McDouall's Trustees v MacLeod
| Jurisdiction | Scotland |
| Judgment Date | 15 July 1949 |
| Docket Number | No. 64. |
| Date | 15 July 1949 |
| Court | Court of Session (Inner House - Second Division) |
2ND DIVISION.
Landlord and TenantLeaseTerminationConventional irritancyCondition in farm lease terminating possession if rent in arrearRent in arrear and action of removingRent paid prior to decreeWhether irritancy purged.
The lease of a farm contained a clause enumerating a number of events on the occurrence of any one of which the proprietor might put an end to the lease and resume possession of the farm, one of these events being the failure by the tenant to pay his rent within three months after it became due.
The tenant having failed to pay the half year's rent due at Whitsunday, and the rent being still unpaid on 22nd October, the landlord, having previously given notice of his intention, brought an action against the tenant for declarator that he had incurred an irritancy of the lease and for an order ordaining him to remove. On 9th November the tenant paid the arrears of rent and thereafter lodged defences to the action, contending that the irritancy had been purged by payment of the rent, the stipulation being merely a remedy for non-payment.
Held that, as the parties to the lease had bargained that failure in punctual payment should irritate the lease, payment after the action had been brought could not affect the bargain; and that the pursuer was entitled to decree.
Semble that a different decision might be given in a case where the landlord had made a misuse or an oppressive use of his powers under the lease, or where the stipulation in the lease as to the effect of non-payment of rent was merely an echo of the common or statutory law.
Stewart v. WatsonUNK, (1864) 2 Macph. 1414,followed.
John Gavin Milne Home and another, the trustees acting under the trust-disposition and settlement of Andrew Kenneth M'Douall and, as such trustees, proprietors of the farm of Auchabreck, Wigtownshire, brought an action in the Sheriff Court of Dumfries and Galloway, at Stranraer, against Ewen MacLeod, tenant of the farm by virtue of a lease entered into between Andrew Kenneth M'Douall and himself dated 23rd August 1943, (1) for declarator that the defender, by allowing one term's rent to remain unpaid for a period exceeding three months after it became due, had thereby incurred an irritancy of the lease and that the lease was accordingly at an end; and (2) for decree ordaining the defender to remove from the farm.
The facts were as follows:By lease dated 23rd August 1943 the late Andrew Kenneth M'Douall let the farm of Auchabreck to the defender.
The lease contained the following clause:"In the event of the tenant during the lease assigning this lease or subletting the lands or any part thereof or becoming insolvent, bankrupt, or notour bankrupt, or being divested of his estates or his effects or if any poinding of estates crop or stocking shall take place or in the event of his allowing one term's rent to remain unpaid for three months after the same shall have become due, or failing to reside personally on the farm, or using any of the subjects hereby let as a place for the sale of intoxicating liquors, then, and in any of these events, it shall be in the power of the proprietor by written intimation addressed to the tenant and posted in a registered letter, forthwith to put an end to this lease and to resume possession of the farm in whatever state it may then be, without any declaration or process of law for that effect, and neither the tenant or any of his creditors shall, in such an event, have any right or claim for meliorations or otherwise against the proprietor; and the tenant binds and obliges himself to flit and remove with his family, servants, goods, and effects, and to leave the farm void and redd to the proprietor or incoming tenant, at the expiry or sooner termination of the lease, without any previous warning or process of removal to be used to that effect."
The defender did not pay the rent due at Whitsunday 1948 within the following three months, and on 5th October 1948, the rent being still unpaid, the pursuers, the trustees of the late Andrew Kenneth M'Douall, wrote to the defender instructing him that they had decided to exercise their option and to terminate the lease. They brought the present action on 22nd October 1948, and the defender paid the rent on 9th November 1948, and thereafter lodged defences.
The defender pleaded, inter alia:"(3) The defender having paid the half year's rent due at the term of Whitsunday 1948, the irritancy incurred has been purged and decree of absolvitor should be granted and with expenses. (4) Pursuers having instituted proceedings of removing against the defender and he having paid the rent due with expenses, the pursuers are by statute barred from pursuing the present action."
