Qualification Grounds
Cases
Oulton and Ors. v Earl of Pembroke and Ors.
31 July 1935
[1935] 69 I.L.T.R 235
Judge Shannon
Judge Shannon
This is an application under Part V of the Landlord and Tenant Act, 1931, for a reversionary lease, or leases, of portion of the premises comprised in an Indenture of Lease dated the 29th day of January, 1806, and made between the Hon. Hans Blackwood of the one part and Henry Catchside of the other part. It is conceded that the interest of the lessee in the said lease is now vested in the applicants, and that the reversions expectant upon the determination of the terms thereby granted are now vested in the respondents, William R. Collis and John B. S. Collis. The premises demised by the said lease are therein described as two lots or pieces of ground situate on the South East side of Fitzwilliam Street in the City of Dublin, and on these there now stand eleven houses, Nos. 12 to 22, Lower Fitzwilliam Street; eight houses, Nos. 42 to 49, Lower Baggot Street, and seven houses, Nos. 13 to 19 East James Street. The premises firstly described in the said lease were thereby demised for a term of 147 years from the 29th day of September, 1792, and the premises therein secondly described were thereby demised for the term of 148 years from the 29th day of September, 1792. The rent reserved by the said lease was progressive, the amount now payable being £474 19s. 0d., adjusted to £438 8s. 4d. In the secondly demised plot stand the five houses, Nos. 18 to 22 Lower Fitzwilliam Street, part of the house, 17 Lower Fitzwilliam Street, and the houses, 13 and 14 East James Street, whilst the residue of the said houses above mentioned stand on the plot firstly demised by the said lease.
All the property demised by the Lease of 1806 is held by the respondents, William R. Collis and John B. S. Collis from the respondent, the Earl of Pembroke, under two leases dated respectively the 30th June, 1790, and 11th June, 1791. By the lease of 1790 the piece of ground therein described (being the same plot as is firstly demised by the lease of 1806) was demised by Lord Fitzwilliam to one Richard Skellern for the term of 150 years, from the 25th March, 1790, at the annual rent of £45, now adjusted to £41 10s. 9d. By the lease of 1791 the piece of ground therein described (being the same plot as is secondly demised by the lease of 1806) was demised by Lord Fitzwilliam to one Arthur Hume for the term of 150 years, from the 25th March, 1791, at the annual rent of £40 5s. 4d., now adjusted to £37 2s. 2d.
The Collis reversion upon the expiration of the terms granted by the lease of 1806 is limited as to the premises thereby firstly demised from the 29th September, 1939, to the 25th March, 1940, and as to the premises thereby secondly demised from the 29th September, 1940, to the 25th March, 1941, and these reversions are, of course, all that can be granted by the respondents, the Messrs. Collis, to the applicants in any reversionary lease or leases the Court may declare the applicants entitled to. The respondent, the Earl of Pembroke, is made a party to the Application by virtue of Section 54 of the above-mentioned Act, which provides that where the “building lessor” holds under a lease for a term which is less than the term for which the reversionary lease is to be granted the immediate landlord of the “building lessor” shall be bound to join in *236 the granting of such reversionary lease. The originating application in this matter is dated the 20th day of November, 1933, and claims an Order declaring that the applicants are entitled to a reversionary lease or leases of the premises, numbers 12 to 22 Lower Fitzwilliam Street, but upon the hearing before me it was conceded by the applicants that they could not establish that the house, No. 12, was erected by the person who at the time of such erection was entitled to the lessee’s interest under the lease of 1806, and, consequently, the application is limited to the ten houses, Nos. 13 to 22 Lower Fitzwilliam Street.
In his answer, dated the 15th December, 1933, the respondent, Lord Pembroke, stated that he was, and always had been, willing to grant a reversionary lease to such parties as might be decided by the Court, or by agreement, to be entitled thereto, thus putting on record the attitude always adopted by his agent, Mr. Vernon. In their answer, dated the 19th December, 1933, the respondents, the Messrs. Collis, disputed the claim of the applicants to be granted a reversionary lease or leases of the premises, Nos. 12 to 22 Lower Fitzwilham Street, on the grounds (1) that the lease of the 29th January, 1806, was not a “building lease” within the meaning of Part V of the Act; (2) that the said houses, or alternatively a substantial portion thereof, were erected in pursuance of building covenants in the above-mentioned leases of the 30th June, 1790, and the 11th June, 1791, or alternatively in pursuance of a building covenant in a sub-lease dated the 27th September, 1792, and that these respondents and not the applicants were the “building lessees” in respect of the said premises; (3) alternatively, that the house, No. 12 Lower Fitzwilliam Street, was erected in pursuance of a covenant in a lease dated the 22nd April, 1811, and that these respondents and not the applicants were the “building lessees” in respect of this house; (4) in the further alternative that having regard to the expenditure made by the predecessors in title of these respondents in pursuance of the building covenants in the said leases of 1790 and 1791 in the development of the lands demised thereby, a reversionary lease should be made to these respondents of portion of the said premises, namely of the houses, Nos. 13 to 16, inclusive, Lower Fitzwilliam Street, and that these respondents would apply to the Court for an Order for the granting of such a reversionary lease to them. By a further notice dated the 17th September, 1934, the respondents, the Messrs. Collis, after reciting that no application under the Act had at any time been made by them to the respondent, the Earl of Pembroke, for a reversionary lease of any of the premises referred to in the originating notice, and that no application had at any time been made by the applicants to these respondents for a reversionary lease prior to the originating notice, these respondents alleged their consent to grant to the applicants a reversionary lease of the houses, Nos. 17 to 22 Lower Fitzwilliam Street, and stated that they would confine their claim to compensation under Section 52 of the Act, estimated at £5,756, or in the alternative in lieu of such compensation a reversionary lease of Nos. 13 to 16 Lower Fitzwilliam Street. Prior to the institution of the present proceedings the respondents, the Messrs. Collis, had through their solicitors by letter dated the 7th November, 1932, informed the applicants that they were advised that they were the persons entitled to reversionary leases from Lord Pembroke, and by letter of like date their solicitors informed Lord Pembroke’s agent that their clients were advised they were entitled to reversionary leases of all the premises demised by the leases of 1790 and 1791, and withdrew their consent to such leases being granted to the applicants.
In May, 1933, these respondents through their solicitors informed the applicants’ solicitors that consent to reversionary leases from Lord Pembroke to the applicants would not be given by them except upon terms of compensation to them. Until the present proceedings were instituted the applicants did not apply to the respondents, the Messrs. Collis, for a reversionary lease, the discussions between the parties being as to who was entitled to a reversionary lease from Lord Pembroke.
At the hearing before me Counsel for the respondents, the Messrs. Collis stated that their clients were not at the moment entitled to a reversionary lease of any of the premises, the subject matter of this application, but it was urged on their behalf that the evidence established that a substantial part of the house in Fitzwilliam Street was built prior to the date of the lease of 1806, and that consequently the Court should do one of three things (a) refuse the application; (b) grant it on terms of the applicants paying compensation to the Messrs. Collis under Section 52 of the Act, on account of work done by their predecessors under the leases of 1790 and 1791; or (c) direct a reversionary lease of some of the houses to the applicants and some to the Messrs. Collis. It will thus *237 be seen that the main issues to be determined are:—(1) whether the houses the subject of the application, or some of them, were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under the lease of 1806; (2) if the houses, or some of them, were so erected the amount of the rent or rents to be paid under any reversionary lease or leases to be granted; (3) whether Section 52 enables the Court to order the applicants to pay to the respondents, the Messrs. Collis, any sum of money as compensation before the granting by them of any reversionary lease, and if the Court has such power, the amount, if any, of such compensation if the predecessors in title of these respondents erected any part of the houses.
It is conceded that no part of the premises in respect of which a reversionary lease is sought is held by any person under a “proprietary lease,” as defined by Section 46 (2) of the Act, and that if the applicants are “building lessees” they are entitled to a reversionary lease or leases subject to the above-mentioned question of compensation. The first question to be determined is, who built the Fitzwilliam Street houses. Evidence as to this is to be found in the leases of 1790, 1791 and 1806, and in other deeds and documents, with all of which I hope to deal. No part of any of the houses was built prior to the year 1790.
The lease of the 30th June, 1790, describes the plot thereby demised as being of certain measurements “over and above the breadth of the area which is to be eight feet wide in the front of the houses that shall be built on the said ground and over and above the flagged passage which is to be 10 feet wide from the said areas.” The annual rent reserved by the said lease was £45, save during the first five years for which the rent was but a peppercorn. This lease contains a covenant by the lessee that he would within the first five years of the term thereby granted build on the demised lot fronting to Fitzwilliam Street “six good and substantial dwelling-houses” of a certain description, and pave the streets and make an area and a flagged passage as in said lease specified. The said lease reserves a penal rent of £60 should the said houses, area, passage and pavement not be built and made as agreed within the said first five years. By endorsed Deed Poll bearing date the 4th September, 1790, the interest of the lessee under the said lease was assigned to one Gustavius Hume, in consideration of the sum of £300. The lease of the 11th June, 1791, made to one Arthur Hume, also described the demised plot as being of certain measurements “over and above the breadth of the area which is to be 8 feet wide in the front of the houses that shall be built on the said ground and over and above the flagged passage which is to be 10 feet wide from the said area.” The said lease reserved a rent of one peppercorn for the first five years and thereafter the annual rent of £40 4s. sterling. This lease, like that of 1790, contains a covenant by the lessee that he would within the first five years of the said term build on the demised lot fronting to Fitzwilliam Street “six good and substantial dwelling-houses” as in said lease specified, and make the area and pavement as therein mentioned. A penal rent of £30 was reserved in the event of breach of these covenants.
By lease of the 27th September, 1792, the said Arthur Hume, being then also entitled to the lessee’s interest in the lease of 1790, demised all the premises in the leases of 1790 and 1791 to one Hans Blackwood to hold the same as to the premises in the lease of 1790 for the term of 147 years, and as to the premises in the lease of 1791 for 148 years, both terms to commence from the 29th September, 1792. The description of the two demised plots is copied exactly from the leases of 1790 and 1791, including the references to the intended areas and passages, and this lease of 1792 contains building covenants identical with those in the preceding leases, save that the time for completion of the buildings is limited to the first 2½ years of the term of the plot in the lease of 1790 and to the first 3½ years of the term of the plot in the lease of 1791. The lease of 1792 reserves a peppercorn rent for the first 3½ years of the said terms and thereafter (except the last year of the term of 148 years) the annual rent of £235 4s. 0d. It also reserved a penal rent of £90 in the event of breach of any of the covenants to build. Next in order of date comes the lease of 1806, under which the applicants hold from the respondents, the Messrs. Collis. Here again the 2 demised plots are described exactly as in the 3 leases already mentioned, including the references to the houses “that shall be built,” the “flagged passage which is to be 10 feet wide” and “the area which is to be 8 feet wide.” The demise in the lease of 1806 is for the residues of the terms granted by the lease of 1792, and it contains covenants by the lessee to build on the demised plots identical in terms with the building covenants in the leases of 1790, 1791 and 1792, save that the plot in the lease of 1790 was to have the six houses built thereon within the first 2½ years of the said terms, and the plot in the lease of 1791 *238 was to have the houses erected thereon within the first 3½ years of the said terms.
The rent reserved by the lease of 1806 was progressive, being £65 for the first year, £63 14s. 0d. for the first half of the second year, ending 29th September, 1806, £63 14s for the second half of the second year, that is the 25th March, 1807, £369 4s. 0d. for the year ending the 25th March, 1808, and £474 19s. 0d. each year for the residue of the terms. This lease also reserves a penal rent of £90 in the event of non-compliance with any of the building covenants. It may not be unimportant to note that Henry Catchside, the lessee in the lease of 29th January, 1806, is therein described as a “builder,” the lessees in the three preceding leases not being described.
The description of the property (without any mention of buildings thereon) in the 4 leases I have mentioned and the similarity of the building covenants therein, strongly support the contention of the applicants that no part of the twelve houses in Fitzwilliam Street was built prior to 1806, whereas the respondents, the Messrs. Collis, contend that the increased rents reserved by the leases of 1792 and 1806 establish that at least a substantial part of the work was done prior to 1806. As against this it must be noted that the rent payable for the first year of the term granted by the lease of 1806 is less than that payable by the lessor therein for the same year under the lease of 1792. These respondents and the applicants rely upon a letter dated the 10th October, 1804, from one Mrs. Barbara Verschoyle, the then agent of Lord Fitzwilliam to Hans Blackwood, the lessee in the lease of 1792 and lessor in the lease of 1806. This letter states that there is due 3½ years’ penalty rent at £90 a year for not fulfilling the building covenants, and states the possibility of payment not being enforced “if the whole front to Fitzwilliam Street is built within 2 years from the 29th September, 1803.” The Messrs. Collis rely upon the words “whole front” as indicating that at least some of the work had been done. No evidence was adduced that penal rents were ever exacted. I may here mention that only eleven houses were built, namely, Nos. 12 to 22, inclusive, in pursuance of the covenants mentioned, and the first reference to any of these houses having been completed appears in a Deed of Release dated the 12th September, 1807, whereby, after reciting the lease of 11th June, 1791, to Arthur Hume, and that he had sub-leased the thereby demised premises to Hans Blackwood, who afterwards leased them to the above-mentioned Henry Catchside, and after further reciting that the said Henry Catchside had built two houses on part of the demised premises, one occupied by Edward Pennefather and the other by Warren H. R. Jackson, Lord Fitzwilliam released that part of the demised premises upon which the 2 houses were built and the said Arthur Hume, Hans Blackwood, Henry Catchside and Edward Pennefather from all claims in respect of the penal rent. The two houses mentioned in this release are Nos. 21 and 22. The fact that they were completed and let so soon after the lease of 1806 does not assist me to come to a conclusion that any part of them was built before January, 1806.
On the 22nd April, 1811, the Assignees in Bankruptcy of Henry Catchside, the said Henry Catchside, the Assignees in Bankruptcy of Hans Blackwood, the said Hans Blackwood and another, demised to one George Chase, builder, that part of the plot comprised in the leases of 1790, 1792 and 1806, upon which there now stand the house, No. 12 Lower Fitzwilliam Street, and the six houses, Nos. 43 to 47a Lower Baggot Street, for the term of 128 years, expiring on the 25th March, 1939, at a rent of £66 12s. 0d. One of the boundaries of this plot is therein stated to be an “unfinished house in the possession of Martin Connolly.” This house would appear to be No. 13 Fitzwilliam Street. By another lease of even date with the last, the same parties demised to one George Wildridge that part of the plot demised by the leases of 1790, 1791, 1792 and 1806, upon which now stand the houses, 48 and 49 Baggot Street, and the seven houses, 13 to 19, inclusive, East James Street, for the term of 128 years, expiring on the 25th March, 1939, at the rent of £47 9s. 0d. This lease contains no reference to the Fitzwilliam Street houses but mentions as one of the boundaries of the demised plot “the stable lane as now laid out,” which is now known as Rock Lane at the rere of Nos. 12 to 18 Lower Fitzwilliam Street.
The next mention of the Fitzwilliam Street houses in any Deed is contained in an Assignment dated 30th June, 1811, from the said Henry Catchside and Hans Blackwood and their Assignees in Bankruptcy to Peter Roe of all the premises comprised in the lease of 29th January, 1806, for the residues of the said terms of 147 and 148 years thereby granted subject to the Chase and Wildridge Leases. This Assignment recites that the said Henry Catchside before he became bankrupt had built on part of the demised plot several substantial houses and had made other lasting improvements *239 thereon, and that these dwelling-houses and the remainder of said lots not yet built upon had been leased to different tenants. It appears from the Schedule of Tenancies to this Deed that there were then ten sublettings of finished and unfinished houses facing Lower Fitzwilliam Street. The fines paid and the rents reserved in some of these lettings show that at the respective dates thereof some of the houses were not complete. But at the latest in the year 1814 all the houses must have been completed. The recitals in the Deed of Release dated the 26th March, 1814, establish this, and I can find nothing to show that the recital therein that Henry Catchside and his successor in title, Richard Williamson, or either of them, “had fully built upon the said several lots of ground to the entire satisfaction of Lord Fitzwilliam” is erroneous.
The lettings referred to in the schedule of tenancies to the Assignment of the 30th June, 1811, were not put in evidence except the letting to Edward Pennefather, which recites that the house let to him had been built by Catchside. It was argued on behalf of the respondents, the Messrs. Collis, that some of these lettings might have been building leases, and that some of the houses, the subject of the application, might have been built or completed by the tenants named in the Assignment of 1811. At the conclusion of the hearing before me, Counsel for these respondents requested me to re-list the case on another day so that they might produce these lettings or other evidence as to the terms thereof, but later I was informed that Counsel did not desire to adduce any further evidence. In the absence of this, I am not prepared to assume that any house was built by any of the tenants named in the said schedule, nor am I prepared to hold that the applicants were bound to give evidence on this matter. On the subject of who built the houses, I should mention one other document, namely, a lease of the 7th September, 1815, of the house, No. 12 Lower Fitzwilliam Street, which recites that this house was bounded on the north by a house built by Williamson. This last-mentioned house is No 13, and this recital supports the view that Williamson, after succeeding to Catchside’s interest, completed the buildings in accordance with the covenants in the lease of 1806, except that only eleven houses were built.
The documents I have referred to satisfy me that the ten houses the subject matter of this application were built by the lessee named in the lease of 1806 or by his successors in title.
