Dorchester Studios (Glasgow) Ltd v Stone
| Jurisdiction | England & Wales |
| Judge | Lord Wilberforce,Viscount Dilhorne,Lord Kilbrandon,Lord Edmund-Davies,Lord Fraser of Tullybelton |
| Judgment Date | 21 May 1975 |
| Judgment citation (vLex) | [1975] UKHL J0521-3 |
| Date | 21 May 1975 |
| Court | House of Lords |
| Docket Number | No. 3. |
[1975] UKHL J0521-3
House of Lords
Lord Wilberforce
Viscount Dilhorne
Lord Kilbrandon
Lord Edmund-Davies
Lord Fraser of Tullybelton
My Lords,
I have had the advantage of reading in advance the speech to be delivered by my noble and learned friend, Lord Fraser of Tullybelton. I entirely agree with it and, for the reasons he gives, I would dismiss the appeal.
I also agree with the observations made by my noble and learned friend, Lord Kilbrandon.
My Lords,
I have had the advantage of reading the speech of my noble and learned friend, Lord Fraser of Tullybelton, in draft.
I agree that, for the reasons he gives, this appeal should be dismissed.
My Lords,
I have had the advantage of reading the speech about to be delivered by my noble and learned friend, Lord Fraser; for the reasons which he gives I agree that the appeal should be dismissed.
Whatever may be said of the policy, looked at from the standpoint of modern conditions, which seems to underlie the law of Scotland relating to purging an irritancy incurred from non-payment of rent, it is not possible to say that that law is now or has been for many years, in doubt. My noble and learned friend has made an exhaustive analysis of the relevant authorities from the earliest times; in my opinion it cannot yield any conclusion but that which he has reached. The law was firmly laid down, after some uncertainties, in Stewart v. Watson (1864) 2 M.1414, to the effect that (a) such a provision in a lease is a conventional irritancy and not the mere expression of a legal irritancy which might have been purged before decree, ( b) as such it is not purgeable, (c) it is a reasonable and lawful stipulation, ( d) it is not to be compared with a stipulation in a feu contract, by which a right of property is conferred in a sense in which it is not conferred under a lease. Nearly a century later that decision was confirmed in the case of M'Douall's Trustees v. MacLeod 1949 S.C. 593, and, by necessary implication, in the case of Lucas's Executors v. Demarco 1968, S.L.T.89. As counsel for the appellants conceded, the appeal must fail if M'Douall's Trustees was rightly decided. My Lords, in my opinion it was. The rule is subject to a power in the Court to refuse to grant a decree of irritancy where there has been anything unfair about the landlord's conduct. I agree that the pursuer's averments in this case disclose no such unfairness.
The cases make it plain that the law of Scotland in this matter stands on a different footing from that concerned with the relief from a forfeiture for non-payment of rent forming a condition in an English lease. In the latter contract the provision for forfeiture is inserted in order to secure payment of the rent; the rent having been tendered and accepted before judgment the purpose has been served. The debt having been paid the security cannot be enforced, and, it is presumed, goes into cold-storage until next quarter-day. In Scotland the irritancy, as appears not only from Stewart v. Watson but from the opinion of Lord Jamieson in M'Douall's Trustees at p. 616, is regarded as a means by which a landlord can rid himself of an unsatisfactory tenant, who pays his rent, not on the date on which he promised to do so, but only after the landlord has been to the trouble of appealing to the Court. Moreover, a bad payer is probably behind-hand in consequence of general financial instability; such a tenant is not welcome, especially in an agricultural lease, for many reasons. This seems to be the foundation for the distinctive Scottish common-law doctrine.
Whether in modern times that doctrine fairly reflects social policy may be another matter. The distinction between the feu contract and the lease has become unsubstantial since the former took to its death-bed. Moreover, the old view that the lease, unlike the feu contract, does not convey a right of property, wears to-day an air of unreality. Statutes governing successively dwelling-houses, agricultural subjects and business premises, have gone far to confer on tenants interests more easily classified as proprietorial than ephemeral. And the long investment-lease has in recent years become a feature in Scottish cities. All these considerations point, in my opinion, to the need for the Scottish doctrine to be re-examined from the policy point of view, and for my part I would recommend this exercise to the Scottish Law Commission. But I have no doubt as to what the law now is, and I would accordingly dismiss this appeal.
