Scottish Sheriff Court Decisions

SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH

 

[2016] SC EDIN 42

SD866/15

JUDGMENT OF SHERIFF KATHRINE EC MACKIE

 

In the cause

 

THE CITY OF EDINBURGH COUNCIL

1 Cockburn Street, Edinburgh, EH1 1ZJ

 

Pursuer;

 

Against

 

MR MARTIN SMITH

14 3F2 Springwell Place, Edinburgh, EH11 2JA

Defender:

 

Act:   Sutherland, Advocate, instructed by Gateley (Scotland) LLP Glasgow

Alt:  

 

Edinburgh      April 2016

 

 

The Sheriff having resumed consideration of the cause and having found that a further contractual tenancy is in existence between the parties dismisses the action and finds no expenses due to or by either party.

 

Introduction

[1]        In this Summary Cause action the pursuers crave recovery of possession of the property at 14 3F2 Springwell Place Edinburgh (the property) and decree for payment of arrears of rent in the sum of £809.25.  The summons was served upon the defender by Sheriff Officers on 24^th August 2014.  No form of response was lodged.  When the case called on 16^th October 2015 I was advised that an agreement had been reached with the defender whereby he would remain in occupation of the property upon payment of an agreed sum.  The pursuers did not seek decree against the defender but moved to adjourn the case to a later date.  In these circumstances I invited the pursuers’ agent to address me more fully on the nature of the agreement between the parties.  A hearing took place on 26^th October 2015.

 

The Pursuers’ Statement of Claim

[2]        The pursuers aver that on 6^th May 2010 they agreed to let the property to the defender in terms of a Short Scottish Secure Tenancy Agreement (SSST).  The initial period of the lease was six months and thereafter the lease was renewed on a month to month basis.  A notice to quit was delivered to the defender by one of the pursuers’ managing agents on 2^nd December 2014 requiring him to remove by 11^th February 2015.  On the same date a notice of intention to raise proceedings for possession was served in terms of section 36(3) of the Housing (Scotland) Act 2001 (the 2001 Act).  The pursuers further aver that the tenancy reached its ish on 11^th February 2015, that tacit relocation is not operating and that no further contractual tenancy is in existence.  In these circumstances the pursuers aver that the court must grant decree and make an order for recovery of possession.  The pursuers also aver that the tenancy terminated on 11^th February 2015 (sic) and that the defender has accrued arrears of rent of £809.25 for which they crave decree for payment.

Relevant Legislation

[3]        Section 34 of the 2001 Act provides

(1)A tenancy of a house is a short Scottish secure tenancy if—

 

(a)it would have been a Scottish secure tenancy but for this section,

(b)it is for a term of not less than 6 months, and

(c)before its creation, the prospective landlord serves on the prospective tenant a notice under subsection (4).

(2)A prospective landlord may serve a notice under subsection (4) only where any of the paragraphs of schedule 6 is satisfied.

(3)The Scottish Ministers may by order modify that schedule.

(4)A notice under this subsection—

(a)must be in such form as the Scottish Ministers may prescribe by regulations,

(b)must state that the tenancy to which it relates is to be a short Scottish secure tenancy and specify the paragraph of that schedule which is satisfied in relation to it, and

(c)must specify the term of the tenancy.

(5)At the ish of the tenancy it may continue—

(a)by tacit relocation, or

(b)by express agreement,

and the continued tenancy is a short Scottish secure tenancy despite subsection (1) not being satisfied.

 

Section 36 of the 2001 Act provides

 

(1)The landlord under a short Scottish secure tenancy may raise proceedings by way of summary cause for recovery of possession of the house which is the subject of the tenancy.

(2)Such proceedings may not be raised unless—

(a)the landlord has served on the tenant a notice complying with subsection (3),

(b)the proceedings are raised on or after the date specified in the notice, and

(c)the notice is in force at the time when the proceedings are raised.

