Scottish Court of Session Decisions

John Humphrey, heritable proprietor of the estate of Bayfield, in the county of Ross, let to Murdo Mackay the Mains farm of Bayfield on a nineteen years' lease from Whitsunday 1868 at a yearly rent of £450, payable half-yearly at Martinmas and Whitsunday. Mackay entered into possession of the farm and paid the rents down to Whitsunday 1880. The rent payable at Martinmas 1881 and Whitsunday 1882 not having been paid, MrHumphrey presented a petition for sequestration in the Sheriff Court of Ross, Cromarty, and Sutherland at Tain. The defender averred that the pursuer had failed to fulfil the obligations undertaken by him in terms of the conditions of let—(1) by withholding possession of a substantial portion of the subjects, that portion consisting of a house known as the Carse, and a piece of ground extending to one acre or thereby; and also by depriving him of a field, 6 acres in extent, which he had been led to believe, at the time he offered for the farm, belonged to the farm; (2) by failing to put the farm-buildings and offices into proper tenantable repair, as provided by the conditions of let; and (3) by failing to supply to the defender the necessary waterpower for the working of his thrashing-mill. His averments on this point were as follows—“The pursuer has failed to supply to the defender the necessary water-power for the working of the threshing mill as existing and used during the proprietor's occupation of the subjects as at December 10,1867. The said water-power is stored in a dam on the Bayfield estate, from which it runs through the subjects occupied by defender, and by the said thrashing-mill down to a meal-mill held or leased from the pursuer by Robert Munro, miller, Bay-field. A due and available supply is necessary for the defender's proper working of the subjects, but from his entry down to the present date the defender has been unable to obtain a suitable supply, even when the dam was full, as he has been prevented from exercising any right or control over it by the pursuer or his said tenant, and the pursuer or his tenant have latterly locked the upper dam and deprived the defender of all control

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over the water. In consequence, he has been unable to make use of the thrashing-mill, and has been frequently compelled to stop work, which has caused great delay and inflicted serious injury on his stock. During September and October of last year, in particular, the defender was almost entirely deprived of all water supply, and intimated that he estimated his claim of damages against the pursuer at the sum of £1000.” In the conditions of let exhibited at the time the lease was entered into it had been stipulated that the defender should pay to the pursuer the value of the thrashing-mill, and should at the conclusion of his lease be entitled to its value from the incoming tenant. The defender averred that in consequence of the uncertain supply of water to his thrashing-mill he had suffered loss to the extent of £1000. He estimated his loss arising from damage to his crops by overflow, due to the pursuer's actings in opening and shutting the sluices, at £500; from failure on the part of the defender to put him in full possession of the subjects, at £280; and from failure to put the farm-house and offices into tenantable repair, at £500—in all £2280. This sum the defender claimed to set off against the rent, amounting to £450. He consigned the rent and found caution for expenses in the action, in respect whereof the interim sequestration which had been granted was recalled.

He pleaded, inter alia—“(3) The pursuer having violated or failed to implement his obligations under the agreement founded on, has disentitled himself from enforcing the same against the defender. (4) In the circumstances the defender having retained the rents sued for as the only means of enforcing the pursuer's counter-obligations which he refuses to perform, the action should be dismissed with expenses.”

The Sheriff-Substitute ( Hill) found, inter alia, that “the defender had stated no sufficient reasons for retaining the rents admittedly due,” and decerned against him for the same, and granted warrant to the clerk to pay them to the pursuer out of the consigned fund.

“ Note.—… With regard to the merits, the only grounds stated by the defender for retaining the rents in question which have the least appearance of relevancy are contained in the statement in the revised defences—‘In particular, he (the pursuer) has withheld and withholds from the defender possession of a substantial portion of the subject described in conditions of set, being a house known as the Carse or Schoolhouse, and a piece of ground extending to one acre or thereby;’ and in the statement—‘Further, the pursuer failed to supply to the defender the necessary water-power for the working of the threshing-mill mentioned in art. 7, as existing and used during the proprietor's occupation of the subjects let, and at December 10, 1867.’

The Sheriff-Substitute thinks that this last statement is too vague to be admitted as a relevant defence against the pursuer's claim. It is not expressly stated that the pursuer either was under an obligation to supply water-power, or that he prevented the defender from getting it. And it rather appears, from some of the letters produced by the defender that the water was a subject of dispute between the defender and another party who had a joint right to it, and that the pursuer did what he could to get the matter settled so as to accommodate the defender.