The fact that the leases of 1792 and 1806 reserve rents in excess of those in the leases of 1790 and 1791 does not satisfy my mind that the lessees in the leases of 1790, 1791 and 1792 had done any building. To say that they had done so would, in my opinion, be mere guesswork. The increase in the rents in these leases is as consistent with speculation as with building having been done prior to 1806. If these lessees did do some building it cannot have been a great amount, and the fact that a small part of the work was done prior to 1806 would not prevent a finding that substantially all the work was done by the lessee under the lease of 1806 and his successors in title, which would, in my opinion, be a sufficient finding to entitle the applicants to the reversionary lease or leases asked for. Even if the predecessors in title of the respondents, the Messrs. Collis, had done some work on the buildings, there is not, in my opinion, any provision in the Act of 1931 entitling them to claim from the applicants, or from anyone else, compensation in money or otherwise as a condition precedent to granting a reversionary lease, or at all. If it was the intention of the Legislature to make provision for such a state of facts as is contended by the Messrs. Collis to exist here, clear words could easily have been used. Section 52, relied upon by these respondents, does not mention compensation, and when it speaks of the Court making such order as Justice shall require, and in particular fixing the terms upon which the lease is to be granted, it makes provision, in my opinion, for the insertion in the lease of possible special covenants, terms and conditions not specified in Section 48, as well as giving the Court power to determine all disputes and difficulties which may exist as to any matter arising under the Act and therein specially mentioned. The provision in Section 52 that “the Court may make such order as Justice shall require” means, in my opinion, such order as Justice shall require in relation to the matters specially mentioned in the Act.
Having now decided that the applicants are entitled to a reversionary lease, or leases, of all the houses, 13 to 22, both inclusive, and that the respondents, the Messrs. Collis, are not entitled to any compensation from the applicants, the next thing to be done is to fix the rent to be reserved by and the covenants and conditions to be contained in, such lease or leases.
Under Section 48 (1) (a) the duration of the lease or leases shall be 99 years from the expiration of the respective terms granted by the lease of 1806, that is from the 29th *240 September, 1939, and 29th September, 1940.
Counsel for the Messrs. Collis say it may be necessary to have two reversionary leases, and Counsel for the respondent, Lord Pembroke, think there must be two leases, but state he is willing there should be only one. A difficulty not yet fully discussed here arises. The term for which one of the plots on which the house No. 17 partly stands expires on the 29th September, 1939, and the term for which the plot on which the rest of this house stands is held expires on the 29th September, 1940. The rent must be based not upon the land but upon the buildings, and if there are to be two reversionary leases it is difficult to ascertain what a willing lessee would give for one half of the house, No. 17, or for the two blocks of houses with half of No. 17 added to each.
It is contended on behalf of Lord Pembroke that the “gross rent” as defined by Section 48 (1) (a) is to be ascertained by taking each of the ten houses as a separate unit, determining what a willing lessee not already in occupation would give and a willing lessor would take for each house, and adding these sums together. On the other hand, the applicants contend that I must regard all the houses as one unit, and ascertain what the willing lessee would give and the willing lessor take for the unit. In my opinion the applicant’s contention is correct. The section says that the “gross rent” is to be the rent which in the opinion of the Court the willing lessee would give and the willing lessor would take for “the land comprised in such reversionary lease.” The “land comprised in the reversionary lease” will be the plot with ten houses if there is to be one lease, and if there are to be two leases the land comprised in one will be a plot with four and a half houses on it, and the land comprised in the other will be a plot with five and a half houses on it. In neither event can I have regard to willing lessees of single houses, and then add their rents together and say the result is what the willing lessee would give for “the land comprised in such reversionary lease.” Such a method of calculating the gross rent would be more favourable to Lord Pembroke than to the applicants, but in my opinion I cannot adopt this. I must take one unit of ten houses, or two units, one of four and a half and the other of five and a half houses, and ascertain what the willing lessee would give and the willing lessor would take for the one or two units as the case may be. This construction of Section 48 (1) (a) may in many cases work a great hardship on owners of property, and I doubt if the framers of this section had in mind such a case as the present. I think the section was designed to meet the case of only one building, but where a case like the present arises the Court can only look at what the section says, and it speaks of one lessee for all the land in the reversionary lease. If there are to be two reversionary leases, and if for this purpose I am to divide the house No. 17 into two parts, including one part in one of such leases and including the other part in the other lease, it is difficult to ascertain a gross rent “on the basis of vacant possession being given” as directed by Section 48 (1) (a). The section does not appear clearly to cover the case of a building erected on a plot of which one part is demised for a term ending on a certain date and the other part is demised for a term ending on a later date. It is difficult to imagine “vacant possession” of part of a house divided from the rest of it by an imaginary line drawn from the top to the bottom of such house. In the absence of agreement to the contrary the reversionary term or terms must be 99 years, commencing and ending at different dates for some of the houses. During the argument before me the difficulty of ascertaining a gross rent in respect of the house No. 17, whether considered alone or as part of the unit of ten houses was not discussed. Under the circumstances what I propose to do is to follow the lines upon which the case was discussed and waiving the difficulty of the half house, to fix the rent to be paid for the ten houses as one unit. If there must be, as I think there must, two leases, then no doubt the parties can agree as to the apportionment to be made of the rent I fix for the entire. If they cannot agree I will hear argument upon the point and apportion the rent myself. Whilst I propose to fix the “gross rent” of the ten houses by ascertaining the rent which in my opinion a willing lessee not already in occupation would give and a willing lessor would take for the ten houses on the basis of vacant possession, and in the circumstances specified in Section 48 (1) (a)—that is if such rent exceeds the minimum allowed by the Act, I must consider as a factor in the case the rents which the occupying tenants now pay for these houses and other similar houses in the vicinity.
At the hearing before me Counsel for the respondents, the Messrs. Collis, did not take an active part in the discussion as to what the amount of the rent should be, these respondents having previously intimated to the applicants that they were at liberty to negotiate with Lord Pembroke’s agent as to the amount of such rent. Negotiations did *241 take place resulting in an agreement that an average of £250 should be spent upon each house to the satisfaction of the Estate Engineers as a condition precedent to the granting of the lease, or that a covenant to do this should be inserted in the lease. As this money is to be expended in satisfaction of the covenants to repair in the existing leases the expenditure of it cannot be taken into consideration in ease of the applicants in fixing the new rent. Unfortunately for me the parties were unable to agree as to the amount of such rent, the negotiations ending on the 15th March last, when the applicants offered a rent of £22 10s. 0d. for each house, and Mr. Vernon stated that he could not agree to a lesser rent than one based on £27 10s. 0d. for each house. In arriving at my conclusion as to the rent or rents to be paid, I did not bear these figures in mind, as I realise the offers may have been made to avoid the expenses of an application to the Court. In fixing a “gross rent” upon the basis of what the imaginary willing lessee would give for the ten houses I must do so on the basis that they are offered to him in good repair in accordance with the covenants in the existing leases, but bearing in mind that the houses are old and that the imaginary lessee would (as the applicants will) have thrown upon him the burden of future repairs. I am, however, satisfied that Mr. Crawford Smith is right when he says that these houses have a life of another 100 years, provided, of course, that they receive reasonable and proper attention during this period. This attention will, of course, mean spending money on repairs which will not be by any means light.
I now come to the evidence upon what the gross rent should be. Mr. Brindley says that “Fitzwilliam Street is gone and going,” comparable to York Street and Holles Street, and degraded by the laneways opposite and at the rere of it. His opinion is that the “gross rent” for the ten houses for a term of 99 years should be some figure between £300 to £350 a year, the tenant, of course, doing all repairs. If the houses are divided into groups of six and four, his figure is the same, £30 to £35 for each house. If the houses were to be let separately for this term, tenant doing repairs, his figure is £40 per house. He emphasises the fact that the people are leaving large houses and flats and going to bungalows outside the city. I fully appreciate that Mr. Brindley would give the same evidence no matter which party called him as a witness, and I realise that his experience and ability in his business are second to none in the city, but I have come to the conclusion that his opinion is based rather on what he would advise a client to do than what in fact people do in practice. I agree with Mr. Brindley that the taking of these ten houses on a 99 years’ lease is a hazardous speculation, but some very clever gentlemen are very keen to get such a lease. Mr. Stafford’s opinion is that on a long lease these houses could not be let at more than £40 to £45 each, but he says that he has not experience of letting values, and is not acquainted with the terms of Section 48. Mr. Oulton, who has his offices in one of the houses, namely, No. 21, and has been agent over the houses since 1918, says that in recent times a different type of tenant to that of earlier date has sought lettings. One of the houses is now used as an hotel, No. 16 has been converted into flats, and there are offices in two of the houses. Mr. Oulton very fairly says that the demand by prospective tenants has not fallen off, and that the lessees make improvements. He is of opinion that the lanes affect the letting value of the houses, and that on a 99 years’ lease a gross rent of over £50 a year for each house would be excessive. He has given me particulars of the existing lettings, from which it appears that the houses produce an aggregate rent of £432 15s. 2d. With the exception of the house No. 21, all the houses are let for comparatively short terms, varying between 12½ and 19 years and dating between 1918 and 1927. In all cases the tenant is responsible for all repairs except (I think) in three cases where the lessor keeps the roof. Save in the case of No. 21, the tenants paid fines for their leases, and these must be taken into consideration in order to ascertain the real letting value of the property. If Mr. Oulton’s calculations as to the value of the fines are correct, the total value of the existing lettings is £862 3s. 6½d., or approximately £86 for each house. I must assume that in every case the houses are let at the best rents procurable from solvent and responsible tenants.
For the respondent, Lord Pembroke, his agent, Mr. Vernon, gave me particulars of a number of reversionary leases recently granted by Lord Pembroke of houses in the vicinity of Fitzwilliam Street, and states that the “gross rents” in these cases work out at about twice the valuation of the demised premises. I have no doubt that this is so or very nearly so. Some of these lettings were, and some were not, made to occupiers. The total valuation of the houses, the subject matter of the present application, is £690 10s. 0d. If I double that and divide it by four, the net rent of the ten houses on this basis would be approximately £345, or an average of about £34 per house, in my *242 opinion an excessive figure, having regard to the actual rents received by the applicants. Mr. Vernon’s evidence does, however, satisfy me that willing lessees could be found for the ten houses in Fitzwilliam Street at rents considerably in excess of Mr. Brindley’s figures, that is, of course, on the basis of each house being let separately. I am particularly impressed with the fact that No. 6 Lower Fitzwilliam Street, backing on to the objectionable lane, was recently let on reversionary lease at £20 a year. I cannot, however, but think that many of the lessees with whom Mr. Vernon recently negotiated, had regard more to what they would actually have to pay than to what the imaginary lessee would have had to pay had such person existed and been given a lease for 99 years at a calculated gross rent. For the reasons referred to in Mr. Moloney’s case, I think Mr. Lisney’s figures are too high, and in my opinion he has not sufficient practical experience of the letting value of houses in the vicinity of the premises in question to enable me to accept his figures.
Mr. Moloney has given me particulars of some recent lettings made by his firm in Lower Baggot Street. These are for short terms, and work out at about twice the valuation; and the houses do not appear to be more valuable than those in Fitzwilliam Street. Mr. Moloney is of opinion that the payment of a fine by a tenant results in his rent, interest on the fine, and provision for a sinking fund to reimburse him for the fine, being together less than the rent he would have been willing to pay had no fine been paid. With this I agree. On Mr. Moloney’s calculations of the value of the fines paid by the present tenants of the Fitzwilliam Street houses, the existing total rental value of those houses is £1,013 as against Mr. Oulton’s figure of £862, an average of approximately £101 as against an average of approximately £86 a house. I think that Mr. Moloney’s allowance of 8% interest on the fine is excessive, and that Mr. Oulton’s allowance of 5% is sufficient. Mr. Moloney’s “gross rents” of the ten houses amount to £1,310, something less than twice the total valuation, and an average of approximately £130 a house. In my opinion these figures are too high, bearing in mind the rents at which the houses are let. I cannot but be influenced to a great extent by the existing lettings. If I am free to assess a gross rent for each house on the basis that each house is offered separately under the conditions specified in Section 48 (1) (a), I would make an allowance in favour of the lessor by reason of no fine being asked; I would allow in favour of the applicants that the term is 99 years, and fix an average gross rent for each house of £95 a year, making an average net or reversionary rent of £23 15s. 0d. for each house, or a total rent for the ten houses of £237 10s. 0d. I arrived at this figure before arriving at the minimum rent in accordance with Section 48 (1) (b). From the landlord’s point of view this naturally appears small, but he must always bear in mind that the Act has taken away his reversionary rights to a very great extent.
But, as I have already stated, I cannot fix the gross rent by ascertaining what rent “a willing lessee” would give for each house. I must ascertain what rent “a willing lessee” would give for the ten houses. If I am even approximately right in my figure of £237 10s. 0d., it is manifest that a rent arrived at by ascertaining what rent one willing lessee would give for the ten houses must be appreciably less than £237 10s. 0d. and may be less than the minimum rent mentioned in Section 48 (1) (b). It would, therefore, be convement to find the minimum rent to be paid under the reversionary lease or leases by apportioning the rent of £438 8s. 4d. now payable under the 1806 lease between the Fitzwilliam Street houses and the premises comprised in the Chase and Wildridge leases of 1811. It was agreed between the several Counsel representing the parties to this application and Counsel representing the Wildridge and Chase interests that these interests would not be bound by any apportionment I might make in the present case, and Counsel for the Wildridge and Chase interests then withdrew. The apportionment required by the Act might be made on any of the following bases:—(1) actual foot frontage of the premises; (2) valuations based upon these frontages, or (3) according to the Poor Law Valuation. The first suggested basis could not in every case be right, as small frontages on one street might be more valuable than large frontages on another street. An apportionment on the secondly suggested basis would be satisfactory if all the parties agreed as to the value of the frontages. I propose to adopt the Poor Law Valuation system. I think that in the absence of evidence to the contrary, I must assume that the Poor Law Valuations correctly represent the values of the respective properties as between themselves and, I presume, these valuations were made at the same time and are uniform. Counsel for the applicants stated that they did not object to my making an apportionment according to the respective Poor Law Valuations, provided that I increased the valua *243 tions of the property in Baggot Street, but I can find no reason why I should do this. The valuation of all the property is £1,349, and of the ten Fitzwilliam Street houses, £690 10s. 0d. I am told that the sum in proportion results in £224 being placed on the ten houses, and, subject to this being checked, I find that to be the minimum rent payable under the reversionary lease or apportioned between the reversionary leases as the parties may agree, or in default of agreement, as I may decide. It will be seen that this comes very close to the figure of £237 10s. 0d. already mentioned. If I had to decide what the willing lessee would give for the ten houses the figure would be less than £224, so it is unnecessary to proceed further in that direction.
In the result I will make an Order that the applicants are entitled to one or two reversionary leases from the Messrs. Collis, as the parties may agree, at a rent of £224 (subject to this figure being checked), to be apportioned if and as may be necessary. The term will be 99 years from the expiration of the existing terms, and the covenants and conditions will be the ones usual in such a lease, including a covenant by the lessee to repair. I assume the parties will agree as to the terms of the lease or leases. If any difficulty arises it can be referred to me. There will be an Order under Section 54 (2) directing Lord Pembroke to join in the lease or leases and under Section 54 (3) empowering him as tenant for life to join and grant the same. There will also be a provision in the Order as to the expenditure of the agreed sum of £2,500. There remains the not unimportant question of costs. If Counsel wish I will hear them upon it.
(Counsel appearing in the case applied for costs on behalf of their clients, and, after some discussion, his Lordship said):—
On this question of costs I do not like to express my opinion until I consult with Judge Davitt as to what is the practice in such cases, because the practice of the Courts should be similar. In the event of my deciding that I have jurisdiction, I will make an Order that the respondents, Messrs Collis, pay half the costs of Lord Pembroke and half the cost of the applicants. Wildridge and Chase will bear their own costs, but I would like to have this matter settled at this sittings, and shall consult Judge Davitt to-day.
31st July, 1935.
Judge Davitt
Judge Shannon has requested me to deliver his decision in this case upon the point as to whether in proceedings under the Landlord and Tenant Act, 1931, the Circuit Court has power to award costs. He is of opinion that it has. His view is that pending the making of Rules of Court under the Act, or failing the making of rules, or thirdly, in the event of such rules being made and not containing any provision as regards costs, there is jurisdiction contained under the Courts of Justice Act to award costs, and with this view I am in complete agreement.
Collis v. Earl of Pembroke.
Tabuteau v. Earl of Pembroke and Collis.
[1934] IR 619
The judgment of the Court was delivered by FitzGibbon J.
FITZGIBBON J.:
31 July
This is an appeal from a decision of the High Court, dated May 15th, 1934, affirming an order of the Circuit Judge for the City and County of Dublin, made on the 29th day of March, 1933, in respect of which a certificate that it involved a question of law of such importance as to be fit to be the subject of an appeal to the Supreme Court was granted by the High Court on June 4th, 1934.
In the Circuit Court, and in the High Court, and here, the case under appeal was heard and determined along with the case of Tabuteau v. The Earl of Pembroke and Collis , which depends upon it, and the two cases are so interdependent that it is convenient to deal with them together in stating the reasons for our decision, a course which was adopted both by Judge Davitt and the Judges in the High Court.
The question for decision arises upon Part V of the Landlord and Tenant Act, 1931 (No. 55 of 1931), which is headed “Special Provisions in Relation to Building Leases.” The expression “building lease” is twice defined in the Act, and much of the argument put forward in support of the appeal has been grounded upon a confusion between the two definitions.
