Scottish Court of Session Decisions

Harry Stevenson Roger, sometime farmer at Manorhill, Makerstoun, Roxburghshire, pursuer, brought an action against William Hutcheson, farmer, Courthill, Kelso, defender, and also against Thomas Greenshields and Thomas Steel Greenshields, farmers, Manorhill aforesaid, and Hugh James Elibank Scott MakDougall of Makerstoun, for any interest they might have, in which the conclusions were that “It ought and should be found and declared, by decree of the Lords of our Council and Session, that the defender has validly and effectually accepted the office of oversman under and in virtue of ( first) a deed of submission, dated 26th and 27th May 1919, entered into between the pursuer and the said Thomas Greenshields and Thomas Steel Greenshields, under which Thomas Templeton, farmer, Sandyknowe, Kelso, and Peter Purdie Campbell, land agent, 20 Rutland Square, Edinburgh, were appointed arbiters; ( second) minute, dated 29th May 1919, by the said arbiters accepting office under the said deed of submission, and appointing the defender to be oversman in the event of their differing in opinion, and by the defender accepting office as oversman foresaid; and ( third) minute of devolution by the said arbiters, dated devolving the reference under the said deed of submission upon the defender as oversman, and that the defender as oversman foresaid is bound to proceed in the said submission and bring the matters submitted to him to a final conclusion; and the defender ought and should be decerned and ordained by decree foresaid to proceed in the said submission, and to decide upon and bring to a final conclusion the matters submitted to him by issuing a final decreet-arbitral or award in such terms as he may think right; and in particular, the defender as oversman foresaid ought and should be decerned and ordained to ascertain, fix, and

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determine the amount of compensation for unexhausted manures and feeding-stuffs payable to the pursuer by the said Thomas Greenshields and Thomas Steel Green-shields as representing and undertaking responsibility for the said Hugh James Elibank Scott MakDougall, being one of the matters specifically referred to the determination of the said arbiters and oversman under the said submission; and the defender the said William Hutcheson, and in the event of their appearing and opposing the conclusions thereof the said Thomas Greenshields and Thomas Steel Greenshields and Hugh James Elibank Scott MakDougall ought and should be decerned and ordained to make payment to the pursuer of the sum of £100 sterling, or such other sum as our said Lords shall modify as the expenses of the process to follow thereon, conform to the laws and daily practice of Scotland used and observed in the like cases as is alleged.”

The following narrative is taken from the opinion infra of the Lord Justice-Clerk—“The pursuer was tenant of the farm of Manorhill, of which Mr Scott MakDougall was proprietor. In December 1918 they signed a formal renunciation of the lease, and the farm was let to the defenders Greenshields, who entered into possession thereof as tenants. Thereafter the pursuer and said defenders entered into a submission to two arbiters and the defender Hutcheson as oversman, dated May 1919. The submission narrated, inter alia—“And whereas it has been agreed between the parties hereto that the full implement of the conditions affecting the outgoing tenant contained in said lease should be submitted to arbitration along with the other claims competent to the outgoing tenant against the proprietor (who is represented for the purpose of this submission by the ingoing tenants the said Thomas Greenshields and Thomas Steel Greenshields), and also against said ingoing tenant (sic), all as hereinafter mentioned.” Seven different heads of claim were submitted, the 6th and 7th of which were as follows “What sum shall be payable by the second party representing and undertaking responsibility for the said Hugh James Elibank Scott MakDougall, proprietor of the said farm of Manorhill, to the first party as compensation for improvements under the Agricultural Holdings (Scotland) Act 1908 (8 Edw. VII, cap. 64), and (seventh) generally to settle all claims, disputes, questions, and differences between said first and second parties as outgoing and incoming tenants respectively in said farm of Manorhill.” Some of these claims arose under the lease, while others did not. The arbiters and oversman accepted office by minute appended to the deed of submission and dated 29th May 1919. All of the claims have been disposed of under the submission except the 6th. The oversman objected in May 1920 that the 6th claim could not be dealt with under the submission but must be disposed of by a single arbiter in terms of section 11 (1) of the Act of 1908. The pursuer then brought this action to have the submission proceeded with and exhausted by dealing with the 6th claim. The pursuer duly quitted the farm in terms of the renunciation.”

