CORRESPONDENCE.
HOW THE IRISH LAND BILL AFFECTS THE LAW AS TO TENANTS' IMPROVEMENTS.
Six,—Perhaps the best way to test the character of the Irish Land Bill is to consider how it would affect the fixing of rents if passed as it now stands.
Let us consider how a rent is arrived at under the existing Irish land laws. Let us suppose that a case is brought into Court, heard by the Assistant-Commissioners, and that the land is about to be inspected by them. A question as to im- provements arises. The tenant claims credit for something which he has done, which adds to the letting-value of the holding, and for which he claims to be allowed in esti. mating the amount of the rent. In the first place, it must be remembered that if no improvements are claimed or•. allowed for, the land is valued as it stands, the landlord getting the benefit of anything which may have been done to add to the value of the holding, but which is not proved, or made the subject of a special deduction from the rent. In the case put, the Court has to consider whether the claim of the tenant is for a legal improvement—one which can be allowed for within the meaning of the definition in the Acts as they stand. That definition is :—" (1) Any work which being executed adds to the letting-value of the holding on which it is executed, and is suitable to such holding ; also (2) tillages, manures, or other like farming works, the benefit of which is unexhansted at the time of the tenant quitting his holding." This definition, as interpreted by the Courts, credits the tenant with the cost of doing the work so far as such cost adds to the letting-value of the land. Every claim for improvements is accordingly limited and governed by this necessity,—that the "work " must have "added to the letting- value of the holding?' The Courts have, after a long series of years, come to consider improvements which " add to the letting-value" under certain well-defined heads, such as buildings, fences, and farm-roads—all of which are visible— and reclamation, drainage, and manures, which are not usually self-evident, and which are commonly proved by some one who has seen the work done. Any of these improve- ments, if proved and if not excepted from consideration by one of the various rules and provisions on the subject in the existing Acts, is allowed to the tenant. That is, the coat of doing the work, so far as such cost adds to the letting-value,. is estimated, and a percentage on such cost is allowed off the valuation of the holding. Thus, if the valuation of the holding is as it stands £20, and the tenant proves that he. has reclaimed two acres of land, at a cost of say £10 an acre, and made 100 perches of drains at a cost of 2s. a perch, or £10, the Court will proceed to deduct from the £20 valuation put on the holding as it stands, a sum of £1 (or 5 per cent. on the coat of the reclamation), and a sum of 10s. (or 5 per cent. on the drainage)—making the fair rent of the holding £1810s. If, however, the Court comes to the conclusion that the reclamation which costs £10 an acre has only added to the letting-value of the land a sum of 5s. a year, which would represent a capital expenditure of £5, the tenant is only credited with an expenditure of £5 an acre for his reclamation, and loses the other £5 of expenditure. In this case, instead of being allowed off the gross valuation a sum of 20s. for his reclama- tion, he is allowed only 10s. If, on the other hand, the ex- penditure of £10 an acre has raised the value of pk,e land from, say, 3s. to 15s., the tenant is only allowed 10s. (or 5 per cent.) on his outlay, and the landlord gets the benefit of the
remaining b. which has been added to the value of the land by the execution of the work.
In Mr. Morley's Bill, the definition of " Improvement " "includes every expenditure of capital or labour on or in respect of the holding which increases the letting-value thereof." Except that this definition omits the words in the old definition, that the work must be suitable to the hold- ing, words which have been given an interpretation resulting in much hardship, as where rent has been put on improve- ments made by the tenant which were considered to be too good for the holding, it differs little from that old definition. It has been objected that the new definition would allow the Court to take into account, as a reason for reduction of rent, ordinary tillages and labour in working the land. It is, of course, evident that ordinary tillage will not increase the letting-value of the land, as the land has no letting-value apart from its ordinary use as a farm. Besides, the existing d efinition is as open—if it is not more open—to such an interpretation, and no one has ever sought to apply it.
Having decided whether a certain work is an improvement, the Court has next to consider what amount of credit is to be given for it. In the illustration above given, it will be seen that a percentage—usually 5 per cent.—is now -allowed on the cost of the work, so far as such work adds to the letting-value, and that any additional value remaining over, after the percentage is deducted, goes to the landlord. This interpretation Lord Justice Fitzgibbon told
t he. Select Committee of the House of Commons, was not justified by the decision in "Adams v. Dunseath." It, how- ever, has been the interpretation adopted by the Land-Courts, and Mr. Morley now introduces a clause giving to the tenant any increase in value resulting from the making of an im- provement "beyond what the holding would let for without such improvement." If this is read to mean that the possi- bility of increasing the value of the land by an expenditure of labour and capital—in short, the improvability of the land— is to be taken into account in estimating what the holding would let for, it is only carrying out what Lord Justice Fitz- gibbon said was intended by the Court of Appeal in "Adams v. Dunseath."
At present it frequently happens that a tenant proves a certain improvement for which the Court cannot give him any credit owing to the application of the rules governing the giving of compensation for improvements to a tenant on quitting his holding, contained in Section 4 of the Act of 1870. Thus, drains more than twenty years old, any improve- ments except permanent buildings and reclamation in the case of holdings under lease for more than thirty-one years, any improvements made where the tenant held under a lease which prohibited him from claiming compensation if quitting his holding, cannot be taken into account so as to make a reduction from the gross valuation of the holding. Mr. Morley's Bill seeks to abolish all such exceptions from the principle that a tenant should not be rented on his improve- ments. It is evident that rules which may have been fair and just in restricting the right of the tenant on quitting his holding to demand payment from the landlord for works done by him, may be unfair and unjust if applied for the purpose of making the tenant pay rent on improvements admittedly made by him.
It frequently happens that improvements are found to exist on a holding which has been in the occupation of the tenant or his predecessors as far back as the history of the holding goes. The improvement may be a house. No one knows when it was built. The tenant may say that he was told by his father or grandfather that it was built by him. This is not legal proof, and in the absence of such, the holding is valued as it stands, a process which gives the landlord rent on all improvements not legally proved by the tenant. Section 5 of the Land Act of 1870 gave a presump- tion that all such improvements—definitely shown to have been made in the holding—are to be held to have been made by the tenant or his predecessors. The section, however, con- tained so many exceptions to the rule that its application was very limited. The present Land Bill sweeps away all these exceptions, and would give a general presumption in favour of the tenant, allowing the landlord, however, where the improve- ments were made before 1850, to give such information as may be available to show that the improvements were made by him. The opponents of the Bill now say that this rule would lead to " prairie-value," as under it the Court would assume that the holding was in some valueless condition at some prehistoric period. Any one acquainted with the method of Courts must, however, know that before a rule of presumption can be applied, the subject-matter must be shown to exist. A. house undoubtedly is an improvement which cannot be gain. said. The rule of presumption will give that to the tenant. Reclamation and drains, on the other hand, are not self. evident. Before any " presumption " can be applied to them they must be shown to exist. This will be an effective check on the applications of the " prairie-value " doctrine. Besides, the rule of presumption in Ulster has always been that all improvements on a holding were made by the tenant—a more complete presumption than Mr. Morley's—and yet no one ever found that it resulted in confiscation or injustice.
It is evident that the net result of Mr. Morley's change in the law, as here considered, in no way alters the principles of rent-fixing contained in the Act of 1881. The new Bill would only remove certain existing restrictions on the free play of the principles adopted in 18S1, and settle the law where its interpretation is doubtful.—I am, Sir, &c., X.
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