Guthe v Broatch
| Jurisdiction | Scotland |
| Judgment Date | 08 December 1955 |
| Docket Number | No. 13. |
| Date | 08 December 1955 |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Landlord and TenantArbitrationVariation of rentDuty of arbiter"Shall not take into account"Agricultural Holdings (Scotland) Act, 1949 (12, 13 and 14 Geo. VI, cap. 75), sec. 7 (2) (b).
The Agricultural Holdings (Scotland) Act, 1949, sec. 7, which provides by subsec. (1) for the reference to arbitration of questions as to variation of rent, enacts by subsec. (2):"On any reference under the last foregoing subsection the arbiter (b)shall not take into account the relief in respect of rates to occupiers of agricultural lands and heritages effected by the Local Government (Scotland) Act, 1929 "
A tenant occupied a farm by tacit relocation after the expiry of an extension of a lease entered into in January 1923. In an arbitration brought for the purpose of determining the rent to be paid from Whitsunday 1955,
Held (1) that under sec. 7 an arbiter was not tied to the contemporary letting value of the subjects in the open market, but must, subject to observing the statutory instructions, fix what he considered to be a proper rent as between the particular landlord and the particular tenant; and (2) that the requirement of subsec. (2) (b) that he "shall not take into account" the rating relief did not mean that he should ignore the rating relief but meant that he should secure to the tenant the benefit of that relief.
Opinions reserved on the question whether "the relief effected by" the 1929 Act included relief already effected by earlier Acts.
In an arbitration under section 7 of the Agricultural Holdings (Scotland) Act, 1949, between Julius Ernst Guthe, proprietor of the farm of Dryfesdalegate, Dumfries, and George Broatch, the tenant, the arbiter was asked to determine the rent to be paid as from the term of Whitsunday 1955.
The arbiter having issued proposed findings, the landlord craved and obtained a stated case for the opinion of the Court.
The stated case set forth that the arbiter found, inter alia,the following facts proved or admitted:"(1) That the tenant George Broatch occupies the holding of Dryfesdalegate in terms of a lease dated 18th November 1922 and 6th January 1923, extended in 1935 for a further period of fourteen years, and, since the expiry of that period, the tenant has occupied on tacit relocation. (2) During the proof and hearing before me, the parties agreed:(a) That a reconditioned cottage which is at present occupied by an estate worker in the landlord's employment will be made available to the tenant for a worker and will be included in the subjects let to him as from Whitsunday 1955. (b) That two enclosures extending to 11997 acres or thereby of land hitherto included in the let to the tenant, but which the tenant declares to be of no value, are relinquished by the tenant and resumed by the landlord, the landlord obtaining access from one of these enclosures to the other over ground included in the let to the tenant. (c) That notwithstanding the agreements expressed in (a) and (b) above, the effect of any decision to increase the rent was not the creation of a new lease; that therefore section 5 of the 1949 Act does not apply to the tenancy. (3) That the present rent of the holding is 267, 8s. 6d., made up as follows:(a) Rent as fixed in letters dated 25th January and 20th March 1934 extending the lease for 14 years, 250; (b) Annual payment under section 1 (7) of the Land Drainage (Scotland) Act, 1941, as determined by the Secretary of State for Scotland on 6th March 1950, 12, 8s. 6d.; (c)Increase in rent as agreed with the tenant on account of extension of implement shed carried out at the landlord's expense in September 1952, 5. (4) The area of the holding, after excluding the 11997 acres above mentioned, is approximately 202 acres. The holding has been farmed as a stock farm and is not equipped as a dairy farm. (5) The tenant has not made any such improvements as are mentioned in section 7 (2) (a) of the 1949 Act, nor has he caused or permitted any dilapidation or deterioration of or damage to fixed equipment of the land such as is mentioned in section 7 (2) (c) of that Act. (6) The farm buildings are substantialsubject as aftermentionedand well maintained, but they are of some age and are not planned to suit modern conditions and do not lend themselves to economy in labour. The upright posts of the hayshed are completely decayed through natural tear and wear, and the granary requires re-roofing, also through natural decay."
The stated case proceeded:"The said Julius Ernst Guthe on these facts contended that the rent should be fixed at such a figure as a prudent landlord would accept from a prudent tenant if the farm were offered to let in the open market with entry at Whitsunday 1955, and he suggested a rent of 600. The said George Broatch on the other hand contended in his statement of case that the present rent should be reduced by an unspecified amount, but at the hearing he indicated he would be willing to pay a rent of 330 from Whitsunday 1955. It was contended for the tenant that, in considering the effect of derating, I should follow the method detailed in Marshall on Agricultural Outgoing Claims, 1929, pp. 202 to 205. On 13th January 1955 I issued proposed findings, with a note attached, in which I proposed to fix the rent of Dryfesdalegate Farm from Whitsunday 1955 at 387 "
The arbiter's note included the following passage:"This rent [496], however, is based on the assumption that the tenant is paying occupier's rates (which in 195455 amounted to 8s. 1d. per ) on one-eighth of his rental: in other words, a rent of 496 plus occupier's rates amounting to approximately 25 (a total of 521) is what the tenant of this holding should reasonably pay in respect of these two outgoings. But by section 7 of the Agricultural Holdings (Scotland) Act, 1949, I am directed not to take into account the relief in respect of rates to occupiers of agricultural lands and heritages effected by the Local Government (Scotland) Act, 1929, nor the amounts recoverable by occupiers from owners under section 47 of that Act nor any benefit that may accrue to the tenant from the operation of the Agricultural Marketing Act, 1931. To ascertain what is the relief which the tenant enjoys under the Local Government (Scotland) Act, 1929, I must assume that agricultural derating has been abolished. If this were so, the total rateable value of subjects in the County of Dumfries would be increased from approximately 869,000 to approximately 1,180,000 and therefore occupier's rates would be approximately two-thirds...
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Richard Walter Morrison-low V. The Executors Of Thomas Herbert Paterson
...that determination the arbiter had a wide discretion that entitled him to take into account the sitting tenant factor (Guthe v Broatch, 1956 SC 132) and the tenant's personal circumstances (eg Crown Estate Commrs v Gunn, 1961 SLCR App 173). [5] The Agriculture Act 1958 (the 1958 Act) abolis......