By the

SOME ASPECTS OF RENT RESTRICTION in actual occupation. Thus, if a tenant of

premises were lawfully to sublet the whole of LAW.

the demised premises, whether to one person By THEO. SOPHIAN, of the Inner Temple, or to several persons, on the expiration of the Barrister-at-Law.

contractual tenancy he would not be able to IV. PERSONS WHO ARE PROTECTED BY THE Acts. invoke for himself the protection of the Acts,

although his undertenant no doubt would be It now becomes necessary to consider the protected and would become the statutory various cases in which a person may be entitled tenant of the head lessor. to the protection of the Acts.

It may be stated as a general proposition In the first place, a distinction should be drawn that, in order to claim protection under the between the 76 contractual ” tenant on the one Acts, it will be necessary to shew that there hand, and the statutory tenant on the other. was at some time a contractual tenancy, under

contractual tenant ” I mean a person which the claimant derives his statutory title. whose possession of premises is governed and It is quite clear that the Acts do not protect controlled by a lease or tenancy agreement, a trespasser, though in this connection reference although such lease or tenancy agreement will must be made to Remon's case ([1921] 1 K.B. be subject to the restrictive provisions of the 49), which at first sight might appear to have Acts ; while by the “statutory” tenant I mean decided that even a trespasser may be entitled the person whose sole right to possession or to rely on the Acts. In that case it will be occupation rests on the Acts themselves. An remembered that the tenant's term had expired example will make this distinction clearer. Qon the 24th June 1920, but the tenant had, is tenant under a three years' agreement of nevertheless, continued in occupation against certain premises, coming within the operation the will of his landlords until the 2nd July of the Acts. During these three years his 1920, that being the date on which the premises tenancy will be a contractual one; but on the in question first came within the protection expiry of the term, if he continues in possession of any Rent Act (the Act being the Act of without entering into any new contractual 1920, which came into operation on the 2nd July arrangement with his lessor, his occupation 1920). On the same day the landlords entered will be merely that of a statutory tenant. the premises in the defendant's absence and

That this distinction is of importance and obtained possession. The Court of Appeal should carefully be borne in mind, becomes easily nevertheless held that the tenant was entitled apparent from a consideration of the following to the protection of the Acts, and that the matters: In the absence of any agreement to landlords were obliged to allow him to re-enter the contrary, a tenant has in general the right into possession. The meaning there given to to assign or to sublet. If, therefore, an assign- the term “tenant," as used in the Rent ment or subletting is effected while the con- Restrictions Act, is instructive. “ It is clear,” tractual tenancy is still running, the assignment Lord Justice Bankes said (at p. 54), that in or the subletting will be perfectly valid, and the all the Rent Restrictions Acts the expression title of the assignee or of the sublessee will be tenant' has been used in a special, a peculiar, a good and lawful one. Now assume that the sense, and as including a person who might be assignment or subletting took place while the described as an ex-tenant, someone whose tenancy was a purely "statutory one in the occupation had commenced as tenant and who sense I have indicated above. One will be had continued in occupation without any legal immediately faced with the decision in Keeves right to do so, except, possibly, such as the Acts v. Dean and Nunn v. Pellegrini ([1924] 1 K.B. themselves conferred upon him.” 685), and no conclusion can be arrived at other It will be necessary, therefore, to see whether than that the title of the assignee or sublessee the relationship of landlord and tenant existed, is a bad one, inasmuch as the statutory tenant and if such relationship existed, it will be according to that decision cannot assign or immaterial whether the tenancy was for a term (semble) sublet. Therefore, the assignee or the certain, or whether it was a periodic tenancy sublessee, in the latter case, cannot rely on the (e.g. from year to year). protection that might otherwise have been On the other hand, although it has been afforded by the Acts, inasmuch as their tenancies held that a tenant at sufferance is entitled to have not been lawfully created (see sections 5 rely on the Acts (Dobson v. Richards, [1919] (5); 12 (1) g; and 15 (3) of the Act of 1920). W.N. 166), it has been held that a tenant at

