Scottish Sheriff Court Decisions

2014SCLERW 12

SHERIFFDOM OF GRAMPIAN, HIGHLAND AND ISLANDS AT LERWICK

Judgment

Of

Sheriff Philip Mann

In Summary Application

By

Shetland Islands Council, 8 North Ness, Lerwick, Shetland, ZE1 0LZ

Applicant

Against

Martin Fisher, 4 Hayhoull Place, Bigton, Shetland, ZE2 9GA

Respondent

Lerwick 30 May 2014

The sheriff, having resumed consideration of the cause, dismisses the application as incompetent, reserves meantime the question of expenses and appoints parties to be heard thereon, if so advised, on 24 June 2014 at 10:00 am within the Sheriff Court, King Erik Street, Lerwick.

Sheriff Philip Mann

Note

1.         Introduction

1.1       This is a summary application by Shetland Islands Council seeking to vary the terms of a Scottish Secure Tenancy Agreement with the respondent in terms of section 26 of the Housing (Scotland) Act 2001.  In particular, the application seeks the removal of clause 1.6 of the agreement.

1.2       Clause 1.6 of the agreement is in the following terms:

“The service charge is £14.45 every week, payable fortnightly in advance by you on or before the first day of each rental period.  The service charges are detailed in an attached appendix.”

1.3       A warrant for service was granted on 5 March 2014 with a first diet assigned for 29 April 2014.  When the case called on 29 April 2014 the respondent appeared in person.  On that date I queried with the applicants’ agent whether or not the application was competent, given that clause 1.6 of the agreement was a term relating to a service charge payable by the tenant, this being a term which on the wording of section 26(3) of the Act appeared not to be capable of being varied by the court.  I assigned a hearing for 27 May 2014 to allow parties to address me on this question of competency.

1.4       On 27 May 2014 the respondent was neither present nor represented.  He had telephoned the sheriff clerk that morning to advise that he was unwell.  In order to avoid delay I elected to hear the applicants’ solicitor, Mr Adam, on the basis that if I were to take a preliminary view that the application was competent I would fix a further hearing to allow the respondent to address me.  Mr Adam helpfully provided me with a written note of his submissions. Having heard Mr Adam briefly in amplification of his written note I made avizandum.

2.         The Applicants’ Submissions

2.1       Mr Adam drew my attention to sections 24 to 26 of the Housing (Scotland) Act 2001 which, so far as relevant to this application, are in the following terms:

     “24  Restriction on Variation of Tenancy

(1) Despite anything in the tenancy agreement, the terms of a Scottish secure tenancy may not be varied except—

       (a) by written agreement between the landlord and the tenant, or

(b) under section 25 or 26.

25  Increase in Rent or Charges

(1) The landlord under a Scottish secure tenancy may increase the rent or any other charge payable under the tenancy by giving the tenant notice of the increase not less than 4 weeks before the beginning of any rental period (or any earlier day on which the payment of rent in respect of that period falls to be made).

26  Variation of Tenancy by Court Order

(1) Where the landlord under a Scottish secure tenancy wishes to vary the terms or conditions of the tenancy, but the tenant refuses or fails to agree the variation, the landlord may raise proceedings by summary application.

(2) ………..

(3) In proceedings under subsection (1) or (2) the court may make such order varying any term of the tenancy (other than a term relating to the amount of rent or of any other charge payable by the tenant) as it considers reasonable in all the circumstances, having particular regard to—

(a) the safety of any person, and

(b) any likelihood of damage to the house or to any premises of which it forms part.

2.2     Mr Adam’s argument was that the applicants wanted to decrease the amount payable by the respondent by removing clause 1.6 from the tenancy agreement.  Section 25, in terms, only applied in the event of the applicants wishing to increase the amount.  Therefore, the applicants could not invoke section 25 to achieve the desired result.  Their only avenue was to apply to the court for a variation in terms of section 26.