In sect. 2 the definition is as follows:”Except in Part V of this Act, the expression ‘building lease’ means a lease made partly in consideration of the lessee having erected or agreed to erect permanent buildings, whether new or additional, on the demised premises”; while in Part V, with which we are principally concerned, it is enacted by sect. 46, sub-sect. 1, “In this Part of this Act the expression ‘building lease’ means a lease in respect of which all the following conditions are complied with, that is to say:
“(a) the land demised by such lease is situate wholly in an urban area;
(b) there are permanent buildings on such land and the portion of such land not covered by such buildings is subsidiary and ancillary to such buildings;
(c) such permanent buildings are not an improvement within the meaning of this Act;
(d) such permanent buildings were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease;
(e) such permanent buildings were not erected in contravention of a covenant, condition, or agreement contained in such lease.”
Sub-sect. 2 of the same section defined the expression”proprietary lease,” a term new to the law, as “a lease complying with all the following conditions, that is to say:
(a) such a lease is a sub-lease (whether mediate or immediate) under a building lease; and
(b) the land demised by such lease is the whole or part of land comprised in such building lease; and
(c) such lease is made for a term which equals or exceeds whichever of the following periods is the lesser, that is to say, twenty years or two-thirds of the term of such building lease, and which in any case expires at the same time as or not more than five years before the expiration of such building lease; and
(d) such lease was made partly in consideration of the payment of a sum of money (other than rent) by the lessee to the lessor at or immediately before the grant of such lease or partly in consideration of the expenditure of a sum of money by the lessee on the premises demised by such lease or partly in consideration of both such payments and such expenditure; and
(e) the said sum of money so paid or expended or the total of the said sums of money so respectively paid and expended (as the case may be) was not less than fifteen times the yearly amount of the rent or the greatest rent reserved by such lease.”
Sect. 47, sub-sect. 1, enacts that “At any time within seven years before the expiration of a building lease, any person in possession of the land or any part of the land comprised in such lease and holding the same under such building lease or under a proprietary lease shall, subject to the provisions of this Part of this Act and on obtaining the consent (if any) required by this section, be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease a reversionary lease on the terms fixed by or under this Part of this Act of the said land so possessed and held by him as aforesaid.”
Sub-sects. 2 and 3 provide for the consents required to a reversionary lease under sub-sect. 1, and sub-sect. 4 provides for cases in which a reversionary lease may be obtained by a lessee or person in possession of land or part of the land comprised in a building lease which has expired within five years before the passing of the Act.
By lease, dated July 14th, 1789, Lord Fitzwilliam granted to John Johnston, his heirs, executors, administrators and assigns a “lot or piece of ground situate on the north-west side of Baggot Street in the suburbs of the City of Dublin and in the Manor of Bagott’s Rath alias Baggottrath containing in front to said street 100 feet, in breadth to the rere 100 feet, and in depth 290 feet over and above the breadth of the area which is to be 8 feet wide in the front of the houses that shall be built on the said ground and over and above the flagged passage which is to be 10 feet wide from the said area mearing and bounding on the North West to Thomas Browne’s holding on the North East to Baggot Street aforesaid on the South West to an intended Stable Lane 24 feet wide and on the South East to John Gold’s holding as the same are set forth in the map or terchart hereunto annexed together with all the rights, members and appurtenances to the said lot of ground belonging or in anywise appertaining,” for the term of 150 years from the 25th of March then last past, at the yearly rent of £30, save for the first 7 years, for which the rent was to be a peppercorn, over and above all taxes and impositions, and after a power of distress and re-entry there followed this covenant by John Johnston:”that he, the said John Johnston, his heirs, executors, administrators or assigns will within the first three years of the said term build on the said lot and hereby demised premises fronting to Baggot Street aforesaid four good and substantial dwellinghouses with lime and stones or with bricks and lime well roofed and covered with slates not less than 25 feet each in the front and three storied high above the cellars at least and shall make an area of 8 feet wide at the front of said houses and lay flags before the houses for a foot paving in like manner as the same is now done before the houses in Merrion Street and shall pave the half of the street before the front of the said houses from the said flags to the middle of the Street.” The lease reserved an additional penal rent of £50 if this covenant was not fulfilled within the first three years, and gave Lord Fitzwilliam an option to avoid the lease at his election. Then more covenants by the lessee against offensive or noisy trades, to pay the rents reserved, not to commit waste, to uphold, repair, maintain, preserve and keep in good repair, order and condition and so to deliver up the demised premises, and to do suit and service at the Manor Courts, and by the lessor for quiet enjoyment.
The points of the compass are difficult to reconcile with the present direction of the street, but there can be no doubt that the lease was of a plot of building ground on the southerly side of a street then in process of formation which is now Lower Baggot Street.
On February 11th, 1792, John Johnston, the lessee in the last mentioned document, demised to Robert Marshall a “lot or piece of ground on the south side of Baggot Street, containing in front to the said street 25 feet in breadth 25 feet in the rere and 290 feet from front to rere mearing and bounding on the west to a house now in possession of Francis Vesey, Esq., on the South (sic) to Baggot Street, on the North West to a stable lane and on the East to a holding of the said John Johnston as the same are set forth in the map or terchart hereunto annexed and also all the right, title and interest, of the said John Johnston in the gates, walls, vaults, shore and all other the members and appurtenances to the said lot of ground belonging” for the term of 140 years from the 1st of March then next ensuing, at the rent of a peppercorn to March 25th, 1793, and £25 per annum thereafter.
This lease reserved all royalties to Lord Fitzwilliam, and to John Johnston “a right to ask, demand and receive of and from such person or persons as shall hereafter build or cause to be built one or more house or houses in Bagot Street opposite the said lot or from such other person or persons whom it may concern one half of the expense of making or building the said shore for the use of the said John Johnson, his executors, administrators and assigns.” The lessee entered into a covenant with the lessor to build on the demised lot within the first year of the term a dwelling-house in exact accordance with the description contained in the lease from Lord Fitzwilliam to Johnston and to make an area and flagged foot passage as therein provided, and in addition to pave half the street in front of the house from the flagged passage to the middle of the street, subject, in case of non-fulfilment of the covenant, to an additional penal rent of £10 or to an avoidance of the lease at the option of the lessor. The lease contained covenants against offensive trades, to keep and deliver up in good repair, to do suit and service at the Manor Courts of Lord Fitzwilliam, and for quiet enjoyment.
The compass points and boundaries in this lease are quite irreconcilable with the present state of the property and with those in the head lease from Lord Fitzwilliam to Johnston, but it is common case that the lot demised to Robert Marshall by the lease of February 11th, 1792, is that upon which the house now known as 126 Lower Baggot Street was subsequently built, and was held by Tabuteau, the plaintiff in the second action, for the residue of the term created by the lease to Marshall under an assignment, dated July 20th, 1925, as tenant to the appellant Collis the assignee of Johnston’s interest in the leases of July 14th, 1789, and February 11th, 1792.
By one other lease, dated February 13th, 1792, two days after the lease to Marshall, John Johnston demised another plot, parcel of the lot demised to him by Lord Fitzwilliam, to Henry Upton. This is also described as”on the south side of Baggot Street containing in front to the said street 25 feet in breadth 25 feet in the rere and 290 feet from front to rere mearing and bounding on the west to the holding of Robert Marshall on the South (sic)to Baggot Street on the North West to a stable lane and on the East to a house now in the possession of Thomas Penrose, Esqre., as the same are set forth on the map or terchart hereunto annexed and also all the right, title and interest of the said John Johnston in the doors, gates, walls, vaults, shore and all other the members and appurtenances to the said lot of ground belonging” for the term of 140 years from the 1st day of March then next ensuing, reserving the rent of a peppercorn to March 25th 1793, and £25 per annum thereafter. The exceptions and reservations and covenants in this lease are identical with those in the lease to Marshall. The general words in the parcels include “doors” in addition to “gates, walls, vaults and shore.” It is common case that the house now known as 125 Lower Baggot Street was erected upon the plot demised by this lease, and that the interest of Johnston, the lessor of Upton, is now vested in the appellant. Upton’s interest appears to have become vested in a Mrs. Elizabeth Carry, who remained on, after the expiration of the Upton lease on March 1st, 1932, apparently as tenant from year to year to the appellant.
It appears that on August 11th, 1883, the plot upon which No. 127 Baggot Street now stands was assigned by the parties in whom the interest of John Johnston under the lease of July 14th, 1789, was then vested, to one, William Carey, for the whole residue then unexpired of the term of 150 years from March 25th, 1789, and we are not concerned with that portion of the premises.
The state of affairs upon the 22nd of December, 1931,when the Landlord and Tenant Act, 1931, was passed, was as follows:
The appellant, Dorothea Joyce Collis, held the premises knows as 125, 126, and 128 Lower Baggot Street as tenant to the respondent, the Earl of Pembroke, for the unexpired residue of a term of 150 years from the 25th of March, 1789, at the adjusted rent of £26 9s. 4d.
The term created by this lease will expire on March 25th, 1939.
The house No. 125 Lower Baggot Street was held by, and was in the actual occupation of, Elizabeth Carry as tenant to Dorothea Joyce Collis for the residue of a term of 140 years from March 1st, 1792, which had then a little less than three months to run. The house No. 126 Lower Baggot Street was held by, and was in the actual occupation of, the respondent, Tabuteau, as tenant to Dorothea Joyce Collis for the residue of a term of 140 years from March 1st, 1792, which had then a little less than three months to run, and the house No. 128 Lower Baggot Street is said to have been in the occupation of some Government Department as tenant to Dorothea Joyce Collis under a tenancy, the terms of which, except that the rent was £110 per annum, the landlord paying taxes, have not been disclosed.
During the currency of the lease of July 14th, 1789, and within seven years before its expiration, the appellant Dorothea Joyce Collis, claiming that the said lease was”a building lease” within Part V of the Landlord and Tenant Act, 1931, and being in possession of part of the land comprised in that lease, and claiming to hold that land under the building lease, applied to the respondent, the Earl of Pembroke, as the person in receipt of the rent reserved by the said lease, for a reversionary lease on the terms fixed by or under the Act of the land so possessed or held by her, namely, the houses No. 125, 126, and 128 Lower Baggot Street. The respondent disputed the right of the applicant to a reversionary lease of the houses Nos. 125 and 126 upon the ground that neither of them had been erected by the person who at the time of such erection was entitled to the lessee’s interest under the lease of July 14th, 1789, but the right of the applicant to a reversionary lease of No. 128 was not disputed. As the claim of the applicant was for a reversionary lease of all three houses, no agreement was reached concerning the terms upon which she should obtain a reversionary lease of one.
The respondent, Tabuteau, who held No. 126 Lower Baggot Street as tenant to Dorothea Joyce Collis under the lease of 11th February, 1792, from John Johnston to Robert Marshall, claimed that that lease was “a building lease”within Part V of the Act, and made an application within the prescribed time to Dorothea Joyce Collis, as the person in receipt of the rent reserved by that lease, for a reversionary lease of the premises thereby demised. His claim was disputed by Dorothea Joyce Collis upon the grounds that the lease of February 11th, 1792, was not a building lease within the meaning of Part V of the Act, and that the house and premises No. 126 Lower Baggot Street were erected in pursuance of the building covenant contained in the lease of July 14th, 1789, made to the predecessor in title of Dorothea Joyce Collis, and that Dorothea Joyce Collis and not the respondent, Tabuteau, was the building lessee in respect of the said premises within the meaning of the Act.
The two applications, that of Dorothea Joyce Collis against the Earl of Pembroke, and that of Lionel Tabuteau against Dorothea Joyce Collis and the Earl of Pembroke, came on for hearing before Circuit Judge Davitt in March, 1933, and were heard together.
He decided in the former case that the lease of July 14th, 1789, was a building lease within sect. 46, sub-sect. 1, of the Act so far as it was a demise of and related to the hereditaments and premises No. 128 Lower Baggot Street, but that it was not a building lease within the said section so far as it was a demise of and related to Nos. 125 and 126, and he went on to fix the terms and conditions upon which the reversionary lease of No. 128 should be granted to Dorothea Joyce Collis by the Earl of Pembroke.
In the second case he declared that the sub-lease, dated February 11th, 1792, from John Johnston to Robert Marshall, was a building lease within sect. 46, sub-sect. 1, and that the lease of July 14th, 1789, was not a building lease within that section of the premises comprised in the sub-lease of 1792, and he fixed the terms and conditions upon which Lionel Tabuteau, as successor in title of Robert Marshall, was entitled to a reversionary lease from Dorothea Joyce Collis and the Earl of Pembroke of No. 126 Lower Baggot Street, and he declared that Dorothea Joyce Collis was not entitled to a reversionary lease of the same premises from the Earl of Pembroke.
There is really very little to add to the very careful judgment of the learned Circuit Judge, which was approved by each of the Judges in the High Court, but as the High Court granted a certificate that their decision involved a question of law of such importance as to be fit to be the subject of an appeal to this Court, we have thought it advisable to state our own reasons in our own words.
The first and main contention of the appellant in Collisv. Earl of Pembroke was that the learned Circuit Judge and the Judges of the High Court misdirected themselves”in holding that the lease of 1789 was not a building lease within the meaning of Part V of the Act.” This allegation is not strictly in accordance with the facts, for it was held by each Court that the lease of July 14th, 1789, was a building lease within the meaning of Part V of the Act, in so far as it complied with the provisions of sect. 46, but that it was not a building lease in respect of so much of the demised land as was outside the provisions of sect. 46.
To be a building lease within Part V there must be: 1, permanent buildings on the land, and 2, such permanent buildings must have been erected by the person who, at the time of such erection, was entitled to the lessee’s interest under the lease.
There are permanent buildings on the whole of the demised land, but, with the exception of No. 128, the evidence establishes the fact to our complete satisfaction, as it did to that of Judge Davitt, and of the Judges of the High Court, that such permanent buildings were not erected by the person who, at the time of such erection, was entitled to the lessee’s interest under the lease. When the buildings now known as 125 and 126 Lower Baggot Street were erected, John Johnston was entitled to the lessee’s interest under the lease of July 14th, 1789, and so far from erecting the permanent buildings himself, he bound his own lessees, Robert Marshall and Henry Upton, respectively, to build, each on the lot demised to him,”one good and substantial dwelling house . . . three stories and a half high above the cellars at least . . . to make an area 8 feet wide at the front of said house and lay flags before the house for a foot passage . . . and pave the half of the street before the front of the said house.”That this work was actually carried out by the lessees of Johnston is common case. The appellant has endeavoured to support her case upon the maxim Qui facit per alium facit per se, but that principle has no application to the present case. It appears to us that the policy underlying the Landlord and Tenant Act, 1931, has been correctly stated in the judgments under appeal. The “mischief”against which the Act was directed was the appropriation, under the principles of the Common Law, by ground landlords, at the expiration of the leases made by them, of the buildings erected by their tenants or the predecessors in title of their tenants, and, if the contention of the appellant be well grounded, the Act would be meaningless and inoperative, because it would be just as competent for Lord Fitzwilliam’s successors in the present case to contend that all the permanent buildings on the lands demised by the lease of July 14th, 1789, had been erected by them, as it is for the successors of John Johnston to contend that he had erected the permanent buildings upon the lots demised by him to Marshall and Upton, when he had in fact transferred to them the cost of erection, and his assignees stand to the assignees of Marshall and Upton in precisely the same relation as that in which Lord Pembroke stands to the appellant.
That the lease of July 14th, 1789, was a building lease in the ordinary meaning of that expression, and within the definition in sect. 2 of the Act is not denied, but the expression is differently defined for Part V, where the actual erection of, and not merely an agreement to erect, permanent buildings on the demised premises is an essential part of the definition. Sub-sect. (d) of sect. 46, sub-sect. 1, appears to have been expressly devised to meet such a case as the present, and it would be strange indeed to place upon the Act a construction which would have the effect of depriving the original lessor, the Earl of Pembroke, of the right to resume possession of the demised lands with all the buildings on them, at the conclusion of the term for which he had let them to Johnston, while permitting the assignees of Johnston’s interest to resume possession of three-fourths of the premises demised to them, upon which the permanent buildings which Johnston had covenanted with his lessor to build had in fact been erected by and at the expense of his own lessees. The entire policy of the Act could be frustrated by the simple process of making a ground lease, with a covenant to build, to a nominee of the landowner, and then subdividing the land into suitable lots and letting them to building tenants for terms which would deprive them of the benefits of sect. 46, sub-sect. 2.
It was then contended that there cannot be a “sub-building lease.” There is nothing in the Act inconsistent with the validity of such an instrument. If the terms of the letting and the facts of the case bring any “lease,”as defined in sect. 2 of the Act, within the express words of sect. 46, sub-sect. 1, that lease is a “building lease”within Part V, although it may have been carved out of an interest created by what is a building lease in the ordinary sense of that expression, and the fact that the lessee is what is called a sub-lessee will not deprive him of the privileges conferred by sect. 47.
It was also contended on the part of the appellant that John Johnston had in fact erected permanent buildings upon all the lands demised to him and so had complied with all the requirements of sect. 46, and in support of this contention reliance was placed upon the concluding words of the parcels in the leases to Marshall and Upton:”all the right, title and interest of the said John Johnston in the gates, walls, vaults, shore and all other the members and appurtenances to the said lot of ground belonging,””doors” is added in the Upton lease. It was contended that these words showed that Johnston had erected “doors, gates, walls, vaults and a shore” upon the lots before he demised them to Marshall and Upton, but we agree with the finding of the Circuit Judge that such excavations as may have been actually made did not amount to such an erection of the permanent buildings on the land as would make the Johnston lease a building lease within Part V in respect of the lands sub-demised to Marshall and Upton, or deprive his sub-lessees of the right to claim that the permanent buildings on the lands were erected by them. It was not even shown that the “shore” was upon the demised premises, and as it was apparently common, not only to the houses on the Johnston lots, but also to the houses on the opposite side of the street, it was natural that Johnston should assign his right, title and interest in it, and his doing so is no evidence that it had been built by him. Similarly, the walls and vaults, the interest in which was assigned by Johnston, may well have been under the paved passage way, which was 10 feet wide from the 8 foot area, both of which were outside the plot of 100 feet by 290 demised to Johnston.