The statement about the house is more precise. And it is, no doubt, the rule that if a tenant has not got the whole subjects of his lease he cannot be required to pay his full rent. In judging, however, whether a statement of this kind is to be admitted as a relevant ground for withholding rent, some regard must be paid to the circumstances in which it is made. Now, here the tenant has been in possession of the farm for about 12 years; during that time complaints, as appears from the correspondence in process, have from time to time been made by the defender to the pursuer as to matters connected with the subjects let, but not a word seems to have been said, until the present defences were given in, about this house and piece of ground having been withheld from the defender. He would have been in a more favourable position if he had claimed them throughout. As matters at present stand, the Sheriff-Substitute thinks the defender must constitute his claim against the pursuer on this as well as the other grounds he alleges in a separate action. He will then be in a proper position for claiming compensation out of future rents, and as there are still some years of the lease to run, he can run no risk by so doing.”

The defender appealed to the Sheriff ( Mackintosh), who adhered.

Note.—The Sheriff is of opinion that this is a question of some delicacy, and he quite recognises the force of the argument which the appellant in his able pleadings deduces from certain recent decisions.

There can be no doubt of the general rule of law that a tenant is not entitled to retain his rent in respect of illiquid claims of damages; and even where the damage arises from the withholding of a part of the subject let, it was formerly considered that the rent could not be retained unless the tenant proposed to throw up his lease, and the subject withheld was sufficiently essential to justify him in doing so. Nor was this doctrine at all infringed upon by the decision in the case of Davie v. Stark referred to by the appellant, because there the tenant had quitted possession, and the question was as to his right to rescind the lease.

But undoubtedly it has now been held (in the cases of the Kilmarnock Gas Light Company, 11 Macph. 58, and Guthrie v. Shearer, 1 R. 181) that where an essential part of the subject let is withheld from the tenant, the landlord is barred from sequestrating for rent, even although the tenant is unable or unwilling to rescind the lease or to quit possession; and accordingly the question in the present case must be held to be, whether the nature and extent of the subjects alleged to be withheld are such as to assimilate the present case to the case of the Kilmarnock Gas Light Company and Guthrie v. Shearer, above referred to, or whether the landlord's alleged default falls short of the withholding of an essential part of the subjects let. So viewing the question, however, the Sheriff is of opinion that on the defender's own statement his case fails.

As regards the water-power, his lease does not appear to warrant any particular supply of water. And as regards the few acres of carse land, as to which the parties are at issue, it cannot,

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the Sheriff thinks, be held that, looking to the size of the farm and the rent paid, these acres form so essential a part of the subjects let as to entitle the defender to withhold the rent. The question is necessarily one of circumstances and degree, and it is probably enough to say that in any view the circumstances of the present case fall far short of those with which the Court had to deal in the two cases referred to. Besides, the Sheriff agrees with the Sheriff-Substitute, that it is not to be left out of view that the present case is raised after twelve years of the lease have run. On the whole, the Sheriff has come to be satisfied that the judgment of the Sheriff-Substitute is right.”

The defender appealed, and argued—A landlord is barred from using sequestration when he is not in a position to say that he has performed his part of the contract. Here the pursuer was said to have failed to implement his part of the contract, by withholding part of the subjects let, and by not furnishing a sufficient water-supply. A defence which claimed retention of the rent till the landlord's obligations were fulfilled was relevant.

Authorities— Kilmarnock Gas Light Co. v. Smith, Nov. 9, 1870, 11 Macph. 58, supra; Gordon v. Suttie, July 13, 1826, 4 Mur. 86; Guthrie v. Shearer, Nov. 13, 1873, 1 R. 181; Davie v. Stark, July 18, 1876, 3 R. 1114.

Argued for pursuer—The defendant paid rent for fourteen years. It was not said, with regard to the water-supply, that the meal-miller had any further right granted to him by the landlord during the continuance of the lease of controlling the water-supply than he enjoyed at the beginning of the lease. The lock was put on in 1875, and no complaint arose about the water-supply till 1880. The whole circumstances and the conduct of the tenant must be considered as instructing his compliance.

At advising—