(3)A notice under subsection (2) must be in such form as the Scottish Ministers may prescribe by regulations, and must—

(a)state that the landlord requires possession of the house,

(b)specify a date, not earlier than—

(i)2 months, or such longer period as the tenancy agreement may provide, from the date of service of the notice, or

(ii)the date on which the tenancy could have been brought to an end by a notice to quit had it not been a short Scottish secure tenancy,

whichever is later, on or after which the landlord may raise proceedings for recovery of possession.

(4)A notice under subsection (2) ceases to be in force 6 months after the date specified in it in accordance with subsection (3)(b) or when it is withdrawn by the landlord, whichever is earlier.

(5)The court must make an order for recovery of possession if it appears to the court that—

(a)the tenancy has reached the ish referred to in section 34(5),

(b)tacit relocation is not operating,

(c)no further contractual tenancy (whether or not a short Scottish secure tenancy) is in existence, and

(d)subsection (2) has been complied with.

(6)An order under subsection (5) must appoint a date for recovery of possession and has the effect of—

(a)terminating the tenancy, and

(b)giving the landlord the right to recover possession of the house,

at that date.

(6A)where a landlord raises proceedings under this section the landlord must give notice of the raising of the proceedings to the local authority in whose area the house in question is situated unless the landlord is that local authority.

(6B)notice under subsection (6A) is to be given in the form and manner prescribed under section 11(3) of the Homelessness etc (Scotland) Act 2003

(7)This section is without prejudice to sections 14 and 16.

 

Section 14 of the 2001 Act provides

 

(1)The landlord under a Scottish secure tenancy may raise proceedings by way of summary cause for recovery of possession of the house.

(2)Such proceedings may not be raised unless—

(a)the landlord has served on the tenant and any qualifying occupier a notice complying with subsection (4),

(b)the proceedings are raised on or after the date specified in the notice, and

(c)the notice is in force at the time when the proceedings are raised.

(3)Before serving a notice under subsection (2) the landlord must make such inquiries as may be necessary to establish so far as is reasonably practicable whether there are any qualifying occupiers of the house and, if so, their identities.

(4)A notice under subsection (2) must be in such form as the Scottish Ministers may prescribe by regulations, and must specify—

(a)the ground, being a ground set out in Part 1 of schedule 2, on which proceedings for recovery of possession are to be raised, and

(b)a date, not earlier than—

(i)4 weeks from the date of service of the notice, or

(ii)the date on which the tenancy could have been brought to an end by a notice to quit had it not been a Scottish secure tenancy,

whichever is later, on or after which the landlord may raise proceedings for recovery of possession.

(5)A notice under subsection (2) ceases to be in force 6 months after the date specified in it in accordance with subsection (4)(b) or when it is withdrawn by the landlord, whichever is earlier.

(6)In this section and section 15, “qualifying occupier” means a person who occupies the house as that person’s only or principal home and who is—

(a)a member of the tenant’s family aged at least 16 years,

(b)a person to whom the tenant has, with the landlord’s consent under section 32(1), assigned, sublet or otherwise given up possession of the house or any part of it, or

(c)a person whom the tenant has, with such consent, taken in as a lodger.

 

Section 16 provides

 (1) The court may, as it thinks fit, adjourn proceedings under section 14 on a ground set out in any of paragraphs 1 to 7 and 15 of schedule 2 for a period or periods, with or without imposing conditions as to payment of outstanding rent or otherwise.

(2) Subject to subsection (1), in proceedings under section 14 the court must make an order for recovery of possession if it appears to the court—

(a) that—

(i) the landlord has a ground for recovery of possession set out in any of paragraphs 1 to 7 of that schedule and specified in the notice required by section 14, and

(ii) it is reasonable to make the order,

(b) that—

(i) the landlord has a ground for recovery of possession set out in any of paragraphs 8 to 14 of that schedule and so specified, and

(ii) other suitable accommodation will be available for the tenant when the order takes effect, or

(c) that—

(i) the landlord has a ground for recovery of possession set out in paragraph 15 of that schedule and so specified,

(ii) it is reasonable to make the order, and

(iii) other suitable accommodation will be available for the tenant when the order takes effect.