Again, it should be observed, that whereas will, with no rent reserved, is not entitled to the contractual tenant is entitled to possession such protection (Commrs. of H.M. Works v. of the premises, even though he does not himself Hutchinson, 1922, S.L.T. (Sh. Ct. Rep.) 127). actually occupy the premises, the statutory Reference may also be made to Brake v. Ward tenant will be protected only so long as he is (1922 (L.J.), 11 County Court Reporter, 74),

where a purchaser, who had been let into It is further submitted, if this view is correct, possession pending completion of purchase, that whether a statutory tenant dies testate was regarded as being in the position merely or intestate, section 12 (1) (9) must apply. of a tenant at will with no rent reserved, and The rights, if they may be so described, of & as such not entitled to claim the protection statutory tenant, are not rights of property, of the Acts.

notwithstanding what Parkinson v. Noel ([1923] Interesting questions often arise as to whether 1 K.B. 117) may appear to have decided. As a servant who occupies premises provided by Lord Justice Scrutton said in Keeves v. Dean, his master occupies as a servant merely, or as the rights of a statutory tenant are negative a tenant. The test that it is necessary to rights, rights which are personal to him and apply in order to determine the character of to him alone ; and if a statutory tenant cannot the occupation in each case is briefly this : assign or sublet, it is difficult to see how he If it is necessary for the due performance can transmit by will any interest in these of his duties that the servant should occupy statutory rights. If, therefore, one were to certain premises, or if the servant is required to confine the operation of section 12 (1) (9) to occupy premises in order that he may perform cases where the statutory tenant had died his duties more satisfactorily, his occupation intestate, one would be faced with the absurd will be in the capacity of a servant; but if he position that the widow or other relative of is permitted merely to occupy the premises, bis the statutory tenant would be deprived of the occupation will be that of a tenant (Mayhew protection conferred by section 12 (1) (9) V. Suttle, 4 El. & B. 347; White v. Bayley, where the statutory tenant had executed a 10 C.B. (N.S.), 227; R. v. Spurrel (L.R.), 1 Q.B. will which could not possibly affect his 72).

statutory rights in the premises in question. Reference should also be made to the case On the other hand, reference should be made of Marquis of Bute v. Plenderleith (1921, to Mellows v. Low (supra), where Macardie J. 58 S.L.R. 290 ; 1921 S.C. 281), where it was held ([1923]1 K.B. at p.526) that the above proheld that a gamekeeper occupying premises vision “paragraph (g) must be taken as applying for the purpose of his employment did not only in cases where there was no executor or occupy as a tenant; and also to the case of administrator, in other words, to cases falling Pollock v. Assessor for Inverness (1923, S.L.T. within paragraph (f),” and that the same rule 282), where a schoolmaster occupying a house would apply both to a contractual as well as belonging to the Education Authority, in virtue to a statutory tenancy.

But it is extremely of his office, was similarly regarded as not difficult to reconcile this view of the law with being a tenant.

the decision in Keeves v. Dean (supra). Where a tenant dies, it is clear that, in the I hope to deal with the position of subcase of a contractual tenancy, such tenancy tenants in a subsequent article. will vest in the executor or administrator of the tenant, as the case may be (Collis v. Flower, [1921] 1 K.B. 409; Mellows v. Low,

PRIVATE SALES OF HERITAGE [1923] 1 K.B. 522). If, however, the tenancy is a statutory one, then apparently the better

IN SEQUESTRATION. opinion would appear to be that the executor

It has recently been found necessary to of the administrator of the subtenant, as such, consider very closely some aspects of the rules will have no interest whatsoever in the statutory regulating sales of heritable property by private tenancy, but that the provisions of section 12 bargain by trustees in sequestrations. The (1) (g) of the Act of 1920, which appear to occasion is accordingly taken to deal with the have been specially intended to meet such a matter exhaustively. The statutory rule is case, will strictly apply. According to that in section 111 of the Bankruptcy Act, 1913, provision “the expression “tenant' includes along with which it is necessary to consider a the widow of a tenant dying intestate who was question which may arise, and has been raised, residing with him at the time of his death; under section 116. Section 111 reads : or where a tenant dying intestate leaves no widow, or is a woman, such member of the It shall be competent for the trustee with con. tenant's family so residing as aforesaid as may

currence of a majority of the creditors in number and be decided in default of agreement by the value, and of the heritable creditors if any, and of the County Court.”. With regard to the meaning Accountant to sell the heritable estate by private of the term family," as used in the above bargain on such terms and conditions regarding price

and otherwise as the trustee with the concurrence of provision, it should be noted that the Courts those parties may fix, and the concurrence of the have recently held in Salter v. Lask (41 T.L.R. Accountant shall be conclusive evidence that the 201) that that term' may include the husband concurrence of the requisite majority of creditors has of a tenant dying intestate.