If the appellant be not entitled to a reversionary lease of the three houses, 125, 126 and 128 Lower Baggot Street, as we hold she is not, the only question remaining relates to the terms and conditions upon which she was declared entitled to a reversionary lease of No. 128. We have not been furnished with any material upon which we could hold that there was any error either in principle or in fact in the decision at which the learned Circuit Judge arrived. A report made by Mr. Crawfurth Smith, the Estate Engineer of the Pembroke Estate, was put in evidence, specifying the works which he considered necessary to put the premises into such a state of repair as would comply with the covenants in the Johnston lease.
He was examined and was tendered for cross-examination in the Circuit Court, and he was in fact cross-examined by counsel both for the appellant and Tabuteau, but there was no cross-examination either of him or of Mr. Vernon, the Agent for the Pembroke Estate, upon the nature of the repairs recommended by him, and no evidence was given on behalf of the appellant that any of the works included in his report and specification went beyond such repairs as could be required under the lease. Our attention has been specially directed by counsel to Mr. Crawfurth Smith’s recommendations about the roof of No. 128, which appears to require very considerable expenditure, but it is impossible for us, without any evidence on the subject, to decide that the repairs which Mr. Crawfurth Smith has specified exceed those which might be prescribed by the Court, or that they involve an expenditure greater than the amount of damages which might be awarded in an action upon the covenant to keep and deliver up in repair.
For these reasons we are of opinion that the order appealed from should be affirmed and that the appeal in the action by Dorothea Joyce Collis against the Earl of Pembroke should be dismissed.
It follows from the reasons given for our decision in the case of Collis v. Earl of Pembroke , that the order under appeal in the case of Tabuteau v. Earl of Pembroke and Collis should also be affirmed.
The lease of John Johnston to Robert Marshall, dated February 11th, 1792, which was subsequently assigned to Tabuteau, fulfils all the requirements of sect. 46, sub-sect. 1, of the Landlord and Tenant Act, 1931, and we have stated in the case of Collis v. Earl of Pembroke our reasons for holding that the respondent, Tabuteau, is not deprived of the right to a reversionary lease by the mere fact that his interest is carved out of that created by a superior lease, which is a building lease in the ordinary sense of that expression, and a building lease within sect. 46, sub-sect. 1, as regards that part of the demised premises upon which permanent buildings were in fact erected by the lessee. As regards the lot demised to Tabuteau, the permanent buildings on it were in fact erected by the lessee whose interest became ultimately vested in him, and he is entitled to the benefits conferred by the Act, and in particular to the right to obtain a reversionary lease under sect. 47 and sect. 54, sub-sect. 1, from his own immediate lessor. As the interest of his lessor is insufficient to feed the term of 99 years to which Tabuteau has been declared entitled, Lord Pembroke as the immediate landlord of that lessor is bound under sect. 54 to join in the granting of that reversionary lease.
It is only fair to say that, so far as the Pembroke Estate is concerned, its owners and their representatives have never disputed their liability to do all that the Court has ordered, and so far as relates to the conditions upon which they have offered to grant the reversionary leases to which Miss Collis and Tabuteau have been declared entitled, no serious attempt has been made to question their reasonableness, and it has been stated without contradiction that the Pembroke Estate has long been in the habit of granting reversionary leases to its occupying tenants upon terms not less favourable than those which have recently been prescribed by law, and that its practice has been adopted as the measure of the reasonable conditions to be imposed upon all landlords of land in urban areas let upon building leases within Part V of the Act of 1931.
Finn v. Barry
[1941] IR 452
.
O’BYRNE J. :
This case raises a question of fact and also a question of law.
These premises were undoubtedly held under a lease of 20th September, 1836, which is not forthcoming. Neither is the subsequent assignment of 14th July, 1840, forthcoming, but there was put in evidence a memorial of that assignment and that memorial refers to the lease and states that the lessor “did demise, grant, set and to farm let unto the said Charles Bastable his executors, administrators and assigns all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses with out-offices, buildings and concerns attached thereto.”
Mr. Kingsmill Moore has placed reliance on the fact that the two houses had been changed into three, and he argued that that indicated a considerable passage of time. I do not think that that is so, having regard to the nature of the recital, which seems clearly to indicate that the buildings had been erected a short time before the lease was granted. What then is the reasonable inference? It seems to me to be unreasonable to assume that Bastable erected the houses without assurance that he would be allowed to enjoy them. I think the more reasonable inference is that the houses were erected by Bastable at a time when he had an agreement for a lease and that the lease of 1836 was subsequently granted in pursuance of that agreement. Consequently on the question of fact I think that the Circuit Court Judge was entitled to hold that the houses were built by Bastable under an agreement for a lease, which lease was subsequently granted.
The question of law remains as to whether that is sufficient to enable the plaintiff to claim a new lease by virtue of the provisions of the Landlord and Tenant Act, 1931. That depends on clause (d) of s. 46, sub-s. 1, of that Act.
The clause is as follows:”Such permanent buildings were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease.”
Strictly speaking, the person who erected the buildings was not at that time entitled to the lessee’s interest under the lease because the lease had not been granted; but I am of opinion that in equity he should be held to be entitled to the lessee’s interest under such a lease.
This is an enabling Act, and Mr. Kingsmill Moore is right in saying that it should be strictly construed, but it is an Act regulating rights as between landlord and tenant and, if I am right in holding that Bastable erected the houses under and by virtue of an agreement for the lease which was subsequently granted, then, in my opinion, he should be treated as being, at the time of erection, entitled to the lessee’s interest in the lease.
Accordingly I am of opinion that the appeal should be dismissed.
SULLIVAN C.J. :
18 Dec.
Benjamin Finn, the respondent in this appeal, applied to the Circuit Court of Cork for an order declaring him entitled to a reversionary lease of the premises comprised in a lease, dated the 20th September, 1836, whereby certain premises in the town of Kanturk were demised by the Earl of Egmont to Charles Bastable for the term of 99 years from the 25th March, 1836, at the yearly rent of £8 14s. 4d..
Upon the hearing of that application the Circuit Court Judge made an order declaring the respondent entitled to a reversionary lease of the premises for a term of 99 years at the yearly rent of £12.
On appeal to the High Court the learned Judges who heard the appeal differed in opinion, and the order of the Circuit Court Judge was accordingly affirmed. The appellant, Charles Barry, then appealed to this Court.
The Landlord and Tenant Act, 1931, s. 47, provides that any person in possession of the land or any part of the land comprised in a building lease and holding the same under such building lease . . . shall . . . be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease a reversionary lease . . . of the said land so possessed and held by him. Sect. 46, sub-s. 1, defines a “building lease” as a lease in respect of which certain conditions mentioned in the section are complied with. One of these conditions, (d), is that the permanent buildings on the land were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease.
The only question at issue in this appeal is whether or not the lease of the 20th September, 1836, was a lease in respect of which that condition was complied with.
The only evidence provided by the respondent to prove that this condition was complied with was (1), an attested copy of a memorial of the registration in the Registry of Deeds of an assignment, dated the 14th July, 1840, by Charles Bastable to James Finn of the premises comprised in the lease, and (2), a copy of a settlement, dated the 26th February, 1867, made upon the marriage of Daniel James Finn son of James Finn, the assignee in the assignment of the 14th July, 1840. The memorial states that the assignment recited that by the lease of the 20th September, 1836, the Earl of Egmont demised to Charles Bastable “all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses with out-offices, buildings and concerns attached thereto.” The marriage settlement recites that by deed of the 20th September, 1836, the Earl of Egmont granted and demised to Charles Bastable “the plot of ground whereon the said Charles Bastable had then erected and built three dwelling-houses with out-offices, buildings and concerns attached thereto.” It is clear from these recitals that Charles Bastable erected the houses before the execution of the lease. These houses now constitute the “permanent buildings” to which s. 46, sub-s. 1, par. (d) of the Act refers.
Counsel for the appellant say that it is clear from these recitals that Charles Bastable was not entitled to the lessee’s interest under the lease at the time when he erected the buildings, as the lease was not then in existence.
Counsel for the respondent submit that the only reasonable inference than can be drawn from the facts is that Charles Bastable at the time when he erected the buildings had an agreement for a lease, and they contend that, if he had such an agreement, he stood in the same position as if the lease had been executed.
There is authority for the proposition that since the Judicature Act a tenant holding under an agreement for a lease of which specific performance would be decreed stands in the same position as if the lease had been executed: Walsh v. Lonsdale (1); Swain v. Ayres (2); Lowther v. Heaver (3), but I am not prepared to infer in this case that Charles Bastable had such an agreement,or to hold that, if he had, he stood in the same position as if the lease had been executed.
Counsel for the respondent also asked this Court to infer that the houses were built in the period between the 25th March, the date from which the term of years granted by the lease commenced, and the 20th September, 1836, when the lease was executed. Even if such an inference were drawn I do not think it would assist the respondent, as it would not establish that at the time when the houses were built Charles Bastable was entitled to the lessee’s interest in the lease. It is, I think, well settled, that where the term of years granted by a lease is expressed to commence upon a date prior to the execution of the lease, the actual interest of the lessee does not commence until the execution of the lease: Jervis v.Tomkinson (1); Cooper v. Robinson (2), and I do not think that a different rule applies in cases where prior to the execution of the lease the lessee has entered into possession and built upon the demised land.
I am of opinion that the respondent has failed to establish that the lease of the 20th September, 1836, was one in respect of which the condition prescribed in s. 46, sub-s. 1, clause (d), was complied with. He has therefore failed to establish that such lease was a “building lease”as defined in that section, and it follows that he has failed to establish his right to a reversionary lease.
I am therefore of opinion that this appeal should be allowed and the order of the Circuit Court Judge discharged.
MURNAGHAN J. :
Under s. 47, sub-s. 1, of the Landlord and Tenant Act, 1931, “At any time within seven years before the expiration of a building lease any person in possession of the land or any part of the land comprised in such lease and holding the same under such building lease . . . shall be entitled to obtain . . . a reversionary lease” under the conditions stated in the section.
The applicant in this matter is the assignee of the lessee’s interest in a lease, dated 20th September, 1836, for a term of 99 years from the 25th March, 1836, and he claims that this lease is a building lease. The applicant has complied with all the other requisite conditions and the only point in dispute is whether the lease referred to is a “building lease.” The learned Circuit Court Judge found in favour of the applicant, but, on appeal to the High Court, the two Judges who heard the appeal were divided in opinion and the appeal has thus been brought to this Court.
By the Landlord and Tenant Act, 1931, s. 2, “lease”in that Act “means an instrument in writing, whether under or not under seal, containing a contract of tenancy in respect of any land in consideration of a rent or return and shall include a fee farm grant.” Sect. 46, sub-s. 1, enumerates the conditions requisite for a “building lease,”of which it is only necessary to mention clause (b):”there are permanent buildings on such land,” and clause (d):”such permanent buildings were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease.”
The premises, the subject-matter of the application, appear to be situate in a good quarter of the town of Kanturk, called Egmont Row, and there is very slender evidence to show when the buildings were erected. The original lease is not forthcoming, nor was it registered, and no copy has been produced. There is no evidence as to the existence of the landlord’s counterpart. The lease was assigned in the year 1840 and the assignment is not forthcoming. This assignment was, however, registered in the Registry of Deeds and the memorial abstracts a recital of the original lease. It was dated the 20th September, 1836, and made by the then Earl of Egmont to Charles Bastable, junior, for a term of 99 years from 25th March, 1836, at the yearly rent of £8 14s. 4d. The parcels in the lease are described as “all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses with out-offices, buildings and concerns attached thereto situate at Egmont Place in or near the town of Kanturk in the parish of Clonfert, Barony of Duhallow and County of Cork, and containing the number of feet and bounded as in said lease particularly mentioned and described.” In the indenture of the 14th July, 1840, Charles Bastable, junior, is described as gentleman.
The main case put forward for the applicant was that this recital proves that at the date of the making of the lease three houses had been built by Charles Bastable, junior, and from this the Court is asked to infer that Charles Bastable had an agreement with the Earl of Egmont for the grant of a lease in consideration of building these three houses, and that the agreement is one of which specific performance would have been granted by the Court of Chancery. Once this is established, it is said that Charles Bastable had an equitable interest in the lands sufficient to make him come within the words “entitled to the lessee’s interest under said lease.”
Mr. Justice Hanna took the view that all this was possible but was mere speculation and that no inference could be drawn from the amount of the rent as compared with a present valuation of £48.
Mr. Justice O’Byrne thought it unreasonable to assume that Bastable erected these houses without an assurance that he would be allowed to enjoy them, and that the proper inference was that Bastable had an agreement for a lease when he erected these houses. Mr. Justice O’Byrne held that, although no lease had been granted when the premises were erected, Bastable was entitled to the lessee’s interest in equity, and that such equity would satisfy the words used in s. 46, sub-s. 1 (d), “entitled to the lessee’s interest under such lease,” although no lease had in fact been made.
The description of the parcels in the memorial of the assignment of 14th July, 1840, is not very clear, but it is aided by a recital of the parcels as contained in the lease in a settlement of the lessee’s interest made in 1867, where they are described as three houses, and measurements are given which are not found in the memorial, suggesting that the original lease was before the draughtsman. It is therefore proved that the buildings were erected by Charles Bastable, junior, prior to the execution of the lease. But that there was an agreement for a lease defining the term, the rent and the other clauses is a fact of which I believe there is no real evidence. In civil cases the onus of proof can be discharged upon the balance of probabilities but some foundation must be laid, otherwise everything is mere speculation. As Lord Loreburn L.C. puts the matter in Owners of Swansea Vale v. Rice (1):”What you want is to weigh probabilities, if there be proof of facts sufficient to enable you to have some foothold or ground for comparing and balancing probabilities at their respective value, the one against the other.” Even if such an agreement for a lease could be inferred I should wish to reserve an opinion as to whether the person entitled to the benefit of such an agreement could properly be described as “entitled to the lessee’s interest” under a lease at the time of erection of the buildings.
There is, however, one matter which, as it seems to me, does give a foothold for comparing probabilities. The lease is dated 20th September, 1836, but the term commences to run from 25th March, 1836. There must have been a reason for this, and the parcels stated to be in the lease are “all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses.” In view of these words and the commencement of the term as of 25th March I feel that I am entitled to say that Charles Bastable was let into possession on 25th March and had erected and altered the houses before 20th September. There remains the question whether on this view of the facts the lease was a “building lease” as used in the Act of 1931.
In the strict view of the common law the delivery of a lease created a mere interesse termini which became transmuted into possession by entry on the premises. In the absence of evidence to the contrary delivery is presumed to have taken place on the date of execution, viz., 20th September, 1836, and before this date in one sense Charles Bastable had no interest in the land. But where the commencement of an estate for years was limited from a time past, this limitation was not without effect. In Cruise’s Digest of the Law of Real Property, Vol. 1, Title VIII, chap. 1, sect. 15, it is stated:”If the lessee enters before the term when the estate for years is to commence, it is a disseisin: and no continuance of possession, after the commencement of the term, will purge it, or alter the estate of the lessee.” Sect. 17 reads:”Where the commencement of an estate for years is limited from a time past, and the lessee was in possession prior to that period, it shall be intended that he entered and occupied before, by agreement; therefore it is not a disseisin”: citing Waller v. Campian (1).
But even if strictly at common law the lessee’s interest arose from delivery of the deed, the matter does not depend upon the position at common law. I have already referred to the special definition of lease contained in s. 2 of the Landlord and Tenant Act, 1931, as meaning an instrument in writing “containing a contract of tenancy in respect of any land in consideration of a rent or return and shall include a fee farm grant.” At common law the relationship of lessor and lessee was founded upon tenure, and an important change was made by Deasy’s Act, 1860, which by s. 3 replaced tenure and substituted contract as the basis of the relationship of landlord and tenant, and the section did away with the necessity for a reversion. This section was, however, held not to be retrospective: Chutev. Busteed (1) and, accordingly, a fee farm grant made prior to the Act of 1860 did not create the relationship of landlord and tenant as no reversion was reserved to the grantor. It has not been argued that the lease in the present case, made in the year 1836, did not contain a contract of tenancy within the meaning of the definition in s. 2 of the Landlord and Tenant Act, 1931, nor do I think it could be so held. The special mention of a fee farm grant as being included in the definition irrespective of any mention of the date of grant is an indication that the fee farm grant with which the Court was concerned in Chute v. Busteed (1) would be included under the special definition of “lease” in s. 2.
Once, therefore, it is accepted that the lease in the present case is an instrument containing a contract of tenancy in respect of land, the term itself, which is a material portion of the contract, must be considered. The lessee’s interest under the contract was made to run from 25th March, 1836; the houses were built after that date and during the term created by the contract. To say that Charles Bastable, junior, was entitled to no interest in the lands until the date of the lease, viz., 20th September, 1836, seems to me to ignore the fact that this contract granted the lands from 25th March, 1836. If Charles Bastable, junior, was under the contract entitled to the lessee’s interest on and after 25th March, 1836, he seems to me fairly to come within the words of s. 46 as being the person who at the time of erection of the buildings was entitled to the lessee’s interest under the lease. I admit that the phrasing of the section is more appropriate to a lease which operates at its date or in futuro: but the law allows a lease to be made from a date that is past.
In my opinion the meaning of the definition is that the buildings must have been erected after the date of commencement of the term created by the contract of tenancy and by the person who was under the contract of tenancy the person entitled to the lessee’s interest in the term at the period when the buildings came to be erected. In short, the definition meant that the buildings were erected by the owner of the lessee’s interest.
In my opinion the lessee is entitled to a reversionary lease.
