Clydebank Investment Company v Marshall
| Jurisdiction | Scotland |
| Judgment Date | 12 July 1927 |
| Docket Number | No. 94. |
| Date | 12 July 1927 |
| Court | Court of Session |
Lord Hunter, Lord Ormidale, Lord Anderson, Lord Justice-Clerk (Alness).
Landlord and Tenant—Statutory rent restriction—Notice of increase—Validity of notice—Miscalculation of rates payable by tenant—Rate of assessment reduced after date of notice—charge for stair gas included under rates—Errors not material—Increase of Rent and Mortgage Interest (Restrictions) Act, 1920 (10 and 11 Geo. V. cap. 17), secs. 2 (1) (b) and 3 (2).
The Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, enacts, by sec. 2 (1) (b), that a landlord may make an increase of rent in respect of any increase of rates ‘for the time being payable by the landlord’; and, by sec. 3 (2), that the landlord, if he intends to increase the rent, must serve on the tenant a valid notice of such intention, which notice shall be in a prescribed form.
A notice of intention to increase rent was given in writing and in statutory form, and it became effective in July 1921. In October of that year, after the Valuation-roll had been made up and the rate of assessments fixed for the year 1921–1922, the increase in occupier's rates was found to have been slightly overestimated in the notice, owing to the fact that, although the valuation of the house had been increased as anticipated by the landlord, any resulting increase in rates had been minimised by a reduction of the former rate of assessment. The trifling overcharge thereby occasioned was refunded to the tenant. In an action for recovery of arrears of rent, brought in 1926, the tenant denied liability for any increase, and maintained that he was liable only for the standard rent, on the ground that the notice of 1921 was invalid, in respect that (1) the notified increase of rates was inaccurate, and (2) a charge for stair gas had wrongly been included in the increased rates.
Held that, as the tenant had suffered no prejudice, and as the notice did not contain any statement, either with regard to the increase of rates or the inclusion therein of stair gas, which was false or misleading in any material respect, and was as accurate as it could be in the circumstances at the time when it was given, the notice was not invalid.
On 30th March 1926, the Clydebank Investment Company, Limited, Glasgow, and Hacking & Paterson, their factors, brought an action in the Sheriff Court at Dumbarton against Francis A. Marshall for payment of arrears of rent amounting to £45, 0s. 10d., alleged to be due by him as tenant of a dwelling-house at 36 Livingstone Street, Clydebank, of which the first-named pursuers were the proprietors.
The house in question was a dwelling-house to which the provisions of the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, applied.* The standard rent of the house, as at 3rd August 1914, was £15, 5s., payable in monthly instalments, and the net rent was £12, 12s. On 26th April 1921 the proprietors, through their factors, served upon the tenant a notice of their intention to increase the monthly standard rent by the amount of £1, 0s. Id. per month as from 14th July 1921. This notice was in writing and in the form prescribed by the First Schedule to the Act of 1920, and under paragraph (B) it included a sum of 11s. 8d., stated to be payable under sec. 2 (1) (b) of the Act, ‘on account of an increase in the rates payable by us (1) as owners and (2) in terms of the House Letting and Rating (Scotland) Act, 1911.’ A note appended to the notice stated that this sum of 11s. 8d. included a charge of 10d. per month in respect of stair gas.
When the landlords prepared this notice the assessments for the year 1921–1922 had not yet been fixed, and they had assumed that for the following year the assessor would increase the figure at which the house was entered in the Valuation-roll for 1920–1921, and, further, that the existing rate of assessment would not be altered. As regarded valuation their anticipation proved correct, but in October 1921 the rate of assessment was lowered, the amount leviable in respect of occupier's rates being reduced from 8/8·83d. to 7/8·97d. per £. The result of the alteration in the rate of assessment was that, as the reduced rate operated retrospectively from Whitsunday 1921, the landlords by October had been overpaid to a small extent, and they repaid the excess to the tenant.
In his defences the tenant stated objections to the notice, in respect (1) that the rates had not been increased either at 26th April 1921, when the notice was given, or at 14th July, when it purported to come into operation, and (2) that it had improperly included in the increase for rates the charge for stair gas, such a charge not being a rate in the sense of the Rent Restriction Acts. He accordingly pleaded that, as the notice of increase was invalid as to its terms and demands, only standard rent was due.
A proof was allowed and led, the import of which is contained in the preceding narrative. On 9th November 1926 the Sheriff-substitute
(A. J. P. Menzies) pronounced an interlocutor in which he found in law that charges for stair gas were not a rate in the sense of the Rent Act, 1920, and that the notice was invalid in toto; and assoilzied the defender. In an appeal his interlocutor was recalled by the Sheriff (Macphail), who granted decree as craved.
The defender appealed to the Court of Session, and the case was heard before the Second Division on 8th and 12th July 1927.
Argued for the appellant (defender);—Section 2 (1) (b) of the Increase of Rent and Mortgage Interest (Restrictions) Act, 1920,1 referred to the amount of rent payable ‘for the time being,’ and these qualifying words directly pointed to the state of matters existing when the notice was issued. Here no increase in respect of rates was payable as at that date, for no increase had then been made in respect either of the valuation or of the rate of assessment. The landlords should have delayed the issue of the notice until the actual amount of the increase in rates could be ascertained precisely, when it would have been competent for them to recover from the tenant the amount of any increased rates already paid by them.2 The course which they adopted had resulted in the issue of a notice which, as regarded the claim for increased rates, was not a valid notice within the meaning of section 3 (2). That section fell to be construed strictly, and any failure to state material facts accurately was fatal to the validity of the notice.3 Here an essential requirement of section 3 (2) had not been complied with, for the landlords had demanded an increase in respect of rates which, when the notice was issued, were not payable by them, and in fact never had been paid by them. The fact that the tenant had tacitly acquiesced in the claim did not bar a subsequent challenge. Further, however, the notice was vitiated by the inclusion in paragraph (B) of the charge for stair gas. Such a charge was not a rate within the meaning of the Acts.4
Argued for the respondents (pursuers);—The appellant's argument was founded on a pure technicality, since in effect he admitted that by somewhat different procedure the landlords, once the rate of assessment was fixed in October 1921, could competently have...
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