JAVAID AKRAM AND MRS ARSHAD ANWARD JAVAID
SHERIFFDOM OF LOTHIAN AND BORDERS, AT EDINBURGH.
2015SCEDIN11
Judgment of Sheriff T Welsh QC
In Summary Cause
Action for Recovery of Possession of
Heritable Property and Arrears of Rent
Javaid Akram and Mrs Arshad Anwar Javaid,
residing at Wakefield Avenue, Edinburgh.
(Pursuers)
against
Maqsood Ahmad, residing at Sleigh Drive,
Edinburgh.
(Defender )
Act: McLaughlin, Gillespie MacAndrew.
Alt: Thorley, Thorley Stephenson SSC.
Court ref: SD281/14
At Edinburgh, 9th February, 2015. The sheriff having resumed consideration of the cause:
FINDS IN FACT
- The Pursuers are heritable proprietors of shop premises at 10A Lochend Road South, Edinburgh. The premises are presently the subject of a 25 year, full repairing and insuring, commercial lease, to the Defender. The lease, (P5/1), is dated 17th and 19th February 2003.
- The Defender uses the property for his hot food takeaway/carryout business, known as The Madras Cottage.
- The let commenced on 14th December 2002. The ish is 13th December 2027.
- The parties agreed an initial rent of £200 per week which increments in stages on each triennial anniversary of the lease until it ends. During the period from 14 December 2008 to 13 December 2011 the rent agreed was £270 per week. During the period 14 December 2011 to 13 December 2014 the rent agreed was £300 per week.
- The Schedule attached to and incorporated into the lease provides that: “1. The weekly rent shall be payable by Bank Standing Order to the Landlord”.
- The Defender paid the rent in cash.
- Clause 11.1(a) of the lease provides the lease can be terminated when rent is 14 days overdue;
- Clause 11.1(a) of the lease provides the lease can be terminated if the Tenant has not complied with any terms of the lease.
- During the period from July 2011 to March 2014, 35 weeks of rent was unpaid by the Defender.
- During the period 2011 to 2014, no insurance premiums were paid by the Defender.
- An irritancy notice was served on the Defender on 14 March 2014 in respect of payment of rent arrears and insurance premiums. The unpaid rent for the lease stated in the notice is £10,444.
- No arrears of rent or insurance premiums were paid by the Defender to the Pursuers in the 14 day period set out in the irritancy notice.
- The lease was validly terminated on 31 March 2014.
- Since 1st April 2014 the Defender has been in unlawful occupation of the premises let.
FINDS IN FACT AND LAW
- The Defender being in breach of the terms of Clause 11.1(a) and Clause 11.1(b) of the lease by reason of non-payment of both rent and insurance premiums; and the Pursuer having complied with the terms of section 4 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, the lease was validly terminated on 31st March 2014.
- The Defender being in breach of the terms of Clause11.1 (a) and Clause 11.1(b) of the lease by reason of non-payment of rent and insurance premiums; the Pursuer is entitled, without prejudice to any future monetary claim, to payment of a sum limited to four thousand, seven hundred and forty four pounds (£4,744) of rent arrears, within the restricted competency of summary cause proceedings, with interest at 8% from citation until payment.
THEREFORE grants decree in favour of the Pursuer as craved, with expenses as taxed, on the summary cause scale, on a solicitor and client, client paying basis.
NOTE.
The Issue
[1] The Pursuers own a shop at 10A Lochend Road South, Edinburgh. They rent it to the Defender. He operates a fast food take away curry business in the shop. The Pursuers say he has not paid the rent and is 35 weeks in arrears. The Defender denies this and maintains the rent has been paid on time and in full. The Pursuers want their tenant out. No formal issue is taken about the notice procedure. Mr Thorley for the Defender conceded the due notice given by the Pursuer’s agents on 14th March 2014 complied with the minimum requirements laid down by law and the notice was valid. The issue before me is one purely of fact. Has the rent been paid? Is the tenant in breach of the lease? Has the lease been irritated? If breach is proved, repossession of the premises and recovery of back rent and insurance premiums, restricted to £4774, to keep the order within the summary cause limits, follows automatically. If the rent was paid the action falls to be dismissed and the lease continues unaffected.
The Process.
[2] I heard proof in this case on 10th September, 15th December and 16th December 2014. Mrs Mclaughlin appeared for the Pursuer. Mr Thorley appeared for the Defender. I was told the parties agreed the terms of the lease and the statutory notice procedure is conceded to be valid.
