WILSON v. BOYLE (1).

(1903. No. 1164.)

Landlord and tenant-Land Law (Ireland) Act, 1887, sect. 8—Surrender by middleman-Reduction of rent-Time for serving notice of surrender.

Defendant was tenant to the plaintiff under a sub-grant in perpetuity, dated the 2nd July, 1873, of lands in the county of Armagh, containing 45A. 3R. 1P. at the rent of £63 2s. 5d. At the date of the passing of the Land Law (Ireland) Act, 1881, he had sublet 42A. 1R. 6P. to five sub-tenants, whose rents amounted to £62 0s. 8d., retaining in his own hands 3A. 2R. 15P. After the passing of the Act of 1881 all the sub-tenants' rents were reduced by fair rent agreements filed in Court, each sub-tenant obtaining a reduction, the last reduction being made by agreement dated the 4th March, 1884, and this reduced the sub-tenants' rents to £43 15s., which was the total rental receivable by the defendant at the passing of the Land Law (Ireland) Act, 1887, out of the portions sublet. In 1898, 1899, and 1900 the tenants obtained further reductions on second term rents fixed by agreements filed in Court, which reduced the total rents to £35, the last second term reduction being made by agreement dated 2nd August, 1900. On the 27th April, 1900, the defendant served notice of intention to surrender, which the plaintiff refused to accept. The defendant then served notice to fix a fair rent on the 3A. 2R. 15P. in his possession, and the fair rent was fixed at £2 188. by the Land Commission on the 28th March, 1901; and on the 6th April, 1901, the defendant served a second notice of intention to surrender, tendered a deed of surrender, and paid all rent down to the 1st May, 1901. The plaintiff refused to accept the surrender, and sued for rent accrued down to November, 1902

Held, by the King's Bench Division (Palles, C. B., and Barton, J.; Andrews, J., diss.), that inasmuch as the rent receivable by the defendant at the passing of the Land Law (Ireland) Act, 1887, from the portions sublet had been reduced to a sum less than the rent paid by him, notice of intention to surrender should have been served by the defendant within nine months after the passing of the Act; that no new right of surrender arose on the subsequent reductions, or on the fixing of a fair rent on the part sublet; and that therefore the notice of intention to surrender had not been served within

(1) In the King's Bench Division, before PALLES, C.B., and ANDREWS and BARTON, JJ.

K. B. Div. 1903. June 23, 24, 29.

Appeal. Dec. 10, 11,

15.

K. B. Div. the time prescribed by sect. 8, sub-sect. 8, of the Land Law (Ireland) Act, 1903. 1887, and the defendant was liable for the rent sued for.

WILSON

v.

BOYLE.

Held, by the Court of Appeal (reversing the judgment of the King's Bench Division), that the notice of surrender served on the 6th April, 1901, was served in sufficient time within sect. 8 of the Land Law Act of 1887, and that the surrender was good.

MOTION to set aside judgment entered for the defendant by Wright, J., at the trial of the action and to enter judgment for the plaintiff.

By sub-grant in perpetuity dated 2nd July, 1873, G. A. Armstrong and Nathaniel Caldwell granted to Thomas Simpson 45A. 3R. 21P. of the lands Farmacaffley, in the county of Armagh, subject to the yearly rent of £63 2s. 5d.

The estate and interest of the grantor under this sub-grant became vested in the plaintiff, and of the grantee in the defendants. The greater part of the holding, viz. 42A. 1R. 6P. was sublet to five tenants, under five separate tenancies, and only the residue, 3A. 2R. 15P., remained in the possession of the defendants. The aggregate of the rents payable by these five tenants to the defendants at the time of the passing of the Land Act of 1881, was £62 0s. 8d. After the passing of that Act these five tenants got fair rents fixed by agreements duly filed in the Land Commission Court, the dates and particulars of which were as follows:

1. Terence and James Curran's rent, originally £17 78. 9d. was fixed at £13 7s. 9d. under originating agreement dated the 6th December, 1883.

2. James Cunningham's rent, originally £10, was fixed at £6 10s. under originating agreement dated 3rd April, 1883.

3. James Moon's rent, originally £14 10s 10d., was fixed at £9 10s. under an originating agreement dated 21st May, 1883. 4. Ellen O'Hare's rent, originally £12 0s. 10d., was fixed at £7 10s. under originating agreement dated the 4th March, 1884. 5. John Brooks' rent, originally £8 18. 3d., was fixed at £6 17s. 3d. under originating agreement dated the 28th February, 1884.

These fair rents made a total of £43 15s. receivable by the middleman from his five sub-tenants for the first term.

In 1898, 1899, and 1900, second term rents were fixed by

1903. WILSON

fair rent agreements duly filed in Court, the rents being in each K. B. Div. case further reduced. The last of these second term agreements was dated the 2nd August, 1900, and filed in the Land Commission Court on the 14th November, 1900. The total sum receivable by the defendant from these second term rents was £35.

