Adams, Tenant; Dunseathlandlord (No.2)

• Jurisdiction: Ireland
• Judgment Date: 16 May 1899
• Date: 16 February 1899
• Court: Court of Appeal (Ireland)

ADAMS,

TENANT;

DUNSEATH

LANDLORD (No.2)

Appeal.

Landlord and tenant —— Improvements — Increased letting value — Allowance to tenant in respect of improvement work — Balance of increased letting value.

Adams v. Dunseath 10 L. R. I. 109.

Blair v. Lord Gosford ibid., 453.

Ripley v. MacnaghtenUNK [1899] 2 Ir. R., p. 449.

504 THE IRISH REPORTS. [1899. ADAMS, TENANT ; DUNSEATH, LANDLORD (No. 2) (1). Landlord and tenant—Land Acts, 1881-1896— Improvements— Increased letting value—Allowance to tenant in respect of improvement work—Balance of increased letting value. In fixing the fair rent of a holding, the Land Commission adopted the principle that after making a fair and liberal allowance in respect of the tenant's improvement works, the surplus or balance of increased letting value was the property of the landlord and not of the tenant, and that the landlord was entitled to have a fair rent fixed in respect of that portion of his property. Upon a special case asking the question whether the principle, so adopted by the Land Commission, was right in law :—Held, by the Court of Appeal (diss. Lord Ashbourne, C., Porter, M.R., and Holmes, L.J.), that the question should be answered in the negative, the majority of the Court concurring in formuÂlating the following propositions :— 1. That in fixing the fair rent of the holding the tenant was entitled, in respect of the present capital value of his improvement works, to such return by way of annual allowance as the Land Commission should determine to be fair, and sufficient to satisfy the provisions of the Land Law (Ireland) Act, 1881, section 8, sub-section 9. 2. That if the allowance so made was measured by way of percentage, merely upon the present capital value of the tenant's improvement works, or of his expenditure in moneys numbered, labour, and skill, and if, after the allowance so made, any surplus or balance of increased letting value due to his improvements remained, the Land Commission was bound to have regard in dealing with such surplus or balance to the matters hereinafter mentioned. 3. That in fixing the fair rent of the holding, and in dealing with the surplus or balance aforesaid, the Land Commission was bound to have regard to the interest of the landlord and tenant respectively, and to consider all the circumstances of the case, holding, and district, including the amount of such (1) Before LORD ASHBOTTRNE, C., Sin P. O'BRIEN, L.C.J., PORTER, M.R., FAECES, C.B., FITZGIBBON, WALKER, and HOLIES, L.JJ. This Appeal was as a fact entitled Martha Smyth, Committee of the fortune and estate of Margaret Dunseath, a lunatic, Landlord; David Adams, Tenant ; but, for uniformity, the name under which the ease is reported in the Court below is retained. VoL. IL] QUEEN'S BENCH DIVISION. 505 surplus or balance, and the sources from which the same was derived ; treating Appeal. the latent or dormant resources of the soil, as let by the landlord to the tenant, 1899. as the property of the landlord, and treating the development of those resources ADAMS, by the improvement, as the act of the tenant. Tenant ; AM 4. That it was within the exclusive jurisdiction of the Land Commission, Di:INSE Landlord' having due regard to the foregoing principles, to consider and determine (No. 2.) whether, and in what proportions, the said surplus or balance should be divided between the landlord and the tenant in fixing the fair rent of the holding. Per Lord Ashbourne, C., Porter, M.R., and Holmes, L.J., that the principle adopted by the Land Commission was correct, and that the question submitted should be answered in the affirmative. APPEAL by way of case stated from the decision of the Irish Land Commission already reported (1). The case was stated in the following terms : " On the 10th day of October, 1896, the tenant in this case served the landlord with an originating notice of an application to the Court of the Land Commission to fix a fair rent for his holdÂing, payable during a second statutory term. We refer to this notice which bears date the 16th day of September, 1896. " It describes the lands as the lands of Kildowney, in the county of Antrim, and Poor Law Union of Ballymena. The other particulars as to the holding stated in the originating notice are as follows : " 1. Area in statute measure, . 