The Evidence
The Pursuer’s Proof
[3] Javaid Akram gave evidence. I only note the relevant aspects of his evidence. He is 45 years old. He is co-owner of the let property. He spoke to the terms of the lease. It is a full repairing and insuring, 25 year, commercial lease. It began in 2002 and was agreed to last until 2027. The rent is stepped up every 3 years. He spoke to the content of the lease. He also said the lease started well and there were no problems with payment until 2011. He deponed that the rent was initially paid every Sunday evening in cash by the Defender to the witness, or his brother-in-law, Mohammed Zaheer Anwar. That was the system. It was collected in 10A Lochend Rd South or the Defender came to the witness’s shop to hand over the money. The witness said he works in the Newsagent at 14 Lochend Rd South which is just round the corner from the shop which the Defender lets and runs as the Madras Cottage Takeaway. The rent was not collected anywhere else up to 2011. After 2011 his brother-in-law sometimes went to the Defender’s home to collect the rent. He spoke to the content of his rent diaries (P5/2/6) which contain entries recording the dates when payments were made between 1st January 2011 and 6th April 2014. He also spoke to a schedule (P5/4/9) which is a detailed tally showing the pattern of rent payment and the dates when rent was and was not paid. He confirmed that for the period from 31st July 2011 until 9th March 2014, on 35 weeks rent was not paid. He identified each day in the diaries when rent was not paid. The Defender always promised he would pay the rent when he failed to. For a time he would pay late. Sometimes the rent was paid in instalments. The annual insurance premiums were not paid between 2011 and 2014. By February 2011 the Defender’s electricity had been cut off. By March 2011 the witness said he had had enough. He had put up with unpaid, late paid and part paid rent for long enough. He instructed agents to commence repossession proceedings. The Defender last paid rent in the middle of February 2014. No receipts were issued to the Defender because the Defender had no records for his business. The witness gave evidence he knew the let shop had been vandalised in March 2014. He knew nothing about any suggested sale of the shop to a third party. The witness said he had asked the Defender for the back rent and premiums due many times. He spoke about a meeting between his father-in-law, Mohammed Anwar and the Defender in March 2014 but this came to nothing. He spoke to a letter from his then agents P5/1/4 Duncan and Wallace intimating the lease was irritated as at 31st March 2014.
[4] He was cross examined. He confirmed the Defender was a good paying tenant for 9 years. The witness said it was a cash operation. No paper rent receipts were issued. The Defender did not ask for any. The witness relied on his brother in law to collect the rent. The Defender’s gas and electricity were disconnected a few times between 2011 and 2014. He always banked the cash. The Defender did not want receipts. The Pursuer admitted he had not lodged rent records. The diaries were his records. He paid the insurance premiums for the shop between 2011 and 2014. He delayed taking legal action because he did not want to start a court case. The Defender had his electricity cut off in January 2014. He asked the Pursuer if he could run an electric line from his premises. The Pursuer wanted nothing to do with this suggestion. It was suggested the Pursuer wanted to sell the property and he had made up this story about rent not being paid. The witness denied this.
[5] Mohammed Zaheer Anwar gave evidence. I only note the relevant aspects of his evidence. He is the brother-in-law of one of the owners, Javaid Akram. He is 41 years old. His involvement was that he collected the rent. He went to the shop to collect the rent. He collected it in cash. He gave the money to Javaid who entered the payment in the rent diary. After 2011 there were problems. The rent would be late and have to be paid in daily instalments sometimes. Eventually the rent stopped altogether in 2014. Between 2010 and 2014 the shop was shut down by Immigrations Officials or because gas and electricity was cut off about 6 times.
[6] He was cross examined. He passed on all the rent to Javaid. The problems started in 2011. The rent was getting paid late. The witness never gave receipts for the rent. The Defender did not ask for any. Rent was last paid in February 2014. The Defender owed money to the gas and electricity companies. When the power was shut off he used a generator for power for the cookers. He knew nothing about vandalism at the shop. He was not questioned, himself, by Police about money laundering in 1999.
