conditions shall be the present rent, that is to say, the yearly rent, including money and any prestations other than money … ( c) in the case of qualified leaseholders or statutory small tenants becoming landholders … payable or fixed in respect of the last year of the lease or tenancy.…” Section26—“ Supplementary Provisions and Restrictions—… (3) A person shall not be held an existing yearly tenant or a qualified leaseholder under this Act in respect of ( a) any land the present rent of which within the meaning of this Act exceeds fifty pounds in money.”

Thomas Duff Gordon Duff, of Drummuir, appellant, being dissatisfied with an order of the Scottish Land Court in an application by William Scott, tenant of Pickielaw, respondent, for an order fixing (1) a first equitable rent for, and (2) the period of renewal of his tenancy of, the said farm, presented a Special Case for the opinion of the Court of Session.

The lease of the farm was constituted by missives, endorsed under conditions of let, which were in the following terms—“Elgin, Fourth December Eighteen hundred and ninety-three.—I, Alexander Scott, merchant, Hopeman, hereby offer the sum of Fifty-one pounds of rent for a lease of the foregoing subjects for nineteen years, with a break at the option of either party at the end of seven years on six months' previous notice in writing. The cropping of the land to be left to myself, excepting that at the outgoing I shall leave it in a regular five-shift course.

Alexander Scott.

Alexander Anderson, of Fifty-four High Street, Elgin, Law Clerk, witness.

James Colin Murray, of Fifty-four High Street, Elgin, Law Clerk, witness.

Drummuir, Jan. 27, 1894.—I accept this offer by Alex. Scott.

Thomas Gordon Duff.”

The conditions of let contained, inter alia, the following provisions—“ First—The lands will be let for the period of nineteen years from the term of Whitsunday 1894, or for such period as may be agreed on, with entry to the houses at that term, and to the lands at the separation of the crop from the ground. Sixth—The rent to be agreed on shall be payable at Martinmas and Whitsunday by equal portions, excepting the rent of the last crop, which shall be payable in one sum at Martinmas after ingathering the crop. The first half-year's rent under this lease to be payable at the term of Martinmas 1895. The tenant to pay one-half the cost of insuring the buildings against fire. Ninth—The proprietor reserves power to resume possession of the small park in front of Hopeman Lodge to the east of the approach thereto on giving six months' notice of his intention to that effect, the tenant to receive a deduction from his rent at the valuation of two men mutually chosen, and by an oversman to be named by them in the event of their differing in opinion.”

The Case stated—“… 2. Answers to the said application were lodged for the proprietor. In said answers it was, inter alia, averred that the rent of the holding was at the commencement of the Small Landholders (Scotland) Act 1911 (1st April 1912) over £50 per annum, and it was accordingly maintained that the application was incompetent under section 26 (3) ( a) of the said Act of 1911. Proof was led on 14th May 1914, parties were heard, and the said farm was inspected by the Court on the same day.

3. At the commencement of the Small Landholders (Scotland) Act 1911 the said William Scott was, in succession to his father, tenant under the proprietor of the said farm upon missives of lease [ v. sup.].… The tenant paid 5s. 3d. of insurance annually. The said lease terminated by the running out of the stipulated term of endurance.

4. The area of said farm, both at the tenant's entry and after the resumption of the park in front of Hopeman Lodge after mentioned, exceeded 50 acres.

5. … In the end of November 1911 the proprietor intimated that he was to exercise the right of resumption, and in order to facilitate the work of additional ploughing and preparing the land for laying out as part of the policies of Hopeman Lodge, the proprietor subsequently arranged with the tenant to get, and did get, possession of the said park in the spring of 1912. The said park extends to between 4 and 5 acres of arable land, and is valued at 5s. per acre. The proprietor, by letter dated 10th January 1913, offered to give the tenant a reduction of £5 per annum off his rent during his tenancy under the lease in consideration of the proprietor resuming the said park. The offer was accepted by the tenant. Accordingly the tenant was allowed a reduction of £2, 10s. from the half-year's rent which he paid at Martinmas 1913 for the half-year Whitsunday to Martinmas 1912. The reduction of £5 per annum agreed to be allowed to the tenant as above stated included not only deduction from rent in respect of land resumed but also compensation to the tenant for unexhausted

Page: 623↓

manures, ploughing done by him, &c. The parties made no apportionment of the said allowance as between the various items covered by it. But the Court held that if such apportionment fell to be made the sum in respect of deduction of rent exceeded £1. The rent payable for crop and year 1912 was entered in the proprietor's rental books thus:—