The pursuer pleaded—“1. The defender as oversman under the said deed of submission being bound to bring the matters submitted to him to a final conclusion, decree of declarator should be granted as concluded for. 2. The defender as oversman foresaid being bound to ascertain, fix, and determine the amount of compensation for unexhausted manures and feeding-stuffs payable to the pursuer by the said Thomas Greenshields and Thomas Steel Greenshields, the pursuer is entitled to decree as concluded for. 3. The defenders, the incoming tenants, being barred by their actings from taking exception either to the form or specification of the notice of claim or the substitution of a special for the statutory arbitration tribunal, the defence stated by them should be repelled.”

The defender William Hutcheson pleaded—“1. The action being premature and unnecessary quoad this defender should be dismissed. 2. The conclusion for expenses against the defender being unwarranted, decree in terms thereof should be refused.” The defenders Thomas Greenshields and Thomas Steel Greenshields pleaded—“1. The action as laid is incompetent in respect that it seeks to invoke the decision of the Court ab ante upon a question upon which the arbiters and oversman are bound to adjudicate in the first instance, and it should therefore be dismissed. 2. Pursuer's averments being irrelevant and insufficient to support the conclusions of the summons the action should be dismissed. 3. The defender William Hutcheson having all along been ready and willing to proceed with all matters competently referred to him, the present proceedings are unnecessary and the action should accordingly be dismissed. 4. The pursuer not having timeously made any claim under the Agricultural Holdings (Scotland) Act 1908 there is no claim for unexhausted improvements upon which the oversman can be called upon to adjudicate, and the action so far as directed to ordaining the oversman to ascertain, fix, and determine the amount payable to pursuer in respect of an alleged claim for unexhausted improvements falls to be dismissed. 5. Separatim—Any claim competent to pursuer for unexhausted improvements under the Agricultural Holdings (Scotland) Act 1908, being referred to the exclusive determination of a single arbiter by the said Act in terms thereof, the defender William Hutcheson has no jurisdiction to entertain any claim by pursuer for unexhausted improvements, and the action so far as directed to ordaining the said William Hutcheson to ascertain, fix, and determine the amount payable to pursuer in respect of an alleged claim for unexhausted improvements falls to be dismissed.”

On 10th November 1920 the Lord Ordinary ( Sands) sustained the fourth and fifth pleas-in-law stated for the defenders Messrs Thomag and Thomas Steel Greenshields, dismissed the action, and found the said defenders and the defender William Hutcheson both entitled to expenses against the pursuer.

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Opinion.—“The object of this action is to compel an oversman to proceed with the adjudication upon a claim for compensation under the Agricultural Holdings (Scotland) Act 1908. The first objection taken by the defenders is that this crave is premature and is an interference with the conduct of a reference before final adjudication either by way of dealing with the claim or by holding it not to be within the arbitration. This plea was very ably urged by junior counsel for the defenders, but eventually Mr M'Phail, as senior counsel for the defenders who have the substantial interest, did not press it, though in view of possible ulterior proceedings I do not say that he formally abandoned it. He recognised, however, that there are here tabled two other questions of law, the ultimate determination of which must rest with the Court, and that it would be inexpedient to send the case back to the oversman, on the footing that whatever view he might take on these two questions of law, the matter would come straight back to the Court in a new process.

These two questions are—(1) Whether it is competent under such circumstances as here obtain to refer a claim for compensation for improvements under the Agricultural Holdings Act 1908 to two referees and an oversman? And (2) Whether in the present case the requirements of the statute as to the date of lodging a claim have been sufficiently complied with?