a

are

Then section 116 provides :

proposal for a sale by private bargain shall have

been preceded by unsuccessful attempts to sell When any estate is sold publicly by virtue of this Act it shall be lawful for any creditor to purchase it will rarely happen that the trustee is prepared

by public roup; but as regards advertisements the same.

to sell by private

bargain until after he has done Following upon

this the Accountant's memo- | what he thinks proper in the way of giving randum for the guidance of trustees is in the publicity to the matter by a reasonable amount following terms :

of advertising The Accountant requires the trustee (1) to exhibit

COMBINED SALES. -Cases occur in which the the missives of sale shewing the terms and con

full value of two heritable assets can be obtained ditions of the proposed sale ; (2) to exhibit a valua- only by selling them in combination. In that tion or other satisfactory evidence of the value of the case there may be difficulties regarding the subjeots proposed to be sold; (3) to exhibit minutes apportionment of the price when different of creditors and commissioners or other evidence that properties are charged with different bonds, the creditors and commissioners approve of the pro- and it will not be safe for the trustee to move posed sale ; (4) to lodge with the Accountant a list until he is satisfied that these domestic questions of creditors, with the amount of their claims, shewing have been suitably adjusted so that the way may those who have concurred, and a certificate by the be clear if the sale proceeds. In like manner trustee that the list is a complete and correct one, and that the whole creditors holding heritable

there cases when the wisest course of securities affecting the subjects for sale, and that a realisation is to dispose of the buildings and majority, in number and value, of the ordinary goodwill, machinery, and stock, all in one lot creditors, have concurred in the proposed sale, and for a cumulo price, and there again the same in the terms and conditions of it. If the trustee kind of question arises and must be handled satisfy the Accountant on these heads, the Account- in advance. ant will pronounce an order granting his concurrence,

COMMISSIONERS.-Section 111 does not in which

may be used as part of the title. The Accountant does not consider it expedient that he should terms require the consent of the commissioners,

which is in contradistinction to the requirement become a party to the disposition to the purchaser.

of their consent in another connection in PROVISIONAL SALES.—It will usually happen section 109. It will be observed that the that there has been a definite offer, for otherwise Accountant's memorandum expressly requires it is hardly to be expected that the trustee evidence of the commissioners' approval, but, as himself will take trouble, and put other people a majority is a quorum, it is not to be supposed to trouble, or will incur the expense of the that opposition by one commissioner would be various steps which are necessary, unless there fatal. Indeed, as the commissioners exist only is something definite on which to proceed. In to represent the creditors in the administration, the event of competing offers the natural and as the sale of heritable property by private solution is to have no private sale at all, but to bargain is a matter which is by the Act referred proceed to public roup. The trustee may even to the creditors themselves, it would appear to go further than mere negotiation, and may enter be the better opinion that, even if all the cominto a provisional contract, setting out price and missioners objected, that would not necessarily other conditions, but it must be in the clearest be fatal. Such objections might carry much terms provisional on the necessary consents weight with the general body of creditors, and being obtained, failing which the sale shall be might even influence the Accountant, but there at an end without

any

claim either side. are other considerations. If a case occurred in VALUATION.-- It is not provided in the Act which all the statutory consents were obtained that there must be a valuation, but the Act but the commissioners all objected, it is thought assumes that the trustee will conduct the that it would still be the commissioners' duty administration on ordinary business lines and formally to concur in the disposition, and that with prudence. The Accountant's requirement they must either do so or resign. of a valuation or other evidence of value is HERITABLE CREDITORS. - The Act requires therefore fully justified. It will not often the concurrence of the heritable creditors if happen that the implied conditions can

any."

