Stobbs & Sons v Hislop
| Jurisdiction | Scotland |
| Judgment Date | 06 February 1948 |
| Date | 06 February 1948 |
| Docket Number | No. 23. |
| Court | Court of Session (Inner House - First Division) |
1ST DIVISION.
Landlord and Tenant—Rent—Retention of rent—Statutory rent restriction—Conditions of statutory tenure—Certificate that dwelling-house not in reasonable state of repair—Statutory tenant claiming common law right of retention—Whether retention consistent with statutory provisions—Increase of Rent and Mortgage Interest (Restrictions) Act, 1920 (10 and 11 Geo. V, cap. 17), secs. 2 (2) and 15 (1).
The Increase of Rent and Mortgage Interest (Restrictions) Act, 1920, by sec. 2 (1) (c) and (d), permits certain increases on the standard rent of a dwelling-house, and, by sec. 2 (2), provides for the suspension of these increases if the house "is not in all respect
reasonably, fit for human habitation, or is otherwise not in a reasonable state of repair." Sec. 15 enacts:—"(1) A tenant who by virtue of the provisions of this Act retains possession of any dwelling-house to which this Act applies shall, so long as he retains possession, observe and be entitled to the benefit of all the terms and conditions of the original contract of tenancy so far as the same are consistent with the provisions of this Act."A tenancy agreement provided for payment of a monthly rent which represented the standard rent under the Rent Restrictions Acts, the permitted increases, and the occupier's rates. The landlords, having been, served with a certificate that the house was not in a reasonable state of repair, instead of executing repairs reduced the rent voluntarily by an amount equal to the permitted increases. The tenant paid the reduced rent for a few months, but subsequently continued to occupy the house without paying any rent, and, having been served with a notice to quit, contended that he was entitled to retain possession of the house and at the same time to withhold payment of all rent by virtue of his common law right of retention.
In an action of summary removing at the instance of the landlords,held (diss. Lord Keith) that retention of rent was an equitable remedy which, apart from express provision, was not a term or condition of a contract of tenancy, and that in any event, even if it could be regarded as an implied term or condition of the original contract in this case, such a term or condition was inconsistent with the statutory provisions and could no longer be relied on by a tenant who was claiming the statutory right to possession; and warrant of ejection granted.
Thomas Stobbs & Sons brought an action of summary removing against William Hislop in the Sheriff Court at Glasgow.
The circumstances, which are more fully referred to in the opinions of the Judges, were briefly as follows:—The pursuers were factors of a house in a tenement in Glasgow which had been let to the defender on 28th June 1940 on a monthly tenancy at a rent of 23s. 2d. The house was subject to the Rent Restrictions Acts and also to the House Letting and Rating (Scotland) Act, 1911; and the rent was made up of the standard rent under the Rent Restrictions Acts, the increases permitted by section 2 (1) (c) and (d) of the Act of 1920, and the occupier's rates. In May 1945 the defender served on the pursuers a certificate by the sanitary authority to the effect that the house was not in a reasonable state of repair, and that specified repairs were required. These were not executed by the pursuers, and in July 1945 the pursuers gave the defender the benefit of section 2 (2) of the Act of 1920 by voluntarily reducing the rent to 16s. 6d. as from the date of the certificate. The defender paid the reduced rent for the period ending 28th August 1945. After the date he paid no rent but continued to occupy the house. A year later the pursuers served him with a notice to quit, and brought their action of summary removing.
The pursuers pleaded:—"(1) The defences are lacking in specification and are irrelevant. (2) The defender being in arrears of rent lawfully due by him in respect of said house, the pursuers are entitled to decree of ejection as craved. (3) The pursuers, having allowed voluntarily a reduction of rent of 40 per cent, and the defender not having paid the lawfully reduced rent due by him and being in arrears therewith, are entitled to decree as craved with expenses."