MEREDITH J. :
The applicant claims a reversionary lease under s. 47, sub-s. 1, of the Landlord and Tenant Act of 1931. He is entitled to the lessee’s interest under a lease, dated the 20th September, 1836, and made between the Earl of Egmont of the one part and Charles Bastable of the other part for the term of 99 years from the 25th March, 1836, at the yearly rent of £8 14s. 4d..
The only question in dispute is whether this was a”building lease” within the meaning of the Act, and that depends upon whether certain permanent buildings which had admittedly been erected on the lands on the 20th September, 1836, were erected by Charles Bastable at a time when he was entitled to the lessee’s interest under the lease.
The contention on behalf of the applicant is that Charles Bastable would never have erected the buildings unless he had obtained an agreement for the lease, and that the inference that he was equitable owner is irresistible. Apart from the point that it is somewhat doubtful that such equitable ownership would satisfy the terms of the statute, the inference is mere conjecture. If the applicant had examined the registry of title and had proved that the Earl of Egmont was only a limited owner and could not have made a lease for 99 years unless the lease was a building lease, he would then have secured a foothold of fact on which to base a legitimate conclusion as to a matter of fact, but, apart from some such foothold of fact, the suggested inference is mere conjecture.
The applicant, however, has procured the memorial of an assignment of the lease. The assignment, dated the 14th July, 1840, was made between Charles Bastable and James Finn, and the assignment is recited to be one”whereby after reciting that by indenture of lease bearing date the twentieth day of September one thousand eight hundred and thirty-six the Right Honourable Henry Frederick John James Earl of Egmont did demise . . . unto the said Charles Bastable his executors, administrators and assigns all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses with out-offices, buildings and concerns attached thereto.” The Court must construe and determine if possible what is meant by the expressions “had lately erected and built” and “since then and lately made into three dwelling-houses.” To my mind it is perfectly clear that the first expression, “had lately erected and built,” recites what was recited in the lease, and that the second recites what was recited in the assignment. The question then is what was the meaning of “had lately” in the lease. To my mind, from the natural
point of view of such a lease, the erection would not, and could not properly, have been described by the words “had lately erected and built” unless the erection had taken place after the 25th March and prior to the 20th September, the date of making the lease. Accordingly I am prepared to find as a fact that the buildings were erected between the 25th March, the date from which the term was granted, and the 20th September, the date from which the grant of the interest was actually made.
But prior to 20th September Charles Bastable was not entitledthe conjecture of equitable title being out of the wayto any interest under the lease. There is nothing in the Act which would enable the Court to hold that Charles Bastable was to be deemed to be entitled to that to which he was not in fact entitled. That being so, the applicant’s only hope of getting home is by relying on some estoppel. But the grant of the term as from the 25th March, which determines the date on which the first gale of rent accrues and the date on which the lease is to expire, is not a representation that as a fact Charles Bastable was entitled by agreement or otherwise to the lessee’s interest under the lease as from the 25th March. Hence there is no estoppel. To my mind the contention that the Act contemplates leases made before Deasy’s Act, and the further contention that this involves construing a lease of 1836 as if it were made after 1860, is a contention that leads nowhere unless an estoppel could be based merely on the contractual relation created by the lease. No attempt was made to show how such an estoppel would arise. In my opinion no basis for any estoppel that would meet the requirements of the case is to be found.
I do think that the case is clearly within the spirit and intention of the Act, and points to a casus omissus. But even if it were perfectly clear that there was a casus omissus, the Court cannot even strain language so as to remedy the omission to the prejudice of existing legal rights.
GEOGHEGAN J. :
I agree with the Chief Justice for the reasons stated by him in his judgment.
JOHNSTON J. :
The Landlord and Tenant Act of 1931, interfering fundamentally with the common law rights of “landlords,”enacted that a lessee of land who occupied under a “building lease,” was to be entitled, when the lease had expired or was about to expire, to insist upon getting from the landlord a “reversionary lease” on terms that were to be fixed by the Circuit Court Judge. The expression,”building lease,” is very carefully defined by s. 46, sub-s. 1, and, of the five paragraphs of that sub-section, there are only two which are involved in the present controversy.
Paragraph (b) provides that one of the conditions is that there should be “permanent buildings on such land”;and paragraph (d) expresses a further condition: “Such permanent buildings were erected by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease.” The Legislature evidently wished to draw a clear distinction between buildings which were the property of the landlord at the time of the making of the lease and buildings which were erected by the lessee in pursuance of the lease or of a promise of the lease. It was only land upon which there were buildings of the latter character which came at all within the purview of the legislation.
When Bastable was assigning this property to Finn in 1840, it was necessary that his title to the same should be set out in the deed of assignment. We have been supplied with a copy of the memorial for registration of that deed (which was executed on July 14th, 1840) and the following recital of the lease in question is to be found therein:
“Whereby, after reciting that by indenture of lease bearing date the twentieth day of September one thousand eight hundred and thirty-six, the Right Honourable Henry Frederick John James, Earl of Egmont, did demise, grant, set, and to farm let unto the said Charles Bastable, his executors, administrators and assigns, all that and those the piece or plot of ground whereon the said Charles Bastable had lately erected and built two dwelling-houses since then and lately made into three dwelling-houses with out-offices, buildings, and concerns attached thereto, situate at Egmont Place in or near the town of Kanturk, in the parish of Clonfert, Barony of Duhallow and County of Cork, and containing the number of feet and bounded as in said lease particularly mentioned and described, and for the term of ninety-nine years from the twenty-fifth day of March, 1836, at the yearly rent of £8 14s. 4d.”
Now, the Act of 1931 provides that the permanent buildings are to be erected “by the person who, at the time of such erection, was entitled to the lessee’s interest under such lease.” That is to say, the lease is to be made and then the lessee is, at his own expense, to erect the buildings. He becomes entitled to the land and the buildings, subject to the payment of the ground rent, for the term of 99 years, and, at the end of that period, his successors in title become entitled to a reversionary lease for another period of 99 years as a result of the legislation. If the Act of 1931 were to be construed in accordance with its strict common law phraseology, a great number of lesseesor their successors in titlewho could show a genuine equity to a lease, would be deprived of the benefit of the legislation. From the earliest times it has been the practice of landowners who wished to “develop” their estates to enter into preliminary agreements with building contractors and even with persons who might want to erect houses or buildings on land as a single speculationto give building leases when the houses or buildings had been erected or even partially erected. This is a method of securing the rent on the part of the landowner to which exception cannot be taken, and I think that some of the members of this Court are agreed that if there were evidence before us of such an agreement, the lessee would be entitled to the statutory right. Judge O’Donnell in the Circuit Court and Mr. Justice O’Byrne in the High Court both took the view that in this case there was such evidence, and in my opinion they were right.
The evidence upon which I base that view is contained in the memorial for registration of the assignment of the premises by Charles Bastable (the original lessee) to James Finn. This memorial is a solemn statutory document, verified by affidavit, engrossed on parchment and deposited in the Registry of Deeds; and the Act of 6 Anne c. 2 imposes a statutory penalty in the case of any person”foreswearing” himself in regard to the affidavit which must accompany the memorial. From my experience in conveyancing matters, I think I may say that a very high degree of care is always exercised in the preparation of the memorial and the affidavit.
Now, it seems to me that the recital in the memorial tells the whole story with remarkable brevity, but with an astonishing degree of completeness. A lease was made by the Earl of Egmont on September 20th, 1836, demising a certain piece or plot of ground for 99 yearsa lease which was to run not from the date of its execution, but from March 25th, 1836. The plain meaning of the lease was that the rent also was to run from the earlier date. Further, the person who prepared the lease was careful to recite presumably on the instructions of his clientthat Bastable had “lately” erected two dwelling-houses upon the plot of ground which “since then” had “lately,” been made into three dwelling-houses. It was considered necessary to set out all these matters in the lease. Why was it necessary to do soparticularly the payment of the rent from a period of six months anterior to the date of the leaseif there had not been an earlier agreement between the lessor and the lessee, which the lessee could have enforced in equity? It is plain, too, that the rent reserved was a “ground rent” only, and that the considerable increase in value which the land acquired between 1836 and 1840 belonged to Bastable as a result of the buildings that he had erected. Further, ninety-nine years has been regarded for a century and a half as the customary period of a “building lease.” That is the period that is set out in the Settled Land Act, 1882, the Settled Estates Act, 1877, the Landed Poperty Improvement Act, 1860, and many others.
There is one further factor of importance. It will be observed that the rent that was fixed by the parties was not a full sum, but a broken sum which was probably an aggregation of a frontage rent at so much per foot. This suggestion is based on the fact that the plot leased was evidently described in the lease as “containing the number of feet . . . as in said lease particularly mentioned.”
I think that there is direct evidence that the houses were built by the lessee, that on September 20th, 1836, they were “lately” built, and that the term was to run and the rent was to be paid as from a period six months earlier than the actual date of the lease. I think, further, that the matters that I have mentioned afford, at any rate, prima facie evidence of a preliminary agreement which, on the lessee fulfilling his side of the agreement, namely, on his building the houses, would have been enforced in equity. The landlord has done nothing to rebut that evidence except to point to a different account of the number of the houses in an assignment which was made many years later. I am content to accept the facts for which Charles Bastable, who was the original lessee, made himself responsible at the very inception of the transaction.
There is one case that I should like to refer to for the purpose of showing how these arrangements for the “development”of building land worked out in practice. In the case of Lowther v. Heaver (1) Lindley L.J. in the Court of Appeal said at p. 265:”One knows perfectly well how these building agreements work in practice. One knows perfectly well that they will not work at all unless the builder can go and borrow money upon his buildings as they proceed, and the whole scheme of the working of a building agreement would be upset if a person could not lend money to a builder in the confidence that when the right to obtain a lease accrues he is safe.” In the same case Cotton L.J. said:”Now, I am of opinion that the late Master of the Rolls was correct in saying, as he did in Walsh v. Lonsdale (1), that a tenant holding under an agreement for a lease of which specific performance would be decreed stands now in the same position as if the lease had been granted.” The case of Lowther v. Heaver (2) is referred to with approval by Farwell J. in Manchester Brewery Co. v. Coombs (3), and by Horridge J. in Inland Revene Commissioners v. Derby (Earl) (4). I think that the terms of the Act of 1931 are satisfied if it is proved that there was an arrangement between the two that if the houses were built or even partially built the lease would be given, I think that the condition of the Act would be fulfilled if the houses were built under and by virtue of such an arrangement, and if the lease was, as a consequence, given.
Under the circumstances, I am of opinion that Finn is in a position to demand a reversionary lease under the Act and that the order of Judge O’Donnell should stand.
Hardman v. Jordan
[1944] IR 1
Haugh J. 1
This is an action brought by the plaintiff, Townley Garratt Hardman, against John Jordan and five other defendants to recover possession of the premises set out in the special indorsement of claim to his originating summons, and is in the nature of an ejectment for non-payment of rent brought and founded on s. 52 of the Landlord and Tenant (Ir.) Act, 1860, and because two years’ rent was due to the plaintiff at the time of the institution of the proceedings by one, James O’Neill, who is not a party to the suit.
The originating summons, issued on the 13th March, 1942, was served on the named defendant, John Jordan, of No. 1 Brookville Park, and a copy thereof was in addition served on Mrs. Bridget Murphy of 4 Brookville Park, John Hughes of 5 Brookville Park, Thomas White of 6 Brookville Park, and through their solicitor on George Sisson of No. 2 Brookville Park, and Peter E. O’Brien of No. 3 Brookville Park. All these named parties entered an appearance to this action, and by order of the Master made on the 5th of June, 1942, these appearance parties were named as additional defendants.
A copy of the summons was on Thursday, the 30th of April, 1942, served on the Official Assignee in Bankruptcy as assignee of the property of one, James O’Neill, owner of the leasehold interest in the premises, who was adjudicated a bankrupt on the 11th day of June, 1940. No appearance to these proceedings has been entered by the Official Assignee.
The defendants are sued, being six persons in possession and occupation of six houses, Nos. 1 to 6 Brookville Park, erected on the whole of the plaintiff’s lands. They claim protection under s. 51 of the Landlord and Tenant Act, 1931 (1), and have submitted that whatever order is made, it should in no way operate to disturb, or otherwise affect, their interests in these dwelling-houses.
The plaintiff in reply has contended that this section does not apply to these defendants or these houses, or that if it does, then not in the manner alleged by the defendants. The matter was argued before me for two days, and at the outset I would like to express my thanks to counsel for the plaintiff and defendants, respectively, for the help they have given me. They discussed the law in great detail, and have greatly assisted me in coming to a conclusion.
Before I announce my decision and the reasons therefor I feel I should at this stage state the facts as I find them proved in evidence given orally and through the documents handed in.
The owner in fee of these premises is the plaintiff, Dr. Garratt Hardman, who acquired this interest by deed of transfer, dated the 17th August, 1936, from the former owners in fee, and is now, as appears by the land certificate of the register of freeholders for the County of Dublin, described as the “full owner of the part of the land of Coolock, situate on the west side of the road from Coolock to Dublin, measuring in front to the said road 195 feet, in the rere 140 feet, and in depth from front to rere on the north 150 feet, and on the south 150 feet, as shown on the registry map of the townland” and burdened with the leasehold interest of one, James O’Neill, who acquired such interest for a term of 999 years from the 1st November, 1935, at the yearly rent of £45, payable thence-from to the plaintiff.
James O’Neill originally acquired his interest from the former freehold owners, one, Dr. John Edward Cherry, and one, Michael Cullen, of Coolock, and the grant to him was a building lease of ordinary type for a term of 999 years, with the usual covenants and conditions, most of which are not material to these considerations. A supplemental deed was found. to be necessary, and was executed on the 28th day of April, 1936. This supplemental deed providedinter alia that the lessee, O’Neill, would erect on the plot six houses of certain standards and would not sub-let any one of them at a rent less than one-sixth of £45, that is, not less than the sum of £7 10s. in respect of each house. The reason for this step is obvious: O’Neill had become liable to pay to Dr. Hardman the annual sum of £45, whose security therefor lay in the premises he had granted to O’Neill. The then fee owners, to protect themselves, ensured that O’Neill would be thenceforward entitled to a yearly rent in his turn of a sum equal to or greater than £45. In addition there was reserved to the owners in fee a right immediately to re-enter the premises if and as soon as any portion of the £45 rent became due and unpaid.
In these circumstances the building lessee, in pursuance of his rights, erected these six dwelling-houses, now known as 1 to 6 Brookville Park, all of which are now occupied by the six defendants. They in their turn paid substantial sums for these houses and as a result of each payment by each sub-lessee O’Neill’s interest of 999 years, save the last three days thereof, was thereby acquired, subject to a rent of £8 in respect of each house, payable by each sub-lessee to the building lessee, O’Neill.
So far the position is an ordinary one and can be described in ordinary parlance in one short paragraph. From the plaintiff’s point of view the transaction was a mere investment of capital on his part to secure the fixed annual payment of a sum of £45, his security therefor being the land. O’Neill’s transaction was to purchase a plot of ground as a speculative builder, his profits being determined solely by what he earned on the sale of the six houses (the profit earned in respect of the difference in rent being only a sum of £3 0s. 0d. per annum). The defendants bought their houses for substantial sums on the assumption of their undisturbed possession thereof so long as they paid the yearly rent of £8 reserved in their respective sub-leases to their immediate landlord, O’Neill.
In these circumstances things pursued a normal course for some years to the satisfaction of all persons concerned. However. on the 1st November, 1940, a year’s rent became due and was unpaid by the immediate landlord, O’Neill, to his superior landlord, the plaintiff. An additional year’s rent became due on the 1st November, 1941. These two sums, with further additional arrears, are now due by O’Neill and remain unpaid to Dr. Hardman. The defendants for their part paid what was due by them to O’Neill up to the time he was declared bankrupt, and from that time on to the Official Assignee in Bankruptcy, until such time as the Assignee refused to accept any further payments. The payments so made were later returned to the defendants by the Official Assignee, on his determination that these rents (the actual value of which was £3 0s. 0d. per annum) were assets of the bankrupt which would not vest in him. The defendants admit their continued liability to pay these sums to the person lawfully authorised to receive them, but deny a dual obligation of paying both O’Neill and Dr. Hardman any rent due by O’Neill to Dr. Hardman.
The plaintiff, following the bankruptcy proceedings, sought to eject the premises by suing the Official Assignee; but on the latter showing that he no longer claimed any interest in these rents, the proceedings were dismissed out of Court without costs to the plaintiff.
O’Neill is still an undischarged bankrupt, and as such, it has been contended by the plaintiff, he cannot be joined as a party in the present proceedings.
The defendants, while admitting their liability and readiness to pay whatever is due by them to O’Neill, deny any liability to make good O’Neill’s default to the plaintiff, individually or collectively. It has been submittedI think correctlythat before any such liability can arise between the sub-lessees and the superior landlord, Dr. Hardman as such superior landlord should have availed of s. 20 of the Landlord and Tenant Act (Ir.), 1860, as soon as O’Neill had been one month in arrear with his rent, by serving the proper notices as required by this section. If he had so acted it seems that they, the defendants, would have been obliged therefrom to pay their joint rent of £48, to Dr. Hardman, who in his turn would make such adjustments as would follow with the immediate landlord, O’Neill. As he has not so acted. I turn to see what would the position have been if these proceedings had been brought on the same set of facts prior to the passing of the Landlord and Tenant Act, 1931.
The plaintiff’s right to recover possession of these premises, on one year’s rent being due, is a right in rem. The rent is one that is due out of the land itselfso primarily if one year’s rent is due the plaintiff becomes entitled to possession of the whole of the premises.