42k. lx. 5p. Rent of holding, £32 15s. Od. Gross Poor Law valuation, £24 15s. Od. "2. The application came on to be heard before a Sub-ComÂmission sitting at Ballymena, duly delegated and authorised to decide the case. The Sub-Commission made an order bearing date the 7th day of April, 1897, to which we refer, fixing the judicial rent of the holding for the second statutory term of 15 years (commencing from the 1st December, 1896), at £17. " 3. In the schedule to their order, prepared and recorded by the Sub-Commission, under the provisions of section 1 of the Land Law (Ireland) Act, 1896 (to which schedule we refer), the Sub-Commission (among other things) set forth that 16 acres of the (1) [1898] 2 I. R. 709. THE IRISH REPORTS. [1899. holding had been reclaimed by the tenant at a cost of £6 per acre, that the present capital value of the aforesaid tenant's improveÂment was £144, the increased letting value due thereto £7 4s., and the deduction from the rent on account of such improveÂments £6. " 4. By notice bearing date the 26th day of May, 1897, to which we refer, the landlord stated that he was aggrieved by the said order, and required the case to be reheard before three Land Commissioners sitting together. " 5. Accordingly the ease was reheard before Mr. Justice Bewley, Mr. Commissioner Wrench, and Mr. Commissioner Fitz Gerald, Q.C., in Belfast, on the 3rd day of December, 1897. " 6. Mr. Justice Bewley having resigned the office of Judicial Commissioner before the judgment of the Court on such rehearing had been pronounced, and Mr. Justice Meredith having been appointed Judicial Commissioner, the case was, by consent of the parties, re-argued before Mr. Justice Meredith, Mr. Commissioner Wrench, and Mr. Commissioner Fitz Gerald, Q.C. " 7. On the hearing it was admitted that the holding is subject to the Ulster Tenant-right Custom. " 8. The question of law argued before us, and with which this case is conversant, arose in relation to the reclamation of certain portions of the holding, and the respective rights of the landlord and tenant in the increased letting value arising from such reclamation. " 9. Mr. Serjeant Dodd and Mr. Greer, on behalf of the tenant, argued that the tenant was,' entitled to a deduction or allowance equivalent to the entire estimated amount of the increased letting value inasmuch as (Counsel contended) such estimated amount would represent no more than a fair return to the tenant in the present case for the work he had executed. Moreover, the Ulster Custom applied, and on an estate where the custom prevails the landlord (Counsel contended), at any rate in early times, never sought to exact anything from the tenant in respect of the labour or capital expended by him. For these reasons (Counsel conÂtended) no question in the present case could arise with reference to any surplus or balance of increased letting value. But even assuming that a fair and proper return by way of annual allowance Vol,. II.] QUEEN'S BENCH DIVISION. to the tenant should be measured at a sum less than the entire inÂcreased letting value, the tenant (Counsel contended) had, under the authority of the former ease of Adams v. Dunseath (1), irrespective of, and apart from, the Ulster Custom, an interest over and above the allowance so made to him in respect of the imÂprovements he had effected, which, it was argued, would be more than sufficient to absorb any balance of increased letting value that might remain. "Mr. Matheson and Mr. Caruth, on behalf of the landlord, contended that the former case of Adams v. Dunseath (1) established that the only allowance or deduction in respect of improvements to which a tenant was entitled when fixing a fair rent for the holding was an allowance or deduction equivalent to a fair rate of interest upon the original cost of his improvement works, so far as the original value existed at the time of fixing a fair rent. Adams v. Dunseath (1) (Counsel contended) decided that the term " imÂprovements " in section 8, sub-sect. 9 of the Act of 1881 must reÂceive the definition given to the term in the Act of 1870, and that the only improvements in respect of which the tenant could claim exemption from rent, or an allowance or deduction in fixing a fair rent, were the same improvements for which he would be entitled to claim compensation on quitting his holding ; accordÂingly that such exemption allowance or deduction should not exceed a fair percentage on the original cost of the improvement works. " Any division of the surplus or balance of increased letting value between the landlord and tenant, or any further allowance to the tenant in respect of his improvements, or any other deducÂtion from, or diminution of, what would otherwise be the fair rent of the holding would (it was contended) be contrary to the Land Acts. " The existence of the Ulster Custom (it was contended) did not affect the principles applicable to the fixing of a fair rent. " 10. We were of opinion (and stated in our judgment deÂlivered on the 26th day of July, 1898), that the rights of the landÂlord and tenant, under the Land Law (Ireland) Acts, and the (1) 10 L. It. 109. 508 THE IRISH REPORTS. [1899. Appeal. principles upon which this Court should act in relation to the in 1899. creased letting value arising from reclamation were as follows :- ADAMS, " (a) That the tenant was entitled to a fair, and even a liberal, Tenant ; DUNSEATH, return by way of annual allowance in respect of the present capital Latzdlrd. (No. 2 value of his improvement works. .) " (b) That in ascertaining that capital value and measuring that allowance regard must be had...