[7] Mohammed Yousaf gave evidence. I only note the relevant aspects of his evidence. He is 46 years old and a shopkeeper. He said he knew both the Pursuer and the Defender. He was not directly involved in collecting the rent but he knew about the vandalism to the shop in March 2014. He had phoned the Defender on behalf of the Pursuer to tell him about this event. He also spoke to a meeting in his own shop between the Defender and Mr Anwar who is the Pursuer’s father-in-law. He is the head of the family. This meeting was in March 2014. At it, the Defender admitted he was in rent arrears and owed 35 weeks rent. He admitted he owed the insurance premiums. He admitted he was in wider debt to the electricity company to whom he owed between £6000 and £8000. There was an argument about the debt. The Defender asked for financial help.
[9] He was cross examined. It was suggested the Defender was not angry at this meeting but that what actually happened is that he was threatened that if he did not pay the back rent he would be killed. The witness denied this. It was shortly after this meeting that the shop was vandalised it was suggested.
[10] Mohammed Anwar gave evidence. I only note the relevant aspects of his evidence. He is 70 years old. He is the father-in-law of the Pursuer. He is a retired shopkeeper. He attended a meeting with the Defender, Mohammed Yousaf, was there also. It was in March 2014 at Mr Yousaf’s shop. The unpaid rent and insurance premiums were discussed. The Defender admitted he owed the money. He was in debt. He owed as much as £30,000 to creditors. He asked for help. He asked if the lease could be transferred to relatives of a Mr Haffis. The Defender became agitated. The witness said he was not going to help him.
He was cross examined.
The Defender’s Proof
[11] Maqusood Ahmad gave evidence. I only note the relevant aspects of his evidence. He gave evidence using an interpreter. He is 43. He lives in Sleigh Drive. He is the owner of the Madras Cottage Takeaway. He spoke to the terms of the 25 year lease. He confirmed there was no problem until 2011. The witness wanted to assign his interest in the lease. The purser objected to this. Sales from the shop can be as high as £3,850 weekly. He can make a profit of £800-900 weekly. He has paid his rent and the premiums in cash. The Pursuer never gives receipts. Witness had never seen the rent diaries. Witness paid the insurance every year. The Pursuers are covering up fraud and money laundering. All the figures are made up. The witness says he paid the rent. Witness never missed a payment. Sometimes Zahid would come to Craigentinny Road to collect the rent. The electricity in the shop was cut off but reconnected when the bill was paid in 2014. There was a meeting in March 2014. The Pursuer’s family said the witness could not sell the shop. Witness wanted to assign the lease to return to Pakistan to see his mother. The shop was broken into and papers were taken away.
The witness was cross examined. He said he was comfortable doing business in cash. The figures are all made up. The witness has paid the Pursuers thousands of pounds.
[12] Mubarak Ali gave evidence. He works part time at the Madras Cottage. The shop is busy. There is plenty of money. The witness spoke to the system of paying rent. The Defender pays rent every Sunday evening. He knows nothing about arrears of rent. Twice Zahir came to the house at Craigentinny to collect the rent.
He was cross examined.
[13] Mohammed Iahrar gave evidence. He works in the Madras Cottage every Sunday evening. Zahir comes to collect the rent he said. He did not see everything that went on in relation to rent collection.
He was cross examined.
Submissions
[14] Mrs Mclaughlin moved for decree with expenses on an agent and client basis because of the additional expense caused by the Defender’s conduct of the case. The Pursuer relied upon s.4 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985; Shetland Leasing –v- Property Developments Limited 2014 Hous. L.R. 9 and Scott –v- Muir 2012 S.L.T. (Sh Ct) 179. However no technical point was taken by the Defender in relation to due notice. She invited me to accept the Pursuer and his witnesses as credible and reliable.
[15] Mr Thorley invited me to dismiss the case with expenses as assessed to the Defender on a number of grounds:
- The Schedule to the Lease provides for payment of rent by standing order but the landlords only accepted cash payment. The landlords have not produced evidence of bank records or accounts showing how the rent was received in a regular manner. There are no receipts for the rent and there is no rent book. This is at the very least suspicious and ought not to be accepted uncritically. One might expect more independent proof of non-payment of rent.
- Proof of non-payment comes from a single source, Mohammed Zahir. His evidence must be accepted in full before decree can pass.
- The absence of receipts from the landlord has prejudiced the Defender. If receipts are not issued how can he show rent is paid?
- The Pursuer’s evidence is incredible in relation to his failure to action rent recovery for many weeks over a number of years as the Defender it was said fell into arrears. This is not credible. There is no evidence the Pursuers tried to make formal recovery before March 2014.