My Lords,
Those brought up in the bland climate of the Common Law Procedure Act, 1852, with its provisions against forfeiture of a tenancy for non-payment of rent if the arrears are paid or tendered before the landlord's action for possession is tried, and even for relieving the tenant within six months after the landlord has obtained judgment, have indeed been viewing an unfamiliar landscape in hearing this appeal. But, having taken a hard look at it and having considered the submissions of learned counsel, I entertain no doubt that, for the reasons stated in the speech about to be delivered by my noble and learned friend, Lord Fraser of Tullybelton, this appeal should be dismissed.
My Lords,
The appellants are tenants of a shop in Glasgow under a sub-lease from a firm who were the principal tenants of the shop and of adjoining property. That firm assigned their interest in the sub-lease to the respondents who are now in the position of landlords in the sub-lease. The sub-lease includes a clause of irritancy applicable in several events, one of which is the event of the appellants' allowing any part of the rent to remain unpaid for a period of 21 days beyond the date stipulated for payment. The respondents raised this action of declarator and of removing averring that the appellants had allowed the rent due at Martinmas 1972 to remain unpaid for a period of more than 21 days thereafter, and they founded on the irritancy clause. The appellants' first plea in law is a plea to the relevancy. Their third plea in law is that the irritancy has been purged, and their fifth plea in law is that the purported exercise by the respondents of their right to irritate the lease is "oppressive and a misuse of the rights conferred by the [irritancy] clause". On the main question, as to whether the irritancy could be, and has been, purged, the respondents have been successful before the Sheriff, the Sheriff Principal and the First Division of the Court of Session. On the question of oppression the Sheriff allowed a proof before answer and the Sheriff Principal adhered. The First Division reversed that part of the interlocutor and held that the averments of oppression were irrelevant.
At the earlier stages of the case the parties were in dispute as to the precise meaning of the word "Martinmas" in this lease, and hence as to the day in the month on which the rent had been due, and the appellants denied that they had failed to pay within the 21 days of grace. That matter was decided by all the lower courts against the appellants, and it was not raised in the appeal to this House. The appellants in their printed case accepted that the rent became payable on the 11th November, so that the 21 days of grace expired on 2nd December, 1972. They admit that they had not paid the rent by that date. They tendered payment on 13th December but it was refused by the Respondents who had, on the same day, intimated their intention of enforcing the irritancy and who shortly afterwards raised this action.
The first contention for the appellants, in accordance with their fourth plea in law, was that this irritancy belonged to a class which was capable of being purged and that it had in fact been purged by the tender of rent on 13th December. This contention raises a question of general importance. Mr. Caplan for the appellants conceded that irritancies which are expressly stipulated by contract ("conventional irritancies") are as a rule enforceable according to their terms and cannot be purged—see for example Hannan v. Henderson (1879) 7 R.380 (contract of co-partnership). In that respect they differ from irritancies implied by law ("legal irritancies") in a lease and from all irritancies, legal or conventional, in a feu contract. But he submitted that a conventional irritancy for non-payment of rent, such as the irritancy in the present case, forms an exception to the rule in respect that it can be purged at any time before extracts of a decree of removal, or in the present case (for a reason that I shall mention later) at least until this action was raised. This contention necessarily involved submitting that the case of M'Douall's Trustees v. MacLeod, 1949 S.C. 593 had been wrongly decided. It will therefore be necessary to consider the earlier authorities, but I should say at once that I have reached the opinion that the decision in M'Douall was correct.
The irritancy clause is clause 7 of the sub-lease and is as follows (the Appellants being therein referred to as "the second party" and the Respondents as "the First Parties"):
"In the event of the Second Party contravening or failing to implement any of the obligations incumbent upon them in terms of these presents or allowing any part of the rent to remain unpaid for a period of twenty one days beyond the date stipulated for payment, or if at any time during the currency of this Sub-lease either of the [appellants] shall become insolvent or notour bankrupt, or be sequestrated, or sign a Trust Deed or enter into any arrangement with his creditors then and in any of the said cases it shall be lawful for the...
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