However, it has been shown to my satisfaction that prior to the enactment of the Act of 1931 the defendants in similar circumstances could have come into Court with the amount of £90, to cover the amount of rent due and sued for, and on paying that sum, together with all costs so far incurred, their right to continue on in undisturbed possession of the premises would be recognised by the Court. That in effect meant that in order to remain they had to shoulder O’Neill’s liability, while the superior landlord would emerge from the whole proceedings without one penny loss.
The defendants now contend that since 1931 that position has been changed by law; that that former liability no longer attaches to them; that they can in no adverse way be affected by O’Neill’s default, past or future.
The plaintiff, on the other hand, submits that such is not the position, for two reasons:first, that the defendants cannot claim any rights under this Act as it does not apply to them, and, secondly, that, if it does, it does not bear the interpretation they attribute to it.
While in form this case appears as an ejectment for non-payment of rent, it has been argued to determine where lies the liability to pay Dr. Hardman this sum of £90 and that is the matter I feel I really have to determine.
This determination involves two major considerations, to which much time and attention has been rightly given by counsel, which I will deal with in turn.
First, the plaintiff asserts that s. 51 of the Act of 1931 does not apply to the defendants or these lands at all, on the ground that the leasehold interest of O’Neill is not a”building lease” within the meaning of s. 46, sub-s. 1 (a),of the Landlord and Tenant Act, 1931, in that the lands demised are not wholly situate in an urban area. If I were to take that section literally and by itself I would have no hesitation whatever in coming to the conclusion that they are situate in an urban area. One look at the map would convince any person of that fact. They are within one hundred years from the city boundary, on the main road from the city, with all the amenities of suburban Dublinso that if one had to decide whether the area was urban or rural the evidence is coercive in favour of the answer, “urban.” However, the matter is not so easy, because before s. 46, sub-s. 1 (a), can be construed it is necessary to turn to the definition section, where the expression”urban area” is defineda definition to which the utmost regard must be paid. Sect. 2 of the Act says:”the expression ‘urban area’ means an area which is either a county or other borough, an urban district, a town, or a village;” accordingly before Mr. Hooper can succeed in his contention I must be able to substitute for the words “urban area” in s. 46 the word “village” in s. 2, which means in effect that I must be satisfied in this case that the lands demised to O’Neill in his building lease are situate wholly in a villageas it is agreed that the other features required in s. 46 aforesaid are all present in this case.
In addition, Mr. Hooper has drawn my attention to the following matters:he has referred to the agreement, dated the 28th April, 1936, which is expressed to be by way of endorsement and supplemental to the original building lease, dated the 20th December, 1935, and made between the former owners in fee and O’Neill. It is quite obvious that this supplemental deed was drawn and executed because it was felt by the then superior landlords that s. 51 of the Landlord and Tenant Act, 1931, might well apply to these premises, and should the building lease ever terminate for one reason or another they, the owners in fee and predecessors of the plaintiff, took steps to ensure that the rent to be payable by the future sub-lessees should equal or exceed the sum of £45 payable by O’Neill to them.
I accept that as being the only possible reason for this supplemental agreement being executed, and while I feel that it is an element to be considered in the present case, at the same time I cannot be guided by their then fears or apprehensions on this matter, if, in fact, these premises are not in the village of Coolock within the meaning of the said Act; and the existence of this agreement of itself does not guide me to a conclusion on this particular issue.
Mr. Hooper then referred me to Thom’s Directory for the current year. In that issue, Brookville Park is set out as being in the village of Coolock, in that the inhabitants of the admitted Coolock are grouped with the residents of Brookville Park under the heading Coolockto some extent that piece of evidence has helped me in reaching a conclusion on this question.
Again, it has been shown that in all the sub-leases the premises sub-let are described as being in Coolock, and last, but by no means least, the originating summons has been addressed by the plaintiff to the defendant, John Jordan, of “No. 1 Brookville Park, Coolock, in the County of Dublin,” and in his special indorsement of claim the plaintiff states that the claim is “to recover possession of lands . . . etc., and known as 1 to 6 Brookville Park, Coolock, situate in the Barony of Coolock and County of Dublin.”
The matter does not quite end there. The plaintiff swore an affidavit in paragraph 3 of which he describes the premises as the “dwelling-houses and premises known as 1 to 6 Brookville Park, Malahide Road, Coolock, in the County of Dublin.” It is on these facts that Mr. Hooper has urged that this plot, now known as Brookville Park, is now part of the village of Coolock. He has submitted that if Coolock is ever to extend in a southern direction it has now so extended; that this block of houses could not now be physically or geographically nearer to the old village than it now is, because the vacant area north of these houses must so remain as long as the transmission lines pass overhead(1); beyond that small area there exists another similar group of dwelling-houses, and beyond these the residences,”Greenfields” and “Lark Hill House,” upon the grounds of which it has not been possible or feasible to build, and next, the Civic Guard barracks. Accordingly they are as near as they can be from the southern end as if they had originally set out to put themselves within the village by deliberate act, and they are in fact an extension of same despite their proximity to the City boundary.
Mr. Walker, on the other hand, and for reasons that are obvious, approaches the problem from another viewpoint. When the case opened he made the point with an apologetic air, and stated he did so as he felt he must make every point in his client’s favour that the Act seemed to allow. However, the more he dwelt upon it, and the more he argued, the greater its appeal grew. For my part I thought it a point of substance from the beginning, and I can recall telling Mr. Walker that once he brought it to my notice, despite what he thought, I felt it was one of some substance, and I am still of the same mind. I am of the opinion that this question has a real bearing on the case, and is by no means free from difficulty. After the first and only adjournment of the hearing, and after he had called Mr. Kavanagh as his witness, Mr. Walker then assured me he attached the utmost importance and significance to this question, and addressed me at great length on the subject, and he may take it from me that in no way do I bind him by his previous statements, but regard it as a genuine and relevant submission on his client’s behalf. In brief, he has urged that the map itself shows what is the village of Coolock and what is not. According to the map Brookville Park is not within the village or part of Coolock; but it is a group of city-like houses lying between the City boundary and the village proper, but much nearer the City boundary. He points out that the residents thereofthat is the defendantsshop in the city, work in the city, and have no real connection with the village, professionally, socially, in business or otherwise. He has submitted that the occupants of “Greenfields” or “Lark Hill House” would not like to be deemed as living in the village of Coolock that is, however, something I cannot answer as I have not heard their evidence on this point. On that assumption he has logically submitted that if the more immediate neighbours of the village are not members thereof, how much less can the inhabitants of Brookville Park claim to be such. On that basis it is possibly difficult to say where the line should be drawn. For myself, despite what he would say on the matter, I would find it difficult to hold that the occupant of “Lark Hill House,” who lives immediately beside the Garda barracks at Coolock, is not himself a member of that community; and in the absence of evidence on the subject I am inclined to think that he has been often so described. If he is in the village, why not the occupant of “Greenfields,” and so on down to the residents of “Brookville Park?”
In general that has been the evidence and argument on this point. Counsel have referred me to some cases that bear in some way on the point that have arisen on kindred sections and on different facts. It appears that no case on these two sections appears in any of the Irish reports and, accordingly, I feel that this is a case that must be decided on its own special facts and in the light of the Act of Parliament governing same.
Before I begin an examination of s. 51 itself I feel I must look at the Act as a whole, and I begin by a consideration of the long title thereof. The importance of the long title is so well known that I do not have to quote authority to justify my taking the long title of this Act into account. There is no ambiguity in the title of this Act, which begins by stating that it is to make provision for the further improvement and amelioration of the position of tenants in urban areasand to amend the law relating to the disturbance of such tenants, etc. The Act therein recites and demonstrates the general intention of the Oireachtas, which is clearly one in ease of tenants, a principle which I feel must guide me in the further consideration of its different sections. I move from the long title to Part V of the Act, which has been given over to special provisions in relation to building leases. A study of this part of the Act satisfies me that it has been enacted with special regard to the rights and interests of occupying tenants in possession of houses in urban areas, originally built under building leases; that it is intended to prevent any harsh dealing by a superior or immediate landlord with his sub-lessees, and in short, is intended to be purely remedial from the tenants’ viewpoint. That is a matter I feel I must keep in the forefront of my mind in deciding this first issue, and having regard to the evidence of Clinton and Fr. Byrne and the evidence of two of the defendants, and having paid particular attention to the map, and noted that in fact this group of houses could not in the present circumstances be built nearer to the admitted village of Coolock than they in fact now are, together with the facts:that the postal address seems to be Coolock, and that the terrace is described in the current edition of Thom’s Directory as being in Coolock, and that the plaintiff and his solicitor addressed the various legal documents to the defendants living at “Malahide Road, Coolock, in the County of Dublin,” before they realised the significance of such descriptionI hold that this plot is in and is part of the village of Coolock within the meaning of s. 46, sub-s. 1 (a), and s. 2 of the Landlord and Tenant Act, 1931, and that the defendants ale therefore entitled to such benefits as s. 51 thereof affords to them.
Having stated my decision on this point, I add that I have done so with some doubt and hesitation. I repeat that I have in the main been guided by the apparent intention of the Act. When it is realised that if this same group of houses was erected alongside the village of Glencree in the Dublin mountains, this section of the Act would clearly apply, there is something unreal in refusing to apply it because of the proximity of the old Coolock to the City boundary, and the still closer proximity of these houses and this plot to the same boundary; I have resolved that doubt in the favour of the defendants because of the principle of the Act as a whole, and because I am of the opinion that there is evidence that justifies that view.
I now move to the second argument in this case. In effect Mr. Walker has submitted that s. 51 cannot, and ought not, to influence the Court in the defendants’ favour, because he says the section is meaningless on this point, through faulty draftsmanship, and not because of any intention so expressed by the Oireachtas in the Act of Parliament.
The section begins by stating “Where a building leaseis terminated . . . by ejectment for non-payment of rent . . . the following provisions shall have effect, . . . no sub-lease of the land . . . which . . . is a proprietary lease shall be terminated” by reason of such ejectment. On these words Mr. Walker has urged that on a plain reading of that much of the section, despite what was intended, the relief introduced for the first time in favour of such class of sub-lessees cannot be given effect to by the Court in an action for ejectment, until, in the words of the section, “the building lease has been terminated by ejectment for non-payment of rent,” with special emphasis and reliance on the wordterminated, and that such termination does not in fact occur in the case of a building lease unless and until the sheriff has in fact ejected the premises. He argued further that while these proceedings were being argued before me the building lease was not then, and could not in any event, have been terminated by ejectment for non-payment of rent, which being a condition precedent to any such right or relief, ousted the defendants from any rights under the section aforesaid. Counsel continued by stating that, if he were correct in that submission, as the defendants had not brought into Court the amount of the rent due, or offered at any time to pay same, his client is accordingly entitled to the relief he seeks, namely, to eject the entire premises free and rid of the respective interests of O’Neill and the defendants.
I am slow to hold that an entire section of an Act of the Oireachtas should be deemed to be meaningless and of no practical effect, unless such conclusion is inescapable. If I yield to the plaintiff’s contention and allow the ejectment to go, I ask myself how can the defendants obtain the benefits clearly reserved to them by s. 51. If, by virtue of such ejectment, they are no longer in possession, and have no further interests of a legal nature in the premises, I see no possible way of making effective the provisions of clauses (b) and (c) thereof. Mr. Walker agrees that that is the position, but blames the draftsman, an assent to which must mean that on a literal construction and reading of the first five words of s. 51, it can never achieve or give any redress in a case on this particular point.
In my view this section has been enacted to meet a case of this exact nature, and is intended to protect persons in the position of the present six defendants, and to allow a person in the position of the plaintiff in a summary way to determine the interest of the building lessee, O’Neill, and to have at the same time, and by the same proceedings, the former relationship that existed between the plaintiff and O’Neill changed to a similar relationship between the plaintiff and the defendants. On my reading of the whole section Dr. Hardman will henceforward, and after a notional ejectment of the O’Neill interest, become entitled to the O’Neill reversion on the sub-leases, and be further entitled to be paid the yearly rents of £8 up to now paid by each defendant to O’Neill, and to the covenants and conditions contained in the sub-leases made by O’Neill to the defendants. By virtue of the same section these sub-leases shall then become building leases within the meaning of Part V of the same Act, all of which will mean that the O’Neill interest will be forthwith determined, and give to the plaintiff all O’Neill’s former rights and obligations as between the plaintiff and the defendants.
I lastly ask myself how am I to give effect to such wish, and I find I am greatly helped in the form of order made in the case of Sisk v. Cronin (1). The bankrupt, James O’Neill, is not a defendant, but a copy of the summons was served on the Official Assignee on the 30th April, 1942, but no appearance has been entered by the Assignee in these proceedings. Following the principle in Sisk’s Case (1)there will be a decree for possession against the building lessee, O’Neill, without prejudice to the rights of all the defendants to retain possession of their respective premises under s. 51 of the Act of 1931. In making this order I do so with the rights of the plaintiff, as I view them, under the Act, in mindas he has not named O’Neill as a defendant the only other alternative open to me would be to dismiss the whole proceedings, which would leave the plaintiff entirely as he had begun; accordingly I make this form of decree in his ease on my construction of the section.
As it was necessary for the plaintiff to bring these proceedings to establish and ensure his own future rights, the defendants are not entitled to any order for costs as against the plaintiff; and as the defendants were obliged to defend these proceedings to the full to obtain the results they have achieved, they in their turn shall not be condemned in costs. Accordingly I decree ejectment in the manner stated, each side to bear their own costs.
The order made pursuant to the judgment of Haugh J. was in the following terms:
“To the Under-Sheriff of the County of Dublin greeting: whereas lately in the High Court of Justice, by a judgment of the same Court, it was adjudged that the plaintiff recover possession, as against the building lessee, James O’Neill, of the lands comprised in and demised by an indenture of lease dated the 20th day of December, 1935, and made between Michael Cullen and John Edward Cooper Cherry of the one part and James O’Neill of the other part and therein described as [the premises were then set out in detail] without prejudice to the rights of all the defendants to retain possession of their premises under s. 51 of the Landlord and Tenant Act, 1931, with the appurtenances in your bailiwick. You are hereby commanded to enter the same and without delay cause the said Townley Garratt Hardman to have possession of the said lands and premises with the appurtenances.”
This order was delivered to the Under-Sheriff, who professed inability to act upon it, but made no formal return to the order.
The plaintiff appealed to the Supreme Court (1) from the decision of Haugh J. and at the hearing of the appeal, by leave of the Supreme Court, the Under-Sheriff was represented by counsel.
In his notice of appeal the plaintiff asked that in lieu of the above order he should be given a plain order for possession, or, alternatively, an order for possession “saving the rights of the defendants to retain possession of the said premises on payment to the plaintiff of the arrears of rent due to him out of same under the lease in the summary summons mentioned.”
…………
SULLIVAN C.J. :
This is an action of ejectment for non-payment of rent, and the question raised by this appeal is whether the judgment entered for the plaintiff pursuant to the order of Mr. Justice Haugh, and the order for possession issued thereon to the Under-Sheriff, are in form correct and capable of enforcement.
The plaintiff and appellant, Dr. Hardman, is the owner in fee simple of the lands the subject-matter of this action, subject to the interest of one, James O’Neill, under a building lease, dated the 20th December, 1935, by which the lands were demised to him for a term of 999 years at the yearly rent of £45. That lease contained a covenant by O’Neill to erect six dwelling-houses on the lands demised. He built the six houses and subsequently sub-let each of them for the residue of the term of his lease less three days, the consideration in each sub-lease being the payment of a substantial fine and a yearly rent of £8.
The rent due by O’Neill to the plaintiff subsequently fell into arrear and the plaintiff brought this action in which he claims to recover possession of the lands demised by the lease of 20th December, 1935, together with the dwelling-houses erected thereon.
O’Neill had been adjudicated bankrupt before this action was instituted and he was not named as a defendant in the originating summons. John Jordan, a sub-tenant in occupation of one of the dwelling-houses, was named as defendant. A copy of the originating summons was served on the Official Assignee in Bankruptcy, and on the subtenants of the other houses. The Official Assignee did not enter an appearance, but the sub-tenants did, and they were, by order of the Master, named in the originating summons as additional defendants.
At the trial the defendants did not contest the fact that mole than one year’s rent was due by O’Neill to the plaintiff, but they relied on the provisions of s. 51 of the Landlord and Tenant Act, 1931, as entitling them to retain possession of their houses. That section provides as follows [He quoted the section, set out ante at p. 4.]
The learned Judge held that the lease to O’Neill was a building lease as defined by s. 46, sub-s. 1, of the Act, and that the sub-leases to the several defendants were proprietary leases as defined in sub-s. 2 of that section, and that the defendants were therefore entitled to such benefits as were conferred upon them by s. 51. His decision on that matter has not been questioned on this appeal. The order he made is in these terms:
“It is adjudged that the plaintiff do recover as against the building lessee, James O’Neill, possession of the lands comprised in and demised by an indenture of lease, dated the 20th December, 1935, . . . without prejudice to the rights of all the defendants to retain possession of their respective premises under s. 51 of the Landlord and Tenant Act, 1931.”
The order of possession issued to the Under-Sheriff recited the order made by the learned Judge and commanded the Under-Sheriff “to enter the lands and without delay cause the said Townley Garratt Hardman to have possession of the said lands and premises with the appurtenances.”
It is contended on behalf of the appellant that the order of possession cannot be executed by the Under-Sheriff, as he could not give clear possession of the lands to the appellant without removing the defendants from possession of premises which, under the judgment recited in the order of possession, they have a right to retain.
I do not think that contention is well founded. In my opinion the order of Mr. Justice Haugh and the order of possession are correct both in substance and in form. In Sisk v. Cronin (1) this Court gave the plaintiff a decree for possession of premises against one defendant without prejudice to the right of another defendant to retain possession of the premises under the Rent Restriction Acts. This Court would not have given a decree in that form if such a decree could not be executed.