Possibly the defenders are more logical in placing their questions in their pleas in the reverse order, but I find it more convenient to take them in the order in which I have stated them. 1. By section 11 (1) of the Act of 1908 it is provided—‘All questions which under this Act or under the lease are referred to arbitration shall be determined, notwithstanding any agreement under the lease or otherwise providing for a different method of arbitration, by a single arbiter in accordance with the provisions set out in the Second Schedule to this Act.’ In construing this direction it is proper to keep in view the object of the provision, and in particular of the interference with contract, for the intendment of the Legislature, whilst it cannot control, may aid in the interpretation of a provision. Certain of the interferences with freedom of contract in this branch of the law were undoubtedly dictated by the idea that the landlord letting a farm is in the stronger position and that would-be tenants are apt not to take long views ahead. But this particular provision is not of this character. Reference to two arbiters and an oversman was a system deeply intrenched in custom and supported by a conservative tradition which was stronger among tenants than among landlords. In the view of the Legislature the system was a bad one, causing delay, encouraging evidence and debate upon practical questions, and increasing expense, and the Legislature accordingly made provision to bring it to an end. It has been suggested by a commentator upon the Act that perhaps the provision does no more than make any bargain or agreement to refer to two arbiters not binding, and does not invalidate an actual reference to two arbiters if parties voluntarily chose to make it. There is plausibility in this view, and it is consonant with common law and equitable principles. I have come, however, to be of opinion that, having regard to the object of the Legislature and to the fact that the compensation is purely statutory and is recoverable under a statutory code, the contention falls to be rejected, and that a reference to two arbiters is null or at least voidable at the instance of either party, as being made in disregard of a statutory direction. In the present case the reference is entered into not by the outgoing tenant and the landlord, but by the outgoing tenant and the incoming tenant who has taken over the landlord's obligations. The question arises whether this makes any difference. I am of opinion that it does not. The incoming tenant has just taken over the landlord's obligations according to an arrangement which is common and is contemplated by the Act (section 7), and it would go far to defeat the object of the provision requiring the reference to be to a single arbiter if this provision were held not to apply in such a case. 2. The second question does not necessarily arise if I am right in the view which I take of the first. But as it has been fully argued and both parties wished a judgment upon it, in my view it would be pedantic to reserve it and send parties away to start a reference to a single arbiter. By section 6 (2) it is provided—‘A claim by a tenant of a holding for compensation under this Act in respect of any improvements comprised in the First Schedule to this Act shall not be made after the determination of the tenancy.’

The facts as disclosed by the documents, which are all admitted, are as follows:—The landlord agreed to accept a renunciation of the lease at Whitsunday-Martinmas 1919, the outgoing tenant to have waygoing privileges as if it were the natural expiry of the lease. Upon 30th January 1919 the agents of the pursuer, the outgoing tenant, wrote to the agents of the landlord—‘We shall put in hand the preparation of a claim on behalf of the Messrs Roger for compensation under the Agricultural Holdings Act and hope to communicate with you further on the subject later on.’ The claim here adumbrated was not presented either to the landlord or to the incoming tenant until long after Martinmas 1919 the date of the termination of the tenancy, as regards the requirement for making a claim. The landlord let the farm to the present defenders with entry at Whitsunday-Martinmas 1919, and took them bound to meet any claim which the outgoing tenantmight have under the Agricultural Holdings Act. Upon 2nd April 1919 the pursuer's agents wrote to the defenders' agents—‘We are now preparing a submission between Mr Roger and the incoming tenant and shall be glad to learn whether you would like us to include in the submission Messrs Roger's obligations to the landlords under the lease as to buildings, fences, &c., and also the valuation of unexhausted manures, &c.—if the latter is included

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Mr Scott Makdougall will of course continue to be responsible until a settlement is made by Mr Greenshields.’ To this the landlord's agent replied upon 3rd April—‘What is proposed with regard to the valuations, &c., seems to be all in order, but before the draft submission is engrossed for signature perhaps you will kindly send it us for perusal and our client's instructions if thought necessary with regard to the arbiters appointed and the subject-matter of the reference.’