(3) For the purposes of subsection (2)(a)(ii) the court is to have regard, in particular, to—

(a) the nature, frequency and duration of—

(i) where the ground for recovery of possession is one set out in any of paragraphs 1 and 3 to 7 of schedule 2, the conduct taken into account by the court in concluding that the ground is established,

(ii) where the ground for recovery of possession is that set out in paragraph 2 of that schedule, the conduct in respect of which the person in question was convicted,

(b) the extent to which that conduct is or was conduct of, or a consequence of acts or omissions of, persons other than the tenant,

(c) the effect which that conduct has had, is having and is likely to have on any person other than the tenant, and

(d) any action taken by the landlord, before raising the proceedings, with a view to securing the cessation of that conduct.

(4) Part 2 of schedule 2 has effect to determine whether accommodation is suitable for the purposes of subsection (2)(b) or (c).

(5) An order under subsection (2) must appoint a date for recovery of possession and has the effect of—

(a) terminating the tenancy, and

(b) giving the landlord the right to recover possession of the house,

at that date.

(5A) Where an order is made under subsection (2) in proceedings under section 14 on the ground that rent lawfully due from the tenant has not been paid (as set out in paragraph 1 of schedule 2) or on grounds including that ground—

(a) subsection (5)(a) does not apply,

(b) the tenancy is terminated only if the landlord recovers possession of the house in pursuance of the order,

(c) the order must specify the period for which the landlord's right to recover possession of the house is to have effect (being no longer than any maximum period which the Scottish Ministers by order prescribe), and

(d) the landlord must have regard to any guidance issued by the Scottish Ministers about recovery of possession in pursuance of the order.

(5B) Before making an order under subsection (5A)(c) or issuing guidance under subsection (5A)(d), the Scottish Ministers must consult—

(a) such bodies representing local authorities,

(b) such registered social landlords or bodies representing them,

(c) such bodies representing tenants' interests, and

(d) such other persons,

as they think fit.

(6) Where, in proceedings under section 14 on the ground set out in paragraph 10 of schedule 2, it appears to the court that the landlord intends that—

(a) substantial work will be carried out on the building (or a part of the building) which comprises or includes the house, and

(b) the tenant should return to the house after the work is completed,

the court must make an order that the tenant is entitled to return to the house after the work is completed; and subsection (5)(a) does not apply in such a case.

 

 

The Pursuers’ Submissions

[4]        The pursuers’ counsel confirmed that the pursuers had entered into an agreement with the defender, after the summons had been served, whereby the defender was to remain in occupation of the property upon payment of an agreed sum including payment of arrears of rent.  He acknowledged that the issue was whether by doing so a new contractual tenancy had been created which would render the proceedings incompetent and liable to dismissal.  He submitted that no new tenancy, as envisaged by the legislation, had been created.  The pursuers wished to monitor the situation before determining whether to abandon the action or seek an order for recovery of possession.

[5]        He referred to the essential features of a lease, as set out in Rankine on the Law of Leases 3^rd Ed at pages 114 to 116, being the parties, the subjects, the rent and the duration.  So far as rent is concerned this might be a specified sum or services or a formula by which it is agreed.  With regard to duration, it is recognised that in the absence of any specified period it is implied that the period of the lease will be for one year.  In Gray-v-The University of Edinburgh 1962 SC 157 the Lord Justice Clerk opined that the doctrine by which a lease for a period of one year would be implied would only operate if there was agreement as to the parties, subjects and rent or either express agreement to take possession or implied agreement evidenced by the actual taking of possession.  In this case the basis upon which the defender was in possession of the property was an SSST.