In Haskins v. Lewis (2) the Court of Appeal in England held that an order for recovery of possession of premises might properly be made against the tenant, notwithstanding the fact that part of the premises was occupied by sub-tenants who had a right under the Rent Restriction Acts to retain possession.
I do not see that any difficulty will arise in executing the order of possession in the present case. If the Under-Sheriff enters upon any part of the premises sub-let to any defendant and declares to any person found thereon that, in execution of the order of possession, he on behalf of the plaintiff is taking possession of James O’Neill’s interest in the lands and premises demised by the lease of 20th December, 1935, he will have duly executed the order. Authority for that proposition will be found in the judgment of Hayes J. in O’Brien v. Murray (1).
In my opinion this appeal should be dismissed.
Southern Health Board v. Reeves-Smith
[1980] IR 29
Henchy J.; Kenny J.
S.C.
Henchy J.
15th November 1978
I have read the judgment of Mr. Justice Kenny and I agree with it.
Kenny J.
The applicants are the occupiers of St. Finbarr’s Hospital in the city of Cork which consists of extensive buildings surrounded by gardens, yards and open spaces. Part of the hospital premises was held by the applicants under four sub-leases which expired on the 24th March, 1964. Neither party seems to have known for a considerable period that these had expired and, subsequently, the applicants applied to the Circuit Court for reversionary leases under the Landlord and Tenant (Reversionary Leases) Act, 1958. It seems to have been conceded that the applicants were entitled to such leases in part of the property. The dispute before the Circuit Court judge was whether they were entitled to such a lease in the part coloured orange on the map of the whole hospital which was proved in evidence. The Circuit Court judge held that the applicants were not so entitled and they appealed to the High Court on Circuit. At the request of the applicants, the President of the High Court stated this Case for the opinion of this Court. To answer the questions which he has put, it is necessary to consider the four sub-leases, under each of which the applicants held part of the hospital.
By a sub-lease made on the 13th September, 1866, Mary Meade and Amos Newman let the part coloured orange on the map to the Commissioners for Administering the Laws for the Relief of the Poor for 99 years from the 25th March, 1865. As the sub-lessors held the land let by this sub-lease from the Church of Ireland Bishop of Cork, the sub-lease to the Commissioners by the sub-lessors contained elaborate provisions for the adjustment of the rent payable under it if the sub-lessors got a renewal of their lease at a higher rent than the one they had been paying. It was stated in this sub-lease that it was a renewal of a sub-lease which had been granted on the 13th September, 1846. In the sub-lease of 1866 there was a covenant by the sub-lessors that if they obtained a renewal of their lease from the Bishop of Cork, they would sublet the lands to the Commissioners for the term for which the new lease was granted less one year.
By another sub-lease of the 13th September, 1866, the same sub-lessors sublet to the Commissioners the lands on the said map coloured green for 99 years from the 25th March, 1865.
By another sub-lease of the 13th September, 1866, the same sub-lessors sublet to the Commissioners the lands coloured yellow on the said map for 99 years from the 25th March, 1865. There is a statement in this sub-lease that it is a renewal of a sub-lease of the 15th November, 1847.
By another sub-lease of the 13th September, 1866, the same sub-lessors sublet to the Commissioners the lands coloured blue on the said map for a period of 99 years from the 25th March, 1865, and it is stated in it that it is a renewal of a sub-lease of the 29th October, 1840.
Under the Act of 1958 a building lessee (defined by s. 2 as meaning the lessee under a building lease) is entitled to obtain from his immediate lessor a reversionary lease of the land held by him under such building lease. A”building lease” is defined by s. 4, and one of the conditions which must be satisfied if a lease is to be regarded as a building lease is “that there are permanent buildings on the land and that the portion of the land not covered by such buildings is subsidiary and ancillary thereto.”
The President of the High Court found (and his finding was not challenged on this appeal) that on the 25th March, 1964, there were no buildings on the land coloured orange other than the small projections of buildings into the north-west corner and at the south-east corner of the said land. He also found that the part of the land coloured orange which was not covered by the said small projections was not subsidiary and ancillary to the projections. He went on to find that at all times the land coloured orange was subsidiary and ancillary to the buildings on the lands coloured blue, green and yellow as the orange land was used as a kitchen garden for St. Finbarr’s Hospital for the benefit of the staff and the hospital inmates, and that it was also used to provide occupation for some of the staff of the hospital and as a place of recreation for some of the inmates.
Counsel on behalf of the applicants has argued that the four sub-leases should be treated as one lease because, in his submission, the making of the four sub-leases was merely a conveyancing device. He relied on the facts that the four sub-leases were made on the same day between the same parties and for the same term, and that they demised lands which adjoined each other and so should be treated as one lease for the purposes of the Act of 1958.
While the authorities establish that trustees with a power of sale only may sell leasehold land by sub-lease and may sell by sub fee-farm grant lands held under a fee-farm grant ( In re Judd and Poland’s Contract 2 ; Alexander v.Clarke 3 and In re Murphy, Boyd v. Siggins 4 ) the granting of the four sub-leases was not a conveyancing device. There were substantial conveyancing reasons why four sub-leases should be granted instead of one. Three of them were renewals of previously existing sub-leases and the areas sub-leased by them were those comprised in the leases made by the Bishop of Cork to the sublessors. There were covenants for renewal of the sub-leases if the sub-lessors obtained renewals of their leases from the Bishop of Cork. The rents payable under the four sub-leases were to be increased if the renewals obtained by the sub-lessors were at a higher rent. Indeed, it would have been impossible to grant one sub-lease in place of the four sub-leases because the lands let by the four sub-leases were related to the lands comprised in the leases made to the sub-lessors by the Bishop of Cork. Therefore, I would reject the argument that the four sub-leases of the 13th September, 1866, are to be regarded as one lease for the purpose of the Act of 1958.
The first question submitted by the President is whether the said four indentures of sub-lease (comprising together the lands coloured blue, orange, green and yellow on the said map) can and should be regarded as one lease of the said lands for the purposes of the Landlord and Tenant Acts, 1931 to 1971. The answer to this question is “No.” The second question is whether the land coloured orange on the said map (being subsidiary and ancillary to the buildings standing on the lands coloured blue, green and yellow on the said map) can and should be regarded as being comprised in a building lease for the purposes of the Landlord and Tenant (Reversionary Leases) Act, 1958. The answer to this question is “No.”
The order of the Circuit Court which dismissed this application was made on the 3rd July, 1975. The appeal to the High Court on Circuit was first heard on the 13th October, 1975. There were differences between the parties about the wording of the Case Stated, which was finally signed by the President on the 25th January, 1977. All cases in this Court are listed for hearing almost immediately after the lodgement of complete sets of the papers required for the hearing. This case was not heard until October, 1978. The delay in bringing this Case Stated before this Court has been excessive and the explanation offered for this is unsatisfactory. Those charged with the carriage of a Case Stated or conducting appeals in this Court should bear in mind that their duty to the Court and to their client is to move with reasonable expedition and that, if they fail to do so, they may be liable in costs or be made answerable in some other way.
Parke J.
I agree with the judgment read by Mr. Justice Kenny.
Keating v. Carolin.
[1968] IR 196
O’DalaighC.J. 196
15 July
This is a Case stated by Mr. Justice Butler on the hearing of an appeal from the Circuit Court. The appeal was against the refusal by the Circuit Court of the application of the applicant for an order pursuant to s. 11 of the Landlord and Tenant (Reversionary Leases) Act, 1958, declaring him to be entitled to obtain from the respondents a reversionary lease of the premises No. 33 Lower Abbey Street in the City of Dublin, and for an order fixing the terms of such lease.
Sect. 11, sub-s. 1, of the Act of 1958 says that a building lessee (subject to certain provisions which are not now relevant) shall be entitled to obtain from his immediate lessor a reversionary lease of land held by him under such building lease on application not earlier than a certain specified date nor later than another specified date. Sect. 18 of the Act of 1958 provides what the terms of the reversionary lease are to be when settled by the court. Sect. 2 of the Act provides that a “building lessee” means “the lessee under a building lease” and that “lessee,” where the context so admits, is to be construed as “including the executors, administrators and assigns of the lessee.” “Building lease”is defined in s. 4, sub-s. 1, of the Act as meaning a lease in respect of which the conditions specified in sub-s. 2 of that section are complied with and the definition includes any lease which is deemed to be a building lease by ss. 5, 6, 10, 19 or 20 of the Act.
The conditions specified in sub-s. 2 of s. 4 are as follows:
“(a) that the land demised by the lease is situate wholly in an urban area or, if not so situate, was demised by the lease for a term of not less than twenty years;
(b) that there are permanent buildings on the land and that the portion of the land not covered by such buildings is subsidiary and ancillary thereto;
(c) that the permanent buildings are not an improvement within the meaning of this Act;
(d) that the permanent buildings were erected
(i) by the person who, at the time of their erection, was entitled to the lessee’s interest under the lease, or
(ii) in pursuance of an agreement for the grant of such lease upon the erection of such permanent buildings;
(e) that the permanent buildings were not erected in contravention of a covenant, condition or agreement contained in the lease.”
“An improvement” in relation to buildings is defined by s. 2 of the Act as meaning any addition to or alteration of the buildings, and includes any structure which is subsidiary or ancillary to the said buildings, but does hot include any alteration or reconstruction of the buildings so that they lose their original identity.
Sect. 4, sub-s. 5, of the Act contains a further provision of importance in these terms: “Permanent buildings erected by a lessee in pursuance of a covenant in his lease to reinstate the buildings comprised in the lease in the event of their destruction by fire or otherwise shall be deemed to have been erected by the person who erected the original buildings.” It is this provision which gives rise to the question put in the Case Stated.
It may be further noted that s. 10 of the Act provides that:
“Where
(a) a lease expired or was surrendered before the 31st day of March, 1931, and
(b) such lease would have been a building lease or a proprietary lease if this Act had been then in force, and
(c) a renewal of such lease or a new lease was granted to the person entitled to the lessee’s interest thereunder,
Here there are three leases to be adverted to:
(i) Lease of 21st March, 1904Carolin & others to the applicant’s father for a term of 21 years from the 25th March, 1904.
(ii) Lease of 1st September, 1926Carolin & others to the applicant’s father for a term of 21 years from the 25th March, 1926.
(iii) Lease of 12th June, 1953Carolin & others to Thomas G. Keating (the applicant) for a term of 21 years from the 25th March, 1947.
The applicant’s father died during the currency of the second lease and the applicant then became entitled to the lessee’s interest thereunder. Some time prior to the year 1908 the applicant’s father acquired the adjoining premises, No. 32, which were held on a long lease. He applied to the lessors of No. 33 for a licence to cover in the yard of No. 33 and to remove the boundary wall between No. 33 and No. 32. This licence was granted by an indenture of the 30th January, 1908, the lessee undertaking to restore the premises to their original state on the termination of the lease. The yards of No. 33 and No. 32 were covered in by a common roof and were used as a workshop in connection with the lessee’s business. The premises No. 33 and No. 32 were both destroyed by fire in the Easter Rising of 1916. The ground floor of No. 33 was then being used as a shop and, as already stated, the covered-in yard was being used a as workshop, while the first floor was sub-let as an office and the two upper floors were being used as dwelling accommodation.
In the year 1918 the applicant’s father proposed to erect a single structure on the sites of No. 32 and No. 33, and for this purpose he lodged plans with the Corporation. The plans were for a single structure on the dual site, comprising a motor showroom and office on the ground floor, a single-storey workshop at the rere and rooms designed for subletting as offices on the three upper floors. The only entrance and stairway to the upper floors and the sanitary accommodation for these floors were to be in the portion of the premises on the site of the former No. 32. The lessors of No. 33 at first objected to these plans but later agreed on the lessee entering into a deed of covenant, dated 10th September, 1918, the purpose of which was to require the lessee, at the expiration or sooner determination of the leaseof 1904, to execute certain works specified in the schedule so as to restore No. 33 as nearly as possible to its former condition. These works required the installation of sanitary accommodation and stairs and the closing off and building up of all openings between the two premises. The applicant’s father received compensation from the British Government in the sum of £2,352 10s. 0d. for the destruction of No. 33, and a somewhat smaller sum for No. 32. These sums, together with a sum of £1,750 of his own money, were expended by the applicant’s father in erecting the new premises and the work was completed in 1920. A similar deed of covenant to that of 10th September, 1918, was entered into by the lessee on the occasions of the granting of the leases of 1926 and of 1953.
The Case finds that, if the works set out in the schedule to the deed of covenant of 1918 were carried out, the portion of the existing building which stands on the site of No. 33 would be physically separate from the remainder of the building and usable as such.
The question posed by the Case is whether the buildings now standing on the site of No. 33 were erected by the applicant’s predecessor in title as lessee in pursuance of the covenant in the lease of 1904 to reinstate the buildings comprised in that lease, and in the licence of 1908, in the event of their destruction by fire.
There are two covenants in the lease of 1904 which have been called in aid by the applicant. These covenants are in the following terms:
“(i) And the said Lessee doth hereby for himself his executors administrators and assigns covenant with the Lessors their heirs executors administrators and assigns that he the said Lessee his executors administrators or assigns shall and will during the continuance of this demise and without any demand whatever pay the hereinbefore reserved rent at the times and in the manner aforesaid clear over and above all taxes charges impositions and assessments whatsoever imposed or to be imposed upon or in respect of the said hereby demised premises or any part thereof whether by authority of Parliament or otherwise howsoever (Quit rent, Crown Rent and Income Tax only excepted) and shall and will at his or their own expense throughout the said term insure and keep insured the said hereby demised premises and every part thereof and all buildings for the time being standing on the demised premises against loss or damage by fire in the sum of one thousand poundsat least by a Policy to be effected in the joint names of the Lessors their heirs executors administrators or assigns and of the Lessee his executors administrators or assigns to be effected in the Office of The Caledonian Insurance Company and will when required produce to the Lessors or their agent the Policy for such Insurance and the receipt for the premiums thereon and forthwith upon every occasion expend all monies which shall or may be received by virtue of any such Policy of Insurance in repairing rebuilding and reinstating to the satisfaction of the Lessors their heirs executors administrators or assigns the said demised premises or such part thereof as may have been damaged or destroyed by fire and shall and will at his or their own expense throughout the said term keep in good and substantial repair both the inside and outside of the demised premises and all buildings additions and improvements which now are or hereafter may be upon or belonging to the said demised premises; and
(ii) also shall at the expiration or sooner determination of the said term deliver up the said demised premises and all buildings erections fixtures and additions which now are or at any time during the continuance of the demise hereby created may be upon or belonging to the demised premises in such good and complete repair as aforesaid and in all respects in such state and condition as shall be consistent with the due performance of the covenants herein contained.”
It has been stated by counsel that no insurance moneys were received by the applicant’s father. The first covenant, it seems to me may be left out of account. It is a covenant to expend insurance moneys in repairing, rebuilding and reinstatement. The relevant covenants are the covenants to keep, and to deliver up, the premises in good repair which, it is agreed, impose an obligation to reinstate, the term used in sub-s. 5 of s. 4 of the Act of 1958. The lessors’ submission is that the premises were reinstated in the year 1920 and that this was done pursuant to the covenant in the lease of 1904. The term “reinstate,” it is said, is a wide term. The lessee rebuilt and, though the new building was not identical with the old one, what was done was done pursuant to the covenant and it was open to the lessor and lessee to agree as to the manner in which the lessee might discharge his obligations under the covenant. “In pursuance of,” it is submitted, does not mean “in accordance with” but means “because of.” The lessee’s answer to this is that the buildings were not erected pursuant to the covenant in the lease of 1904 but in pursuance of an arrangement reached between the parties in 1918. Reinstatement, it is said, involves keeping the premises as a single entity, but here the lessors, it is said, agreed with the lessee that a completely different premises should be put up.
The arrangement come to in 1918, as evidenced in the deed of covenant, was sought by the lessee for his convenience, and it was conceded by the lessors on the lessee undertaking to put the premises into their original state to restore them to such stateat the end or sooner determination of the lease. All this arose out of the lessee’s obligation under the covenant in the lease of 1904 to re-build the premises. The deed of covenant of 1918 makes this plain. What was done fell short of reinstatement; but what was done was accepted as an ad interim discharge of the obligations of the covenant. The buildings now on this site of No. 33 were erected pursuant to the covenant, but not in their entirety. The modifications effected were made pursuant to the arrangement that they should be temporary and would be withdrawn at the end or sooner determination of the lease. That the work executed was, in large measure, a reinstatement of the premises in pursuance of the covenant is manifest from an examination of the work which would be required to restore the premises to their original state. I cannot accept that buildings are not erected in pursuance of a covenant to reinstate because a lessor agrees to certain modifications to convenience his lessee.
If the effect of the modifications agreed upon was that the building was not, in large part, any longer a reinstatement but a new building, then it could not be said that what was done was in pursuance of the covenant to reinstate; but in my opinion it would be contrary to the intention and purpose of the sub-section to say that a building, which in large part was a restoration of the original premises, was not erected in pursuance of the covenant to reinstate because the lessor had agreed, at the lessee’s request, to certain temporary modifications. The question posed in the Case Stated should therefore, in my view, be answered affirmatively.
WALSH J. :
I agree.
FITZGERALD J. :
The relevant facts in relation to this matter have already been stated and the relevant clauses in the leases and covenants analysed. The net issue appears to be whether the
building erected in 1918 by the applicant’s father was erected by him pursuant to the covenant to repair in the lease of 1904 or, alternatively, erected independently of that covenant.