The deed of submission was duly prepared and was executed upon 26th, 27th May 1919, and it contained, inter alia, the following clause in the enumeration of the matters referred—( Sixth) ‘What sum shall be payable by the second party representing and undertaking responsibility for the said Hugh James Elibank Scott MakDougall, proprietor of the said farm of Manorhill, to the first party as compensation for improvements under the Agricultural Holdings Act.’

As it appears to me this clause did no more than leave open or at most adumbrate a claim. It did not certiorate the existence of a claim, still less indicate under what branch or branches of the schedule to the Act any claim would be made. There was indeed no call for a claim at this time. The outgoing tenant had still, under the statute, six months to prepare and tender a claim.

Nothing more, however, was done until long after Martinmas. But the pursuer maintains that by the communings and deed of submission he has satisfied the requirement that the claim shall be made before the determination of his tenancy. The landlord has intimated that while he does not personally desire to stand upon the statutory requirements, the matter is for the defenders who have taken over his obligations. The defenders maintain that there was no timeous claim.

The objects of the requirement that the claim shall not be made after the determination of the tenancy is well understood. The landlord is to have an opportunity of inspecting the holding in the knowledge of the claim before anything is disturbed. He can ascertain the appearance and state of the holding and he can also determine as to a counter claim. Under the original Act of 1883 notice of an intention to claim compensation under the Act required to be given four months before the determination of the tenancy (section 7). There was no requirement that the claim itself should be made at any particular time, and in practice it was generally reserved for the arbitration, but it was required that the notice ‘shall state as far as reasonably may be the particulars and amount of the intended claim.’ An argument might perhaps be derived from this provision that the requirement of particulars being contained in the Act of 1883 and omitted from the Acts of 1900, 2 (1), and 1908, shows that particulars were not contemplated by the later Acts. But the Act of 1883 deals not with a claim but with a notice of an intention to make a claim, which is quite a different thing, and the reasonable inference appears to be that the reason why there is no similar requirement as regards the claim is that according to ordinary understanding a claim in the later Acts necessarily infers reasonable specification of its nature and amount. This view is strengthened by the proviso in the later Acts that ‘when the claim relates to an improvement executed after the termination of the tenancy but while the tenant lawfully remains in occupation of part of the holding, the claim may be made at any time before the tenant quits that part.’ It cannot, I think, be reasonably suggested that the Legislature contemplated that the tenant might start some new kind of improvement not previously contemplated during this fag end. But it was contemplated that he might be feeding cattle with cake or something of that kind which could not be reasonably estimated until his final removal.

It is not necessary in the view I take to determine what particulars are necessary for a claim which in terms of the statute must be made before the termination of the tenancy. But I think there must be such a definite statement of claim as reasonably satisfies the purpose of the requirement. It is not in my view sufficient that the outgoing tenant shall merely indicate an intention to make a claim with no further specification than perhaps a reference to certain heads of improvement mentioned in the schedule, e.g., as in the present case ‘Compensation under the Agricultural Holdings Act,’ or ‘Valuation of unexhausted manures, &c.’

It is suggested by the pursuer that the defenders, the incoming tenants, have not acted in optima fide, that they have lain-by well knowing that the pursuer understood he had a claim, and that in the particular circumstances of the case they are seeking to take advantage of the neglect of a technical requirement. That may be so, but in my view if equipollents for the statutory requirement of making a claim before the termination of the tenancy were admitted it would be to allow a hard case to make bad law.

I shall accordingly sustain the fourth and fifth pleas-in-law for the defenders Messrs Greenshields, and dismiss the action with expenses to both sets of defenders.”