[6]        The pursuers’ counsel accepted that once the initial period of the lease had come to an end some step required to be taken to stop the operation of tacit relocation.  At common law service of a notice to quit brought the lease to an end.  This might be waived.  If a landlord did not insist upon the notice, and allowed the tenant to continue to occupy the property upon payment being made, in any subsequent proceedings the tenant may argue personal bar.  No such argument was being made in this case.  What the landlord had done in this case, it was submitted, was to give the defender one last chance to fulfill his obligations, in particular the payment of rent, and if he did not do so the landlord would proceed with removal.  The defender was aware that this was the landlord’s position.

[7]        The pursuers’ counsel referred to the two methods of creation of an SSST being under either section 34 or section 35 of the 2001 Act.  He also referred to the two methods by which an SSST might be terminated being under sections 36 and 14 of the 2001 Act.  He submitted that the general scheme of the 2001 Act was to give tenants limited rights and this was demonstrated in section 36 where no reason for termination need be specified.  The power of the landlord was constrained by the provisions of the 2001 Act and in particular by schedule 6 which specified the grounds for granting an SSST.  The restrictions upon termination of a tenancy, under section 12 of the 2001 Act, did not apply to an SSST.

[8]        It was submitted that there was an inconsistency in the scheme of the 2001 Act.  At common law service of a notice to quit brought the lease to an end, however, section 36(6) provided that an order under subsection (5) has the effect of terminating the tenancy.  Accordingly the tenancy continues until the court grants the order.  In Aberdeenshire Council-v-Shaw 2012 (Sh Ct) 144 it was held that service of a notice to quit was required in addition to a notice in terms of section 36(2) to stop the operation of tacit relocation.  The pursuers’ counsel also referred to the views expressed in paragraphs 101 to 103 of chapter 23 of Rennie & Others on Leases and at page 116 of Stalker on Evictions in Scotland, with reservations as to the correctness of the analysis. 

[9]        It was submitted that a purposive approach to statutory interpretation should be adopted and that the words used should be given their ordinary meaning.  In the scheme of the 2001 Act a notice to quit was not intended to terminate a tenancy.  The tenancy, which was a creature of statute, would continue to exist until terminated by the court.  The landlord was unable to recover possession until an order was granted by the court.  The tenant was entitled to remain in possession until then and the landlord was required to leave him in possession.

[10]      It was also submitted that Parliament had envisaged a period of delay during which the tenant would have the benefit of possession.  A notice served under section 36(2) required to be in force at the time of proceedings and only remained in force for a period of six months after the date specified therein.  During the period of possession the tenant was under an obligation to pay rent.  At common law if the tenancy was at an end the landlord would be entitled to violent profits.  The tenancy not being at an end the obligations of the lease continued.

[11]      The grounds for creation of an SSST in schedule 6 included where the prospective tenant had had previous problems, such as anti-social behaviour orders.  It would be disproportionate to prohibit a landlord from entering into an arrangement to give a tenant time to regularise his position with regard to payment of rent and to force a landlord to seek decree for recovery of possession.  In any event the SSST was not at an end and the landlord was entitled to have discussions about how rent would be paid to forestall recovery of possession.  As yet no indication had been given that these proceedings would not be continued. 

[12]      It was accepted that it was possible to enter into a new tenancy agreement however any such agreement would be a Scottish Secure Tenancy (SST).  Section 11 of the 2001 Act provides

(1) a tenancy of a house is a Scottish Secure tenancy if-

(a)the house is let as a separate dwelling,

(b) the landlord is-

(i) a local authority landlord or

(ii) a registered social landlord….

(c) the tenant is an individual and the house is the tenant’s only or principal home…. 

 

Section 23 provides that the landlord requires to draw up a tenancy agreement, ensure that that is signed before commencement of the tenancy and give a copy to the tenant. 