To rent crop 1912	£51	5	3
Less allowance for half-year for field taken off	2	10	0
	£48	15	3

and was paid by the tenant in two sums, viz.—£20, 10s. on 6th June 1913, and the balance of £28 (with 5s. 3d. of insurance) on 12th December 1913. The receipts granted to the tenant therefor acknowledged receipt of the said sum of £20, 10s., ‘being to account of land rent for crop and year 1912,’ and of the said sum of £28, 5s. 3d., ‘being balance of land rent for crop and year 1912.’ The sum paid by the tenant for crop and year 1913 (being the last year of the stipulated term of endurance of the lease) was £46 (being £51 less the said deduction of £5).

6. The proprietor objected that the application was not competent, on the ground that the acreage being more than 50 acres, the rent of Pickielaw at the commencement of the Act of 1911 was over £50.”

On 13th November 1914 the Land Court issued the following order:—“… Having inspected the holding and resumed consideration of the application and the evidence adduced, find and declare that the applicant is a statutory small tenant within the meaning of the Small Landholders (Scotland) Act 1911 in and of the holding specified in the application, and that no ground of objection to him as tenant has been stated under section 32 (4) of the said Act: Therefore find that he is entitled, in virtue of the said section, to a renewal of his tenancy and to have an equitable rent fixed; and having considered all the circumstances of the case, holding, and district, including the condition and value of the improvements made by the applicant and respondent respectively or their predecessors in title, have determined and do hereby fix and determine the period of renewal at seven years, and the equitable annual rent payable during said period by the applicant at £35 sterling, each to run from the term of Whitsunday 1913: Find the applicant entitled to expenses, modify the same at three guineas, and decern for payment of the said sum against the respondent.—N. J. D. Kennedy; Alex. Dewar.”

Note.—“… The preliminary objection has been taken that the rent payable at 1st April 1912, the commencement of the Act, was £51, and therefore that this farm is not a holding under the Act of 1911 because of the disqualification in section 26 (3) ( a) of the Act of 1911.

Section 26 (3) ( a) provides that a person shall not be held an existing yearly tenant or a qualified leaseholder in respect of ‘any land the present rent of which within the meaning of this Act exceeds fifty pounds in money’ unless such land, exclusive of common pasture or grazing held therewith, does not exceed 50 acres.

This limitation is applied to statutory small tenants by sub section (10) of this section and section 32 (1) of the Act of 1911.

It is clear that if the rent had continued till the termination of the lease to be £51 this farm would not be a holding under the Act.

It is maintained for the proprietor that if at the commencement of the Act of 1911 (1st April 1912) the rent under a lease for a term of years exceeded £50 (the acreage exclusive of common pasture exceeding 50 acres), then the holding cannot be a holding under the Act in virtue of sub-section (3) ( a) of section 26 above quoted.

Now by section 2 (1) (iii) a holding held under lease at the commencement of the Act for a term longer than a year does not become a holding under the Act until the ‘termination of the lease’ (defined in section 31), as distinguished from the holding of a ‘tenant from year to year,’ which becomes a holding under the Act as from the commencement of the Act. The leaseholder, like the yearly tenant, must be resident and cultivating tenant at the commencement of the Act. No other condition relates to the commencement of the Act so far as the leaseholder is concerned. Further, he or his heir or successor must be the holder under the lease at the termination of the lease.

The question is, At what point of time is the rent under the lease to be ascertained for the purpose of determining whether the limitation enacted by section 26 (3) ( a) does not or does apply? That sub-section itself indicates the point of time by the words, ‘the present rent within the meaning of this Act.’

This refers us to section 13 of the Act of 1911, the only other section of the Act of 1911 in which this expression ‘present rent’ occurs. What under section 13 is the ‘present rent’ in the case of the yearly tenant and the leaseholder?

In the case of the existing yearly tenant present rent is defined as the rent ‘payable for the year current at the commencement of this Act,’ the date at which the Act if the statutory conditions are satisfied applies to the holding. In the case of qualified leaseholders present rent is defined as ‘the rent payable or fixed in respect of the last year of the lease,’ the end of the last year of the lease being the date at which if the statutory conditions are satisfied the Act applies to the holding. Changes in rent or extent either in the direction of increase or decrease may take place between the commencement of the Act and the termination of a lease which was in force at 1st April 1912.