The reasonable construction is that this deemed to have been observed unless skilled means those heritable creditors whose securities advice has been obtained as to value, and it may affect the particular property proposed to be be also as to other matters proper to be provided sold, and that is the view taken by the Accountfor on a sale of the particular property. There ant in the official memordanum.' So taking it, is no enactment or rule that the market shall the necessity for their consent is obvious, for first have been tested by public auction, or by without them the trustee cannot make a title the inviting of offers, or that there shall have by private bargain. Therefore, it matters not been any prescribed amount of advertising. on this head whether they have, or have not, It is not the official practice to require that a claimed in the sequestration. An inhibitor is

on

be

in a special position. The inhibition is a seem to be that the full £1000 must go into the security (Mitchell v. Motherwell, 1888, 16 R. 122) list of general creditors and also into the list and it is heritable, but the trustee can convey of consenters within that class, in order to or sell despite the inhibition (section 97), and ascertain whether the three-fourths majority is therefore it is thought that the inhibitor is not secured. The business in hand involves the a heritable creditor whose consent is essential. disposal of the estate subject to his security, The inhibitor makes his preference available which is the very case pointed at in section 55. in the sequestration by virtue of an affidavit No doubt that same creditor comes into the in which he claims for his debt and also for such class of heritable creditors also, and in that preferential ranking as flows from the inhibition, capacity his consent is essential to the transand in that way he comes into computation action going through, hoth because section 111 among the classes of creditors referred to below. says that it is so, and also because, without his It is unnecessary to consider the case of a bond consent and signature, the purchaser could not which is so postponed as to have no security at get a title. But that seems no reason why he all, for in a case like that it is not to be expected should not reappear on this different platform that the trustee and the general body of creditors also, and why his debt should not be reckoned should trouble themselves about the realisation. towards the three-fourths majority required. If, however, the bondholder has valued the If this be correct it leads one to point out that, security at nil, that practically wipes it out. if the voting became narrow, it would then be

A MAJORITY OF THE CREDITORS IN NUMBER open to the first bondholder for, say, £6000, AND VALUE.”—Those are the words in the Act, assumed to be absolutely safe, to lodge a claim but they are not exactly adopted by the Account- for voting only, valuing the security at £5000 ant, who varies them as follows: “A majority and claiming to vote upon £1000. That is in number and value of the ordinary creditors.” perfectly safe, for on such a claim the security Differing from the case of heritable creditors, cannot be taken over except with an addition regard is here to be had only to those creditors of 20 per cent., which would make up the full who have lodged claims.

£6000. The £1000 vote thus created might (1) Preferential Creditors, i.e. creditors in debts make all the difference. But, indeed, that stops of such a quality as to confer right to a pre- far short of what the result would apparently ference within the sequestration. They must be; for, in the first place, if the view suggested clearly be included in the computation of total above is correct, the first bondholder would on creditors, and, if consenters, in the three-fourths. this issue vote upon the full £6000, and further Section 118 of the Act sets out five classes that would appear to result no matter how small of preferential claims, and there are others. might be the alleged unsecured sum for which That section allows formal claims to be dispensed he claimed a general right to vote. Claims of with, but those creditors must have intimated that kind are frequently lodged in competitions claims in some form, and they come into the for trusteeship. computations.

(4) Other Secured Creditors, if claiming in (2) Deferred Creditors.—It is thought that the sequestration, are included in the comthese also must come into the computations, putation for their unsecured balances. This though' certainly they are not ordinary has reference to creditors holding securities over creditors.