- The Defender’s evidence was that in relation to the 10 March meeting he was looking to sell the premises because he wanted to return to Pakistan.He was aware that he was entitled to sell and that he had secured an offer to purchase the lease at £60,000.The Pursuers return on any such assignation would be a figure significantly less than that (£3,500) based on the lease.Accordingly therefore there would be substantial financial benefit for the Pursuers to terminate the lease as opposed to allowing an assignation to take place.
Disposal
[16] I listened carefully to all the evidence and I listed to the arguments of the parties agents. I deal firstly with the argument made by Mr Thorley that the Pursuer’s business method of dealing in cash is problematic. I disagree. The schedule to the lease does indeed say ‘The weekly rent shall be payable by Bank Standing Order to the Landlord’. In my opinion that means the parties agreed that the lessee may arrange his affairs and pay his rent by standing order which the landlord would be bound to accept. In that way the lessee can protect his interest and readily demonstrate the rent has been paid. It is a sensible clause. It does not prohibit the landlord from dealing in cash, if the lessee wants to pay that way. Thus, nothing in my opinion, hinges on that provision.
[17] At the core of this proof is a clean, crisp, simple issue of credibility. I sat and listened patiently to all the witnesses over 3 days. The evidence was translated for the benefit of the Defender. I have no hesitation in preferring the evidence of the Pursuer and his witnesses. The Pursuer gave coherent straightforward evidence about the way he does business. He deals in cash and notes the rental payments in diaries. There is nothing objectionable to that in principle. He spoke to all the dates when rent was not paid. I believed him. His brother in law, Mohammed Zaheer Anwar, is the Pursuer’s rent collection agent. Equally, I believed him. He gave plain straightforward testimony in a measured way. He collected the rent and accounted to the Pursuer. I did not think he syphoned off paid rent from the Defender and deceived his brother in law, which was a suggestion hanging in the air at one point in the proof. He was honest, as was the Pursuer. I also believed the Pursuer’s father in law, Mohammed Anwar, who spoke about the March 2014 meeting with the Defender. He is the patriarch of the family and I did not consider it odd, as was suggested by Mr Thorley in cross examination, that he took, at one point, to do with the attempt to resolve the back rent issue with the Defender. He was transparently honest. It seemed to me there was a cultural issue. The head of the family became involved to try to sort out the problem of rent arrears. I believed the Defender admitted the arrears to those at the March meeting. I also believed Mohammed Yousaf who attended the meeting and heard the Defender admit he owed the rent arrears.
[18] I did not believe the Defender. He was dishonest and dissembling. He was completely disorganised and quite shambolic during the proof. He did not answer questions directly and gave irrelevant longwinded answers. He maintained steadfastly that he had paid the rent and this case was all lies made up against him. On one occasion he left the witness box in an agitated state and produced a newspaper from under the table which he wanted to show me. It seemed it contained irrelevant material about the Pursuer. This did not help his case. In my judgement it was always open to the Defender to organise his business affairs in such a way that he could pay the rent by standing order and be in a position to demonstrate he paid the rent regularly and was up to date. I consider this is basic business management. It is his responsibility to organise his business affairs in such a way that he can at least demonstrate he pays the rent. His own parole evidence in my opinion was worthless. The onus of proof is on the Pursuer to prove his case but the fact that the Defender is incapable of clearly demonstrating something as basic as regular rent payments, in my view, makes it easier to accept the Pursuer’s case which is at least based on a system, primitive though it may be.
[19] Around the core issue in this proof, which relates to breach of contract, a number of ancillary irrelevant distractions developed. I did not consider these to be helpful in deciding the issue. However, I can say I do believe the Defender was in such debt that his utilities were cut off periodically at the Madras Cottage. Also, I am inclined to think the Defender tried to persuade the Pursuer to run a power line from his shop to the Madras Cottage, at one point. I also think, though it is entirely irrelevant to my decision, that the Defender attempted to persuade the Pursuer and others, to inform the utility companies that there had been a change of lessee in order to have arrears written off and a new clean account created, to the advantage of the Defender. Nor do I think the matter of the assignation of the lease to a third party to be of any moment. This seemed to me to be a fantasy. I was equally unimpressed by the Defender’s unilateral attempt to smear the Pursuer as a drug dealer and money launderer during his evidence. However all of the side issues are but distractions because I believed the Pursuer and his witnesses on the relevant issue about non-payment of rent and insurance premiums and I disbelieved the Defender, on the core issue, about his suggested payment of rent and the four annual insurance premiums.