The defender pleaded:—"(1) The pursuers' averments are irrelevant. (2) The pursuers having failed to make the premises wind and water tight and maintain same in the like good condition, defender is entitled to withhold payment of rent until pursuers carry out their obligation, and decree of ejection should not be granted as craved. (3) The house in question not being in a condition fit for human habitation, the pursuers are not entitled to claim, and the defender is not liable to pay, the sum sued for. (4) The pursuers being in breach of their contract of tenancy, and also of a statutory duty by their failure to maintain said premises in a condition reasonably fit for human habitation under the Housing (Scotland) Act, 1925, section 1, are barred from insisting in payment of rent until their said duties are carried out and from ejecting the defender as craved."
On 27th December 1946 the Sheriff-substitute (N. M. L. Walker) repelled the first plea in law for the pursuers and, before further answer, allowed a proof, appointing the defender to lead in the proof.
The pursuers appealed to the Sheriff, and on 5th February 1947 the Sheriff (Sir A. C. Black, K.C.) recalled the interlocutor of the Sheriff-substitute, sustained the second and third pleas for the pursuers, repelled the defender's pleas, and granted warrant of ejection.
The defender appealed to the Court of Session, and the case was heard before the First Division on 12th December 1947, when the Court made avizandum. Thereafter the case was put out for further hearing, the purpose of the further hearing being stated as follows in a note issued by the Lord President on 19th December,—
At advising on 6th February 1948 (when Lord Carmont was present and Lord Keith was absent),—
LORD PRESIDENT (Cooper).—This appeal is presented as a test case to raise a question which was rightly described as of wide general importance.
The facts which emerge from the pleadings are these: The landlords let a house in a Glasgow tenement of twenty houses to the tenant on 28th June 1940 on a monthly let at a rent of 23s. 2d. per month. The house is subject to both the Rent Restrictions Acts and the House
Letting and Rating (Scotland) Acts. The 23s. 2d. thus represents (a) the standard rent, plus (b) the permitted increases, plus (c) the occupier's rates, for which the landlord is accountable to the local authority. In May 1946 the tenant served on the landlords a certificate by the sanitary authority to the effect that the house was not in a reasonable state of repair, and that specified works (including replastering and pointing of walls) were required. These repairs have not been executed; and, comparing their probable cost under present conditions with the exiguous net return which this house must yield, I am not surprised. In July 1945 the landlords in substance conceded to the tenant the benefits of section 2 (2) of the Act of 19201 by agreeing to forgo the 40 per cent increase permitted under the! Act, and by adjusting (retrospectively to 28th April) a reduced rent of 16s. 6d. per month inclusive of occupier's rates. Since August 1945 the tenant has paid no rent to the landlords, but has continued, and continues, to occupy the house, which according to his averments is unfit for human habitation. In August 1946 the landlords served a notice to quit, and since then the tenant has retained possession as a statutory tenant under the Acts, and has also retained the whole rent in respect that the landlords have failed to make the premises wind and water tight and to maintain them in a tenantable condition. Can he do so? The Sheriff-substitute thought that he could, and the Sheriff that he could not.The house is evidently in an advanced state of structural decay, and the standard rent is eloquent as to the class of property to which the house belongs. It is notorious that there is a great deal of such property in urban Scotland, which under happier conditions would have been demolished long ago. The solution of the wider problem is no concern of ours, but its existence invests this test case with great importance, for housing conditions to-day are infinitely more acute than when the common law of retention of rent was developed or even when the Rent Restrictions Acts were first passed.
In the Courts below and before us the matter was approached from the standpoint of section 15 of the Act of 1920, subsection, (1) of which enacts that "a tenant who by virtue of the provisions of this Act retains possession of any dwelling-house to which this Act applies shall, so long as he retains possession, observe and be entitled to the benefit of all the terms and conditions of the original contract of tenancy, so far as the same are consistent with the provisions of this Act." This provision has given rise to "doubtful questions," and different views have been expressed as to its effect—Phillips v. CoppingELR.2 It seems to be accepted, and in any event I so hold, that the "original contract of tenancy" means the lease under which the tenant possessed immediately before he converted himself into a statutory tenant by asserting his rights to retain possession in defiance of a notice to quit. That means in this case the monthly let at 16s. 6d. per month. The
argument for the tenant was (1) that his right of retention of rent under appropriate circumstances constituted one of the terms and...To continue reading
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