[13]      In conclusion, the pursuers’ counsel submitted that the interests of the landlord and tenant should be balanced and that in this case the landlord was giving the tenant an opportunity to comply with his obligations before seeking decree. 

 

Discussion

[14]      In an SSST there is limited, if any, security of tenure.  The landlord does not, generally, require to give reasons for seeking recovery of possession beyond the notice given in terms of section 36(2).  All that the landlord requires to do is to comply with the provisions of the 2001 Act, to serve the appropriate notices, including a notice to quit (see Aberdeenshire Council-v-Shaw), and to raise proceedings within the relevant timescale.  In those proceedings the court must grant an order for recovery of possession if the tenancy has reached its ish, tacit relocation is not operating and no further contractual tenancy “(whether or not a short Scottish secure tenancy)” is in existence.  Accordingly, provided the landlord has complied with the provisions of section 36 and the three criteria are met the court has no discretion with regard to the granting of an order and is not required to consider the reasonableness of the landlord’s crave. 

[15]      The defender in this action did not lodge any response and was not in attendance when the case called.  Notwithstanding, the pursuers did not seek decree but moved to adjourn the case to a later date.  It is accepted by the pursuers that the reason they did not seek decree is that they have entered into an agreement with the defender whereby he will continue to occupy the property upon payment of a sum by way of rent, calculated to include arrears of rent.  Three of the essential clauses of a lease appear to have been agreed, namely, the parties, the subjects and the rent.  In those circumstances, at common law, the duration of the lease would be implied to be one year – Rankine at page 115. 

[16]      It is difficult to conceive of any other interpretation of the agreement reached between the parties than that a tenancy has been created.  While the pursuers’ counsel was at pains to stress that the defender’s continued occupation of the subjects was conditional upon his payment of the sum agreed that might be said to be the case in any lease.  A landlord generally has grounds to recover possession of the subjects if the tenant accrues arrears of rent. 

[17]      Accordingly even if the SSST between the parties has come to its ish and tacit relocation is not operating, and these were matters which were not addressed at the hearing, the third criterion, of no contractual tenancy being in existence, would not seem to be met.

[18]      The pursuers’ counsel reviewed the scheme of the 2001 Act and emphasised that the defender’s tenancy was a creature of that statute.  Section 36(5) sets out the criteria that require to be met before the court is able to grant an order for repossession of property held under an SSST.  Applying the usual approach to statutory interpretation and giving the words in the provisions their ordinary meaning one of the criteria which must be established before the court may grant such an order is that no further contractual tenancy is in existence.  It may reasonably be inferred that Parliament envisaged that parties to an SSST might enter into an agreement for a further tenancy before the termination of the SSST.  Given the grounds upon which an SSST may be granted and the limited security of tenure of such leases it may be that it was envisaged that there might be a progression to a more secure form of tenancy depending upon the circumstances and behaviour of the tenant.  The 2001 Act provides in section 35 for conversion from a Scottish Secure Tenancy to an SSST in the event of an Anti-Social Behaviour Order being issued to the tenant and in section 37 for conversion from an SSST to a Scottish Secure Tenancy after a period of one year if relevant notices have not been served or proceedings have been determined in favour of the tenant.  Section 37 however does not apply to all tenants under an SSST but only to those granted an SSST under grounds one and two of Schedule 6.  Accordingly the concept of a progression to, or from, a more secure form of tenancy is established in the 2001 Act.

[19]      Counsel for the pursuers submitted that if a further tenancy had been created it could only be a form of tenancy in terms of the 2001 Act.  He referred to sections 11 and 23 of the 2001 Act.  If the provisions of section 11 are met, namely that the property is let as a separate dwelling house to an individual as his principal home by a local authority landlord, then it may be that the type of tenancy entered into by the parties is a Scottish Secure Tenancy.  The provisions of section 23 requiring the lease to be in writing and signed and delivered to the tenant prior to commencement of the tenancy would not appear to have been complied with and may challenge the existence of such a tenancy.  The criterion in section 36(5)(c) is that no further contractual tenancy “(whether or not a short Scottish secure tenancy)” is in existence.  This appears to imply that different types of tenancy might be entered into including a further SSST.  However it is not for the court to determine what type of tenancy has been entered into but simply to ascertain if a further contractual tenancy is in existence at the time that an application is made for an order for repossession.