[20] I do not consider it necessary to make findings in fact about irrelevant collateral issues such as those mentioned above. I am not surprised that the Pursuer tolerated the Defender’s dilatory non-payment for as long as he did. The Defender always had an excuse. The families knew each other. The business relationship went back many years. None of this surprises me. The Pursuer simply put up with partial, dilatory and finally non-payment longer than he should have and then eventually lost patience and raised this action for repossession.
[21] Accordingly, I intend to grant decree as craved.
Expenses
[22] Mr Thorley moved for the case to be dismissed with expenses as assessed by the clerk of court on the summary cause scale. Mrs McLaughlin moved for expenses to be awarded as taxed by the auditor of court, on an agent and client, client paying basis. She told me many hearings were caused in this case by the failure of Defender to instruct agents, properly. The first calling of the case was 24th April 2014. There was a hearing fixed on 2nd May, the Defender failed to enter an appearance. Decree was granted but successfully recalled on 9th May, with a proof hearing fixed for 19th June. The Pursuer duly attended with witnesses on that date for proof but the Defender was unrepresented. That diet was discharged and reassigned to 8th July when the Pursuer attended again with witnesses. The court was informed that new solicitors were instructed, the diet was discharged again and assigned of new to 4th August, when the Pursuer and witnesses attended yet again. The Defender’s solicitor then withdrew from acting and a new proof was assigned for 10th September with an incidental application hearing fixed for 29th August to ‘tidy up’ the pleadings. The case apparently called again on the 5th September for further procedure. I can only describe these repeated callings of the case and all the preparation that goes with them as a total waste of court time and resources, all caused by the Defender.
[23] In McKie v Scottish Ministers 2006 S.C. 528; 2006 S.L.T. 668, Lord Hodge sets out the law and practice which governs such an application:
“The law on this issue is well settled and may be summarised in the following five propositions. First, the court has discretion as to the scale of expenses which should be awarded. Secondly, in the normal case expenses are awarded on a party and party scale; that scale applies in the absence of any specification to the contrary. But, thirdly, where one of the parties has conducted the litigation incompetently or unreasonably, and thereby caused the other party unnecessary expense, the court can impose, as a sanction against such conduct, an award of expenses on the solicitor and client scale. Fourthly, in its consideration of the reasonableness of a party's conduct of an action, the court can take into account all relevant circumstances. Those circumstances include the party's behaviour before the action commenced, the adequacy of a party's preparation for the action, the strengths or otherwise of a party's position on the substantive merits of the action, the use of a court action for an improper purpose, and the way in which a party has used court procedure, for example to progress or delay the resolution of the dispute. Fifthly, where the court has awarded expenses at an earlier stage in the proceedings without reserving for later determination the scale of such expenses, any award of expenses on the solicitor and client scale may cover only those matters not already covered by the earlier awards.” This analysis was based on a consideration of British Railways Board v Ross and Cromarty CC, 1974 S.C. 27; Walker v McNeil, 1981 S.L.T. (Notes) 21; Plasticisers Ltd v William R Stewart & Sons (Hacklemakers) Ltd , 1972 SC 268; 1973 SLT 58 ; North East Ice & Cold Storage Co Ltd v Third 4 June 1996, unreported; Baker Hughes Ltd v CGC Contracting International Ltd, 2005 1 SC 65; 2005 SCLR 1084 and Ewos Ltd v Mainland [2005] CSOH 153; 2005 SLT 1227.
[24] In my judgment the additional callings in this case were entirely unnecessary and have put the Pursuers to additional avoidable expense. The Defender should not be allowed to get away with that, without some responsibility attaching to him, financially, as a sanction. His behaviour was both unreasonable and egregious. His conduct of the case by failing to instruct agents properly has caused additional unnecessary expense. No blame for any of this, attaches to Mr Thorley, who, in my opinion, was put in a difficult position by a very difficult client and who presented the case as well as it could be.
[25] Therefore, I will grant the Pursuer’s motion for decree as craved in its restricted form with expenses, as taxed by the auditor of court, on the summary cause scale, in term of rule 23.3A of the Summary Cause Rules 2002, on a solicitor and client, client paying basis,
Sheriff T Welsh QC
Edinburgh Sheriff Court
9th February 2015