Apart from the aid of section 13 in interpreting the meaning of sub-section (3) ( a) of section 26, the date at which the existence or non-existence of the disqualifications enacted by section 26 would naturally fall to be ascertained is the date at which unless some disqualification is established the leaseholder becomes entitled to exercise the rights conferred by the Act.

If, then, the present rent referred to in

Page: 624↓

sub-section (3) ( a) is in the case of the leaseholder the rent payable for the last year of the lease the ‘present rent’ of this holding was £46 and not £51. (We leave out of account for the purposes of this sub-section (3) ( a) the insurance premium of 5s. 3d., which is not ‘rent’ as has been decided.) Even if the rent payable for crop and year 1912 (the year current at the commencement of the Act) be taken, this deduction of £5 a-year in respect of the land resumed first began to be made from the rent payable for that crop and year to the extent of £2, 10s.

The rental books of the estate show that the rent payable for crop and year 1912 (the penultimate year of the lease) was £48,10s., being £51 less deduction for half-year in respect of the field resumed, viz., £2, 10s. The rent payable for crop and year 1913, the last year of the lease, was £46, being £51 less the deduction for the whole year in respect of the field resumed, viz., £5, which it had been agreed should take effect ‘during the remainder of the lease.’

Accordingly we repel the objection to the competency. …”

The questions of law were—“1. Were the Land Court entitled to hold that the conditions determining the right of the tenant to apply to the Land Court as a statutory small tenant under the Small Landholders (Scotland) Act 1911 fell to be ascertained as at the termination of the said lease? or 2. Were the Land Court bound to hold that the conditions determining the tenant's right fell to be ascertained as at the commencement of the Landholders (Scotland) Act 1911? 3. Were the Land Court entitled to hold that the rent of the tenant's holding was under £50, either ( a) at the date of the commencement of the Small Landholders (Scotland) Act 1911, or ( b) at the termination of the lease? 4. Were the Land Court entitled to fix the period of renewal and the payment of a first equitable rent as at and from Whitsunday 1913?”

Argued for the appellant—The application of the respondent was incompetent, as his “present rent” exceeded £50 per annum—Small Landholders (Scotland) Act 1911 (1 and 2 Geo. V, cap. 49), sec. 26 (3) ( a) and (10). The Act came into operation on 1st April 1912 (section 38), and the rent payable then for the last year of the lease was the criterion which fixed whether or not the tenant could appeal to that Act— Clyne v. Sharp's Trustees, 1913 S.C. 907, per Lord President Dunedin at p. 912, and Lord Mackenzie at p. 916, 50 S.L.R. 688. This construction of the Act was preferable to that adopted by the Land Court and the respondent, for it fixed the tenant once and for all, as from 1st April 1912, with the knowledge of whether or not he was within the class favoured by the Act, and it was consistent with the general policy of the Act as expressed in sections 2 and 26 (6). Section 13 did not define “present rent,” but in refereence to the Crofters Holding (Scotland) Act 1886 (49 and 50 Vict. cap. 29), sec. 1, which gave rent as one of the statutory conditions showed what items it included. But in any event section 13 ( c) was not incompatible with the appellant's contention, for “fixed” referred to fixation under the Crofters Holding (Scotland) Act 1886, sec. 6, and “payable” meant fixed in terms of the lease, at the date when the Small Landholders (Scotland) Act 1911 came into operation, as the rent for the last year of the tenancy, so that a subsequent reduction of the rent would not vest the tenant with a right which he did not possess at the date when the Act came into operation, and a subsequent increase of the rent would not divest him of a right which he had then. If so the application was incompetent, as the deduction for resumption of land did not come into operation till after 1st April 1912.

Argued for the respondent—The question of qualification under the Small Landholders (Scotland) Act 1911 depended for its solution on whether or not the rent actually paid by the tenant in the last year of his lease was less than £50. If it was less than £50 the tenant could appeal to the Act, and here the rent was less than £50. The dicta in Clyne's case ( cit.) were obiter, and when applied to the present question were inconsistent with the Act. The crucial point of time was the termination of the lease—section 2 (iii) as contrasted with section 2 (i) and (ii). The “present rent” was referred to the last year of the lease by section 13 ( c), which was the only section dealing with present rent. There was no inconvenience in this, for if the tenant was qualified at 1st April 1912 he could not therefore lose his qualification without being aware of what was happening—Counsel for the respondent intimated that he did not contend that the rent payable when the Small Landholders (Scotland) Act came into operation was less than £50, or that the equitable rent should run from Whitsunday 1913.

At advising—