2.3     Mr Adam acknowledged that clause 1.6 of the tenancy agreement related to a charge payable by the tenant and that the wording of section 26(3) appeared to say that the court could not vary such a term.  However, he argued that the section does not state that the court shall not make an order relating to the amount of rent or of any other charge.  Parliament could have so enacted had that been in mind but it had clearly chosen not to.  Had that been in the Act, the applicants’ position would have been quite different.  Rather, the proper reading and the true intent of the section was to direct the Court’s attention to matters which may be taken into account when considering an application to vary the terms of a tenancy other than those relating to rent or other charges.  Mr Adam maintained that there would be no need for such matters to be taken into account where changes in rent or charges were applied for, in respect that these are not likely to have an impact on the safety of any person or cause damage to the subjects of the lease or any property of which it forms part in the same way as would be conceivable with changes to other terms.

3       Discussion and Decision

3.1    I do not accept Mr Adam’s submissions.  On a proper grammatical construction of section 26(3) of the Act the words in parentheses and their placement in the clause have the effect of excluding from the terms which the court may vary any term relating to the amount of rent or of any other charge payable by the tenant.  To have the effect contended for by Mr Adam the section would need to be recast to read something like:

“In proceedings under subsection (1) or (2) the court may make such order varying any term of the tenancy as it considers reasonable in all the circumstances, in the case of a term other than a term relating to the amount of rent or of any other charge payable by the tenant having particular regard ……”

Whichever of the two interpretations, Mr Adam’s or mine, one might adopt it is the case that there would be no need for such matters to be taken into account where changes in rent or charges are concerned, so there is no support for Mr Adam’s interpretation there.

3.2    Neither is there any support for Mr Adam’s argument to be found in the fact that section 25 relates only to increases in rent or other charges payable by the tenant.  Section 25 is framed in the way it is because it is unthinkable that a tenant would object to the applicants unilaterally reducing the charges payable by the tenant.  The power contained in section 25 is required because it relates to a change which operates to the prejudice of the tenant and to which one would expect the tenant not to agree without statutory compulsion.

3.3    Purely and simply, on the interpretation of section 26(3) which I prefer the court cannot give the applicants the remedy that they seek.  For that reason the application is incompetent.  If the respondent were to consent to the applicants’ proposal the application would be unnecessary.  I have resolved to dismiss the application without calling upon the respondent to address me.

3.4    I cannot leave this matter without making some further comment on the application and the circumstances giving rise to it.  If the applicants truly wished to reduce the charges payable by the respondent they could simply have undertaken to him that they would no longer rely on clause 1.6 of the tenancy agreement.  But it is perfectly clear from the terms of the application that that is not what this is all about. 

3.5    It is explained in the application that the “service charge” referred to in clause 1.6 of the tenancy agreement equates to the net amount which the tenant is expected to pay for electricity charges paid on his behalf by the applicants after receipt by them of a subsidy from a charitable trust.  It is further explained that that subsidy has been withdrawn and that the applicants have changed their policy.  What the applicants seek to achieve is that clause 1.6 will be removed and that henceforth the respondent will pay the full electricity charges direct to the electricity supplier.  The net result of what the applicants are seeking to do is to put the respondent into the position where he will be paying more, not less.  It is disingenuous to suggest otherwise.

3.6    The application goes on to explain that if clause 1.6 of the tenancy agreement is not removed then the respondent will be worse off because the applicants will then invoke section 25 of the Act to increase the service charge to cover the true cost of electricity paid by the applicants on the respondent’s behalf together with an administration charge.  I express no view as to whether or not that would be a legitimate move on the part of the applicants given what is explained in the application but that is the route they should go down if they consider it to be both legitimate and appropriate.  Whether or not the respondent would have any grounds for opposing such a move I do not know.  It is not something that I am called upon to consider in relation to this application.  It may be something that will tax me at some future date.

4.      Expenses

4.1    I have not been addressed on the question of expenses.  I do not know if the respondent will have incurred any expense in relation to this matter but it would be wrong to dispose of the question without giving him an opportunity to make submissions.  I have, therefore, fixed a hearing on expenses.