The pursuer reclaimed, and argued—(1) It was competent to refer the claims to two referees and an oversman. Section 11 (1) of the Agricultural Holdings (Scotland) Act 1908 (8 Edw. VII, cap. 64) did not apply, because some of the claims in the submission were claims which arose under neither the Act nor the lease— Newby v. Eckersley, [1899] 1 QB 465. Johnston, Agricultural Holdings (Scotland) Act 1908 (6th ed.), p. 50, footnote 2. In any event the terms of the section were not peremptory and might be waived—Maxwell, Interpretation of Statutes (6th ed.), p. 678. In a similar way the Statute of Limitation might be waived— East India Company v. Paul, 1849, 7 Moo. P.C. 85. Accordingly, even if the terms of the section applied, the parties must be held to have waived the section by signing the submission. (2) The claim had been

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duly made. The requirements for constituting a valid claim; under the Agricultural Holdings (Scotland) Act 1908 were no higher than those under the Workmen's Compensation Act 1897 (60 and 61 Vict. cap. 37), section 2, and under the latter Act the claim need not be for a specific sum— Thompson v. Goold & Company, [1910] AC 409, per Lord Loreburn, L.C., at 410—nor need it be in writing— Lowe v. M. Myers & Sons, [1906] 2 KB 265, and a request for arbitration was in itself a sufficient claim— Fraser v. Great North of Scotland Railway Company, 1901, 3 F. 908, 38 S.L.R. 653. The claim need not be detailed. In the style given by Jackson in his commentary on the corresponding English Act no particulars whatever are given—Jackson, Agricultural Holdings Acts 1908–14 (4th ed.), p. 153. In any event the defenders had led the pursuers to believe that the claim was amply disclosed and therefore they were now barred from objecting to its sufficiency—Rankine, Personal Bar, pp. 4 and 5.

Argued for the respondents Thomas Greenshields and Thomas Steel Greenshields—1. In the circumstances the Court ought not to interfere with the arbitration proceedings, because the crave was premature— Licences Insurance Corporation and Guarantee Fund, Limited v. W. &R.B. Shearer, 1907 S.C. 10, 44 S.L.R. 6, per Lord Kyllachy at 1907 S.C. 15, 44 S.L.R. 9. 2. It was not competent to refer the claim to two referees and an oversman. The Agricultural Holdings (Scotland) Act 1908, sec. 11 (1), had laid down a code of procedure which must be followed, viz., arbitration by a single arbiter in accordance with the rules prescribed in the Second Schedule of the Act— Stewart v. Williamson, 1910 SC (HL) 47, 47 S.L.R. 536, per Earl of Halsbury at 1910 S.C. (H.L.) 48, 47 S.L.R. 537. The Agricultural Holdings (Scotland) Amendment Act 1910 (10 Edw. VII and 1 Geo. V. cap. 30) prescribed the limits of the system of arbitration established by the principal Act, but within these limits the prescribed code must be strictly carried out, for the words of the section were peremptory and clear— Sellar v. Highland Railway Company, 1919 SC (HL) 19, 56 S.L.R. 216, per Lord Finlay at 1919 S.C. (H.L.) 25, 56 S.L.R. 220. The consent of the defenders could not give jurisdiction— Lismore v. Beadle, 1842, 1 Dowling (N.S.) 566, per Wightman (J.) at 569; Maxwell, Interpretation of Statutes (6th ed.), p. 683. 3. The claim had not been duly made. No claim had been disclosed which was a claim within the meaning of the Act. Even if there had been a claim within the meaning of the Act it was a bad claim in respect that it did not state its pecuniary amount and was vague, irrelevant, and lacking in specification— Sinclair v. Brown, 1892, 19 R. 780, 29 S.L.R. 652, per Lord President (Robertson) at 19 R. 784, 29 S.L.R. 655. Cowdray v. Ferries, 1919 S.C. (H.L.) 27, 56 S.L.R. 220; Sylvester v. Brown, (1916) L.J., 85 C.L. 1173; Thompson v. Goold & Company ( cit.), per Lord Loreburn, L.C., at 411, and Newby v. Eckersley were also referred to.

At advising—