On 18th February 1949 the Sheriff-substitute (Christie) repelled the defences and ordained the defender to remove from the farm.
The defender appealed to the Sheriff (Milne, K.C.), who on 9th May 1949 refused the appeal.
The defender appealed to the Court of Session, and the case was heard before the Second Division, without Lord Patrick, on 30th June and 1st July 1949.
At advising on 15th July 1949,
LORD JUSTICE-CLERK (Thomson).By lease dated 23rd August 1943 the late Andrew Kenneth M'Douall of Logan let the farm of Auchabreck to the defender. The lease contained the following provision:[His Lordship then quoted the provision dealing with the proprietor's power to put an end to the lease, and continued]The lease stipulates that the rent shall be paid at two terms in the year, Whitsunday and Martinmas, by equal portions.
The defender failed to pay the half year's rent due at Whitsunday 1948, and, on 22nd October, the rent being still unpaid and more than three months overdue, the pursuer raised the present action for the removal of the tenant on the ground that the lease had been thereby irritated. On 9th November the defender paid the rent which was in arrear and on the following day lodged defences in which he contended that the irritancy had been purged. The Sheriff-substitute repelled that defence and found for the pursuers. The Sheriff adhered and this appeal has been brought to us.
Our duty is to construe the terms of the lease. The passage which I have quoted sets out certain states of matters on the occurrence of which the landlord is entitled to bring the lease to an end. The defender admits that all these conventional irritancies other than the delay in paying rent are incapable of being purged, but argues that delay in paying rent is in an exceptional position and is always capable of purgation prior to extract. Why on general principles it should form an exception it is difficult to see. Dilatoriness in rent paying is of greater significance than just that the money arrives late. It may well be indicative of an inability to meet other obligations of the lease and of a financial stringency which may make the defaulter an unsatisfactory tenant. There is therefore nothing remarkable in a landlord seeking to stipulate that delay over a certain period should irritate the lease, and, if one finds such a stipulation embedded in a clause which narrates a series of conventional irritancies which clearly operate when default is incurred, it is easy to reach the conclusion that the stipulation was intended by the parties to have that effect. There seems no obvious reason why such a stipulation should be regarded as an exception and robbed of its purport. No doubt there is this difference between default in payment of rent and the other irritancies comprised in the clause, that the latter are events which happen once and for all and create situations which in their own nature are not susceptible of being purged. Indebtedness on the other hand is always capable of being purged. But I can see no reason in principle why this peculiarity attaching to delay in paying rent should prevent parties from agreeing to regard it as something entitling the landlord to bring the lease to an end.
I could understand an argument that, if all that the lease did was in substance to incorporate into its provisions the irritancies which the law itself implies, then it should be assumed that the parties meant no more than to draw attention to the legal irritancy. It is on that basis that some of the authorities save the case of a conventional irritancy which is no more than a copy of a legal irritancy and indicate that, where the conventional irritancy is only a copy, its inclusion in the lease adds nothing to its force. However, it was not argued that this stipulation fell within this doctrine and I need say no more about it.
Mr Carrick-Allan's argument was that a conventional irritancy of this sort was now regarded by the law as being in an exceptional position and that it could always be purged. In effect, he equiparated it to a legal irritancy, and his argument came to this that, on the authorities, no greater force was given to such a conventional irritancy than was given to a legal irritancy. This means that no landlord could by bargain add anything to what the law ordinarily implies. I did not understand Mr Walker to put his argument so high. Mr Walker did not deny that a landlord could stipulate that non-payment of rent was to result in discontinuance of the lease, but he said that on a sound construction of the present lease the purpose was more limited. It appeared from the lease, in his view, that what was intended was nothing more than an indirect mode of enforcing payment. What the contract, properly construed, pointed to was an additional sanctionor, to use his own phrase, a remedy for non-payment. But, while Mr Walker's argument was more elaborate than his junior's, I doubt whether it was any different. While Mr Walker left open the possibility that a landlord might by the use of appropriate words stipulate for the discontinuance of the lease on non-payment of rent, his answer to the suggestion that that was what this landlord had...
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