heritable property other than the particular (3) Heritable Creditors, i.e. on the property property proposed to be sold, or over any other proposed to be sold. The Accountant's memo- part of the bankrupt's estate. randum excludes them from the computation (5) Small Creditors.--"No creditor whose debt of the three-fourths. Certainly they cannot be is under £20 shall be reckoned in number, included unless they have claimed in the but his debt shall be computed in value" sequestration. If they have claimed they must (section 96). be included for any unsecured balances claimed; (6) The Purchaser.-If he is a creditor, is he to but it is thought that it goes further, and that be included in the list of creditors and/or in the they must be included for the full amount of list of consenters? It is understood that the their debt. That is in virtue of section 55, question has never been raised. It is stated on which, after directing valuation and deduction the assumption of an affirmative answer to the of securities over the estate of the bankrupt, following question : proceeds "in questions as to the disposal or MAY A CREDITOR PURCHASE heritable estate management of the estate subject to his security when sold by private bargain? This is where he (the creditor) shall be entitled to vote for the it may be thought necessary to refer to the full amount of his debt.” If, for instance, the enactment in section 116 that it shall be lawful holder of a second bond for £1000 has valued the for a creditor to purchase any estate when sold security at £900 and claimed to vote and rank publicly. In a book of practice the observation for the balance of £100, the position would thus is made upon this enactment that it may be permissible to infer from it that, in the event of imprimatur of the Accountant's department, à private sale, a creditor is not entitled to where the whole matter is reviewed with the purchase, and reference is made to the case of benefit of long experience and expert knowledge Hay v. Rafferty (1899, 2 F. 302), which seems to of business. This is very different from what have little application. It is here submitted may happen in the case of a sale by auction, that the suggested inference is not admissible. where the transaction may be carried through The strangest possible way of legislating to the before anyone in the sequestration, except the effect that a private purchase shall be incom- trustee and the commissioners, has knowledge petent is to enact that a public purchase shall of it. So much on the negative side against be competent. The same section goes on to the suggestion of an implied prohibition against provide that on public sale the trustee or com- creditors purchasing privately, but there is also missioners, or law agent employed by the an affirmative side in favour, or in explanation, trustee, or any partner of such law agent, shall of the positive enactment that creditors may not be entitled to purchase. If, as regards the purchase at auction. This enactment can be first part of the section, it is permissible and traced far back in Scottish bankruptcy legislaobligatory to reason that an express affirmative tion, and it is understood historically to have carries an implied negative, then by parity of its origin in objections stated by outside parties reasoning the express negative in the second to the competency of a creditor competing at part of the section must carry an implied an auction of any part of the bankrupt's estate. affirmative. If the permission to a creditor to The enactment excludes any such objection, purchase publicly prohibits him from purchasing and it is levelled at the outside parties who privately, then it must follow that the pro- might have stated that objection. It is plain, hibition against the trustee and others purchas- however, that that objection can have no place ing publicly entitles them to purchase privately, in private sales, and it is submitted that that which is absurd and is certainly not law. This is why the enactment is limited to public sales. is as futile as to argue that because trustees This view was taken by Sheriff Cheyne in are expressly prohibited from purchasing shares Lindsay & Crookston v. Rae (1897, 13 Scot. Law in companies with unlimited liability, therefore Rev. 296), which related to personal estate. It they are authorised to do so in companies with is understood that this view has throughout limited liability, which is not law (Hardie v. been acted on in the Accountant's department Fulton's Trs., 1895, 2 S.L.T. 534). Such with reference to heritage, and was adhered a method of construing statutes cannot be to after special reconsideration on a recent accepted. It is sufficient to take what is challenge. enacted and to apply it, without seeking to import extensions, qualifications, and directly contrary enactments. This is said whether

THE DYVOUR'S HABIT. there may or may not seem to be grounds in

By WM. YEAMAN. reason which would have made such further legislation suitable and appropriate. It is There is a curious word in some of our ancient thought that those views are sound, and if Scottish statutes and in the Acts of Sederunt sound they are certainly sufficient to exclude of the Court of Session--Acts which were made the suggestion that section 116 contains, or by the Lords of Council and Session in virtue leads to, anything to prevent a creditor purchas- of the power vested in them by the statute ing heritable property by private bargain in a instituting the College of Justice in 1532, and sequestration. It may seem, therefore, un- by the subsequent statute of 1540, entitled necessary to go further, but in point of fact “Ratification of the Institution of the College

, there are strong reasons against any such of Justice.” The word referred to is “dyour inferred or hypothetical legislation. It is very or “dyvour," and it is used as synonymous much more reasonable that, under the scheme with the word “ bankrupt.” laid down in the Act, a creditor should purchase Some dubiety exists regarding the origin of privately than that he should purchase publicly. the word, and many conjectures as to its origin If he purchases privately the proposal that the have been made. property should be sold to him must be expressly Skene, in his exposition as to the meaning of and exhaustively considered within the domestic ancient Scottish legal terms in 1597, writes that tribunals of the sequestration. All possible a dyour or dyvour, otherwise a bairman, is interests are consulted—the heritable creditors, one who, being involved and drowned in debts who can stop it at once; all other creditors, who and not able to pay or satisfy the same, for must vote upon it specially, and must sanction eschewing of prison and other pains, makes it by the very substantial majority of three to cession and assignation of all his goods and gear one in respect of both number and value; and in favour of his creditors, and does his “ devour” over and above all that, there must be the land duty to them, proclaiming himself bairman