The defendant served notice of surrender on the 27th April, 1900, which the plaintiff declined to accept, and on the 30th June, 1900, the defendant served an originating notice to fix a fair rent on the portion of land, 3A. 2R. 15P., in his possession, and on the 28th March, 1901, an order was made fixing the fair rent of this portion at £2 188. On the 6th April, 1901, the defendant served a second notice of surrender, and subsequently tendered a deed of surrender, and offered to pay all rent due up to the 1st May, 1901. The plaintiff refused to accept the surrender. The defendant refused to pay any rent subsequently. In an action for one and a-half year's rent of the lands, down to November, 1902, tried before Wright, J., without a jury, the Judge entered judgment for the defendant.

Jellett, K.C., and Poole, for the plaintiff.

Cherry, K.C., and Fetherstonhaugh, K.C. (with them C. Murphy), for the defendant.

BARTON, J.:

Cur. adv. vult.

This case turns on the construction of sect. 8 of the Land Law (Ireland) Act, 1887, and principally of sub-sect. 8 of that section. That section gave certain rights of surrender to middlemen all or part of whose holdings were sublet, and whose sub-rents had been before the passing of the Act, or might afterwards be, reduced to a certain point. In the case of a middleman, all of whose holding was sub-let, sub-sect. 1 provided that he might surrender when the rent received by him "has been reduced by the Court, or with the sanction of the Court, to a sum less than the rent which he pays." In the case of a middleman part only of whose holding was sub-let, which is the present case, sub-sect. 2 provided that he might surrender where "the rent received by the middleman for the part so sublet has been reduced by the Court, or with the

v.

BOYLE,

June 29.

1903.

WILSON

K. B. Dir. sanction of the Court, so that when added to the fair rent of the part of the holding which is not sublet, to be ascertained and determined by the Court as hereinafter mentioned, it is of less amount than the rent paid " by him.

v.

BOYLE.

Barton, J.

Three other sub-sections may usefully be referred to before coming to the 8th sub-section, on which this case mainly turns. Sub-sect. 3 provides that "in computing the amount of rent received by a person entitled to surrender, twenty per cent. deduction from the gross rent shall be allowed for cost of collection and other outgoings." Sub-sect. 9 provides the machinery for ascertaining the fair rent of the part of the holding not sublet, by giving the Land Commission jurisdiction "to ascertain and determine the fair rent of the part not sublet, as if such part constituted a holding, and the person claiming to be entitled to surrender were the tenant, and the person to whom the surrender is proposed to be made were the landlord, of such holding." Sub-sect. 10 provides that on surrender "all sub-tenants of the person surrendering shall thereupon become tenants to the person to whom such surrender is made, at the rents and subject to the conditions of their sub-tenancies under the person so surrendering."

All the provisions which I have read are in favour or relief of the middleman. But it is obvious that without some protection for the superior landlord this section might open the door to great risk of injustice to him. He has no knowledge, and is entitled to no notice, of the proceedings or agreements between the middleman and his sub-tenants. He has no means of checking or even of knowing the rents and conditions, or the changes from time to time in the rents and conditions, of the sub-tenancies. Accordingly, when this relief was given to the middleman it was only just that some right should be given to the superior landlord of challenging transactions which might have been, between 1881 and 1887, or might afterwards be, procured by collusion or undue influence, or be otherwise inequitable. To effectuate such a purpose, it would be necessary that the superior landlord should have notice of the reduction of rent on which the right to surrender was founded within such reasonable time as would enable him, if so disposed, to challenge effectively the transaction upon which the middleman's right to the statutory privilege depended.

1903. WILSON

v.

BOYLE.

Accordingly, as it seems to me, sub-section 8 was inserted in K. B. Div. section 8 for the protection of the superior landlord. Sub-section 8 provides that "the person to whom a surrender is proposed to be made shall not be bound thereby, unless written notice of the intention to surrender be served within nine months after Barton, J. the passing of this Act, or within nine months of the making of the reduction of rent upon which the right to surrender is founded, whichever shall last happen," and the sub-section goes on to provide that "the person to whom a surrender is proposed to be made may apply to the Court to restrain the surrender, upon the ground that the order of the Court reducing the rent has been procured by collusion or other undue means, or that for any other reason the surrender is inequitable." This latter portion of sub-section 8 was not alluded to in the argument, but it seems to me to explain, to some extent at all events, the first part of the sub-section. It seems to me that the words "the order of the Court reducing the rent " in the latter part of the sub-section correspond to the words, "the making of the reduction of rent" in the earlier part of the sub-section. One reason for requiring the notice of intention to surrender to be served within a limited time after "the making of the reduction of rent upon which the right to surrender is founded" appears to have been to enable the superior landlord, while that reduction of rent was recent and fresh, to inquire and ascertain whether there were any grounds for exercising his right of moving to restrain the surrender. The right to move to restrain the surrender would be nugatory if it were not accompanied by an antecedent right to have reasonably prompt notice of the reduction of rent upon which the middleman's right was founded. There would be no necessity for providing that the notice should be within nine months of the fixing of the fair rent on the portion sublet, because that proceeding would be by originating notice served upon the superior landlord. But the reduction of rents of the sub-tenants would be behind his back, and it would be important to have prompt notice of the reduction of rent upon which the middleman's right to surrender was founded.

Such being the provisions of this section, I think that the purpose and meaning of sub-section 8 becomes tolerably clear.