[20]      The pursuers’ counsel invited me to consider the issue of proportionality where the pursuers were giving the defender another opportunity to comply with his obligations under the lease.  However in this case the pursuers raised proceedings in terms of section 36 of the 2001 Act where, provided they have complied with the service of the relevant notices and the criteria are met, the court has no discretion in the granting of an order for repossession.  Unlike in proceedings in terms of section 14 of the 2001 Act the court has no opportunity to consider the factors set out in section 16 or the question of reasonableness.  It is of course open to the pursuers to proceed in terms of section 14.  In proceedings in terms of section 36 the pursuers are in a privileged and powerful position and the tenant is disadvantaged by not having the protections afforded in terms of section 16.  It appeared that the pursuers wished to have the future prospect of an order for repossession hanging over the tenant like the sword of Damocles.  Had Parliament intended that actions brought under section 36 be capable of being adjourned for various reasons then a provision similar to that in section 16(1) of the 2001 Act, whereby the court may adjourn upon certain specified grounds, could have been made.  In my opinion the nature of an SSST, the right given to landlords by section 36, the limited security of tenure given to tenants, and the absence of any provision whereby proceedings might be adjourned all point to an expectation that if proceedings are raised in terms of that section and the criteria appear to be met, then, as provided in section 36(5), the court must make an order for recovery of possession and not adjourn the proceedings.  This, as counsel for the pursuers put it, may appear to be forcing the pursuers to seek decree.  Of course the pursuers could choose not to enforce their decree, thereby having it hanging over the defender.  It appears to me, however, to be significant that in section 16 Parliament provided that there be a limited period of time, not more than 6 months, during which an order for recovery of possession would remain extant.  This would allow for the sort of situation which was said to be envisaged in this case, namely for the tenant to be given an opportunity to comply with his obligations under the lease and in particular payment of rent.  Thus the sword of Damocles can be held over a tenant for up to 6 months only.  That no such provision was included in section 36 implies that the purpose of section 36 proceedings was to facilitate the speedy recovery of property that had been let to tenants in specified circumstances and is consistent with the limited security of tenure afforded to them.

[21]      Having found, however, that a further contractual tenancy is in existence an order for recovery of possession cannot be granted.  It was accepted by the pursuers’ counsel that in these circumstances it would be appropriate to dismiss the action.  It is also appropriate that there be no award of expenses due to or by either party.

[22]      The validity of the notices served by the pursuers in this case was not addressed.  I would observe that the notice to quit required the defender to remove from the property on or before 11^th February 2015.  The pursuers aver that the SSST was entered into on 6^th May 2010 and was for an initial period of 6 months.  The ish would appear to be 6^th November 2010.  The lease was continued on a month to month basis.  Accordingly, on the face of the pursuers’ pleadings, the notice to quit is defective in that it specifies a date other than the ish.  It appears to specify a date later than the ish and would not seem, therefore, to have prevented tacit relocation.  Further the notice to quit appears to have been served upon the defender by hand delivery by the pursuers’ managing agents.  In Govan Housing Association-v-Kane 2003 Hous LR 125 it was held that a notice to quit delivered personally by Housing Association Officers was inept.  Only Sheriff Officers have the authority to serve such a notice personally.  Again, on the face of the pursuers’ pleadings, it would appear that the notice to quit has not been validly served.  Even if there was no further contractual tenancy in existence it would appear that the other criteria, namely that the tenancy has reached its ish and that tacit relocation is not operating, may not be met.