The purpose of the Landlord and Tenant Act, 1931, so far as it related to the establishment of a right to a reversionary lease, appears to have been induced by the fact that in urban areas a large number of leases for terms of 150 years had been granted at the end of the eighteenth century at moderate ground rents and containing covenants compelling the lessees to erect substantial buildings on the sites demised These leases, which were due to expire in the course of the next few decades following 1930, would have resulted in very valuable properties passing to the lessors without the tenants, whose predecessors had built the houses, receiving any compensation and being without any right to a renewal of the tenancy.
Part V of the Landlord and Tenant Act, 1931, made provision that where land in an urban area was demised and was substantially covered by buildings erected by the lessee at the time of the erection, such buildings not being erected in contravention of covenant or other term of the lease, and not being merely an improvement as defined by the Act, the lessee at the time the lease expired should, subject to certain requirements as to notice and certain other limitations, be entitled to a renewal of his lease at one quarter of the rent which might be expected in respect of the property in the open market. Provision was further made for the substitution of a sub-lessee for the lessee where the sub-lessee had paid or expended a sum equivalent to or exceeding fifteen times the rent reserved by the sub-lease in consideration for or pursuant to the terms of the sub-lease.
The purpose of these provisions was to ensure that a lessee who had enhanced the value of the land by the erection of permanent and substantial buildings, or a sub-lessee who erected such buildings or paid substantial money for his sub-lease, must not be deprived of a substantial asset by the expiration of the lease. In the result land which was covered by buildings which had been erected by the lessor reverted to him on the expiration of the lease; on the other hand land covered by buildings erected by the lessee (or sub-lessee) or purchased from him by a sub-lessee, did not so revert but was subject to a right to a reversionary lease. The distinguishing feature appears to have been whether the buildings could be described as “landlords’ buildings” or”tenants’ buildings.”
Part V of the Act of 1931 was repealed and replaced by the Landlord and Tenant (Reversionary Leases) Act, 1958. The Act of 1958 made certain modifications of the provisions of Part V of the Act of 1931, but the only one which has arisen for discussion in the present case is s. 4, sub-s. 5, of the Act of 1958 which is as follows: “Permanent buildings erected by a lessee in pursuance of a covenant in his lease to reinstate the buildings comprised in the lease in the event of their destruction by fire or otherwise shall be deemed to have been erected by the person who erected the original buildings.” The purpose of this sub-section is clearly to rectify a situation in which a lessee, who held land with buildings erected by the landlord already on it at the time of the lease (and who consequently, if the original buildings had survived, would have no right to a reversionary lease) could then acquire a right to a reversionary lease if, pursuant to an obligation imposed on him by the lease, he had erected buildings to replace the original buildings which had been so destroyed. The legislature apparently considered that the new building as erected should be regarded as the “landlord’s buildings” and not as the tenant’s.
In the present case the buildings now on the land demised were erected by the lessee and, apart from s. 4, sub-s. 5 of the Act of 1958, he would appear to have the necessary qualifications to entitle him to a reversionary lease. The covenants in the lease of the 21st March, 1904, imposed obligations on the lessee (a) to insure the premises against loss or damage by fire, (b) to expend all moneys received through such insurance in repairing, rebuilding and reinstating the premises and (c) to keep the premises in good and substantial repair and so deliver them up at the expiration of the lease. The third of these covenants made the lessee liable to rebuild the premises following their destruction by fire in 1916.
It was submitted on behalf of the lessee that, in as much as the buildings now on the site do not correspond to those existing prior to the fire and have with the adjoining premises, No. 32 Lower Abbey Street, been incorporated in one building, the premises now on the two sites were erected pursuant to an agreement between the lessors and the lessee recited in the deed of covenant dated the 10th September, 1918, and that the rebuilding of No. 33 was not done by the lessee pursuant to the covenant for repair in the original lease but pursuant to the agreement arrived at in 1918. The deed of covenant shows that the lessors had initially refused to agree to the rebuilding of the premises as a joint structure including No. 32 and No. 33, but that they had ultimately agreed on condition that, on the expiration of the lease (which would have occurred on the 25th March, 1925), certain specified works were to be carried out by the tenant so as to restorethe premises, as nearly as possible, to their former condition.
These works in fact would have separated No. 33 from No. 32 and re-established No. 33 as a single complete premises. The lessee was also required to provide a sum of £380 to be held in trust to ensure his due compliance with the provisions for the re-establishment of No. 33.
In my opinion the buildings erected by the lessee in 1918 were so erected pursuant to the covenant in the original lease and not independently of it. The landlord’s agreement that the premises might be erected in conjunction with the rebuilding of No. 32 was expressly subject to the proviso that on the expiration of the lease he was to be given possession of the building consisting of a single unit restored, as nearly as possible, to its pre-fire condition. To my mind the agreement of 1918 amounted to no more than a relaxation, for the balance of the term, of the tenant’s obligation to maintain the premises in their original condition. The original buildings were clearly “landlords’ buildings” and, subject to the relaxation of the covenant for the benefit of the lessee during the balance of the term, they were to be delivered up as if the relaxation had never taken place. Consequently, in my view, they remain landlords’ buildings, having been built by the lessee pursuant to the covenant in the original lease.
Hardman v. White.
[1945] IR 279
SULLIVAN C.J. :
This case, which has been fully argued on both sides, comes before us on a Case Stated by Circuit Court Judge Connolly.
The questions in issue arose on the hearing of a civil bill in which the plaintiff claims to recover a sum alleged to be due for arrears of rent. The facts leading up to the institution of this action are set out very fully in the Case Stated, but the material facts can be stated very shortly. A certain James O’Neill held under lease, dated 20th December, 1935, a parcel of land for the term of 999 years, subject to the yearly rent of £45, and subject to a covenant to erect buildings thereon. This lease comes within the definition of a “building lease” in the Landlord and Tenant Act, 1931. O’Neill built houses on the land and made sub-leases of these houses for the residue of the term for which he held less the last three days, in consideration of a fine and a small yearly rent.
The plaintiff is the owner of the freehold reversion on O’Neill’s lease. Apparently the rent reserved by this lease was paid by O’Neill up to some time in the year 1939, and it then fell into arrear. In the following year O’Neill was adjudicated bankrupt and the Official Assignee elected not to take the lease. The defendant is one of the sub-lessees, and the sub-lease under which he held comes within the definition of a “proprietary lease” in the Landlord and Tenant Act, 1931.
After O’Neill had been adjudicated a bankrupt, no rent was paid to him by the defendant, or by any of the other sub-lessees. The sub-lessees paid rent for a period to the Official Assignee, but when he elected not to take O’Neill’s lease, the rent which they had paid was returned to them. In the year 1943, there being then over one year’s rent due to him by O’Neill, the plaintiff instituted proceedings in ejectment and recovered judgment for possession. Sect. 51 of the Act of 1931 provides that where a building lease is terminated by ejectment for non-payment of rent “the following provisions shall have effect”:
(a) “No sub-lease of the land or any part of the land comprised in such building lease which is an immediate sub-lease under such building lease and is a proprietary lease shall be terminated by such ejectment or re-entry.”
Accordingly the order for possession made in that suit expressly declared that the rights of the sub-tenants, being proprietary leases, should not be affected. The defendant in the present action was left in possession of his house, as were the other proprietary lessees.
In these circumstances, the plaintiff, not having been paid the arrears of rent due to him by O’Neill, instituted these proceedings by a civil bill in the Dublin Circuit Court, claiming to recover from the defendant four and a half years arrears of rent due up to the 1st January, 1944, amounting to £36, being the rent which up to that date would normally have been paid by the defendant to O’Neill. The defence pleaded is an admission of liability for one half year’s rent due on the 1st January, 1944, but a denial of liability to the plaintiff in respect of any rent which was due by the defendant to O’Neill prior to the 18th November, 1943, when the order of possession in the action against O’Neill was executed.
The questions of law submitted for the determination of this Court are[His Lordship quoted the questions from the Case Stated].
The answer to these questions depends upon the interpretation that is given to clause (b) of s. 51 of the Act. I have referred to clause (a) of that section, which provides that no sub-lease of the land or any part of the land comprised in a building lease which is an immediate sub-lease under such building lease and is a proprietary lease shall be terminated by the termination of the building lease by ejectment for non-payment of rent.
Clause (b) provides as follows:
“The person who would but for this section become entitled by virtue of such ejectment . . . to the possession of the land comprised in such sub-lease shall become and be entitled to the reversion on such sub-lease and to the benefit of the rent reserved by and the covenants and conditions contained in such sub-lease.”
By virtue of that provision, the plaintiff, on the termination by ejectment of the lease to O’Neill, became entitled to the reversion on the sub-lease to the defendant and to the benefit of the rent reserved by and the covenants and conditions contained in that sub-lease.
Notwithstanding the argument of counsel for the plaintiff I entertain no doubt as to the meaning of that provision. As from the date when O’Neill’s interest was determined the plaintiff stood in his place and became entitled to recover from the defendant the rent that would thenceforward, if O’Neill’s lease had not terminated, accrue due and become payable to O’Neill. O’Neill’s right to recover from the defendant any arrears of rent due at that date remains unaffected. If the Legislature intended that “the person who would but for this section [s. 51] become entitled by virtue of such ejectment . . . to the possession of the land comprised in such sub-lease”in this case the plaintiff should become entitled to the arrears of rent due by the sub-lesseethe defendantto the sub-lessorO’Neillit would have expressed that intention in terms that were clear and unambiguous, such as those of s. 12 of the Land Law (Ireland) Act, 1896.
In my opinion the answer to the first question in the Case Stated should be “No.” The second question does not arise.
MURNAGHAN J. :
I agree.
Under the ordinary principles of law, a decree in ejectment put the landlord into possession of the property in question, but the Landlord and Tenant Act, 1931, contains provisions saving the position of sub-lessees holding under proprietary leases as defined in the Act when the superior building lease is terminated.
The proprietary lease here was for a term expressed in years and days, and beyond that period was the immediate landlord’s reversion; by clause (b) of s. 51 the Legislature gives to the superior landlord that reversion, i.e., the reversionary term of three days retained by O’Neill, the building lessee.
The Act seems to me to constitute a statutory reconstruction of the sub-lease, but it contains no provision dealing with rent due by the sub-lessee at the date of termination of the intermediate interest, and the superior landlord is, in my opinion, not entitled to recover such rent.
GEOGHEGAN J :
I agree and have nothing to add.
O’BYRNE J. :
I agree.
BLACK J. :
I agree.
I just wish to add, with reference to the suggestion that the words “to the benefit of the rent reserved by and the covenants and conditions contained in such sub-lease” are surplusage, that Mr. Hooper suggested some very plausible interpretations showing that these words could have a purpose apart from the meaning the appellant sought to attach to them.
McGrath and Donnelly v Campbell and Others
Circuit Court.
22 April 1936
[1936] 70 I.L.T.R 117
Judge Shannon
Judge Shannon.
I have before me four applications for reversionary leases in the premises now known as 5, 6, 7 and 8 O’Connell Street, in the City of Dublin. I propose at the moment to deal only with what I might call the preliminary point that arises as regards the buildings, No. 8 and No. 7. This will facilitate the further hearing in regard to these two buildings, and as regards the other buildings, Nos. 5 and 6, I think the point I am about to discuss does not arise. The applications are under Part V of the Landlord and Tenant Act, 1931, and as regards the building, No. 8 O’Connell Street, the application is for a reversionary lease to commence from the expiration of a lease *118 dated 16th of April, 1790, and made between Alexander Campbell of the one part and John Gordon of the other part. Now this lease was of an existing building therein described as a dwellinghouse, No. 60 Sackville Street, and was for three lives and for such other life or lives as should be added to a demise of the same premises contained in a lease of the 21st May, 1789. The lease of 1790 was to run for such lives as should be added during the term of ninety years from the 25th December, 1787. The applicant, Mr. McGrath, as regards the premises, No. 8 O’Connell Street, is entitled to the lessee’s interest under this lease, which was last renewed in 1896, and it expired on the death of his late Majesty King George V. This lease contains covenants by the lessee to keep the premises in repair and to so yield them up on the determination of the demise. The lessor in the lease of 1790 himself held the premises thereby demised together with other premises under a lease dated 21st May, 1789, the interest under which is vested as regards the premises, No. 8 O’Connell Street, in the respondent, Campbell. The lease of 1789 commenced from the 25th December, 1787, and was for the three lives therein mentioned and for such other lives as should be added during the term of ninety-nine years from the 25th December, 1787. It also contains covenants to preserve and maintain the premises in good repair and to deliver up the premises in such repair at the termination of the demise which expired on the death of the late King George V. I find that all these premises that are mentioned in the lease of 1789 were built by the therein named lessee in accordance with and on the faith of a promise by the lessor to grant that lease, and accordingly if there is any other question arising as regards Nos. 7 and 8 O’Connell Street the building lease in this case would be the lease of 1789. All the premises, formerly 5, 6, 7 and 8 Sackville Street, which are now known as 5, 6, 7 and 8 O’Connell Street, or the buildings that stand on the sites of 5, 6, 7 and 8 O’Connell Street, were completely destroyed in 1916 and were rebuilt, as regards No. 8, by the owner of the lessee’s interest under the lease of 1790, and as regards the premises, No. 7, by the owner of the sub-lease of 1910, that is the applicants, Messrs. Donnelly. Now the preliminary point that I have to decide is whether the existing buildings, Nos. 7 and 8 O’Connell Street, were erected by the person entitled to the lessee’s interest under the lease of 1789, or as regards the premises, No. 8, whether the person who built them was the person who was entitled to the lessee’s interest under the lease of 1790, and, as regards No. 7, the same question arises, did the person who built them do so under a building lease of 1910. Now Mr. Costello urges in the first place that, as regards No. 8 O’Connell Street, his lease of 1790 is equivalent to an assignment of the lease of 1789. He says that having been made (as he claims) for the whole of the term granted by the lease of 21st May, 1789, it is equivalent to an assignment and that accordingly on that view it is immaterial whether the premises, No. 8, were built by the lessee under the lease of 1789 or under the lease of 1790. I don’t think that Mr. Costello’s contention on this point is correct, because I agree with what was urged by Mr. Chadwick and Mr. Poole, that the whole of the term granted by the lease of 1789 was not demised to the lessee named in the lease of 1790. The lease of 1789 was renewable for 99 years from 1787 and the lease of 1790 was renewable for only 90 years from the same date, namely, 25th December, 1787, and consequently I cannot hold that Mr. Costello’s first submission is correct. It appears to me that the lease of 1790 is in fact a sub-lease and not an assignment. Now in 1916, buildings that stood on the plot where now stand the premises 7 and 8 were completely destroyed. They were, I think, destroyed by fire or other means and were razed to the ground, and what was done has been describel by the Architects, Mr. Munden and Mr. Robinson, namely, the site in each case was cleared, the foundations were excavated, new foundations were laid at a greater depth than the old foundations, and buildings that correspond with the site of the old buildings but in other ways differ in practically every respect were erected The new buildings are different in design. They are different as regards the material that has been placed in them; they are different as regards the space enclosed by the outer and inner walls, and they are different as regards the general amenities, sanitary convenience and so forth. It is urged by the respondents for whom Mr. Chadwick and Mr. Poole appear that what was done by the McGrath and Donnelly interest was done in pursuance of the covenants contained in their leases of 1790 and 1910 and that consequently they, by carrying out their contract to maintain and repair the existing buildings, cannot be considered as persons contemplated by the legislature as entitled to the benefit of what they did. In reply, Mr. Fitzgibbon and Mr. Costello urged that the old buildings, 7 and 8, having been completely destroyed were impossible to repair *119 and that consequently all liability under the covenants to maintain and repair had ceased. I don’t agree with that submission. I think that even if the old buildings had been destroyed that the covenants are sufficiently wide and comprehensive to throw upon the lessee the responsibility of reinstating the building, the covenant having been to maintain the building, to preserve it and to keep it in repair, it seems to me immaterial what the circumstances are under which the building disappears, the liability still remains on the lessee to discharge that covenant. I think that the respondents for whom Mr. Chadwick appears are right in their submission that the liability was on the lessee in each case to restore the building if the liability under the lease of 1789 lay upon these respondents; they themselves would have been liable to the head landlord to restore the buildings, but 1 don’t think that that is sufficient to carry the argument on behalf of the respondents as against the applicants for reversionary leases of Nos. 7 and 8. In each case, so far as the evidence goes, it is established that the owners of the interest in one case under the lease of 1790 and the other under the sub-lease of 1910 were the people who actively interested themselves in getting a new building erected. They were the people who went before the Property Losses Commission. In the McGrath case it was the predecessor in title of McGrath who made himself personally responsible for a loan to the Corporation. It was he and his successors who have since repaid that loan and nothing was done to assist or contribute in that respect by the owners of any reversion. In the Donnelly case the predecessors or the present applicants, I am not sure which, each got a Government grant, but, in addition, each spent their own money. I don’t think that these facts are really very material. I think this case really depends upon the construction to be placed on the meaning of the permanent buildings described in Section 46. I do agree that I think the intention of the legislature must have been to compensate and reward a person who originally converted a derelict or bare site and built tenements upon it. 1 think these were the people who were to get the benefit of the risk of the outlay and the energy that they had expended, but when, as in this case, something happens to the building and another person comes in and spends money, either borrowed money or money obtained by a Government grant, or his own money, and erects permanent buildings, whether it has been in pursuance of a covenant or not, then I have come to the conclusion that the only view that can be taken of the words in the section is that such person is the person who erected the permanent buildings. In the present two cases, as regards 7 and 8, I look, figuratively speaking, at the site and 1 see permanent buildings thereon. I ask myself the very simple question who erected them. In the one case they were erected by McGrath and in the other by Donnelly I don’t think it can make any difference if they were erected in pursuance of a covenant to repair, if they were erected on the monies that were granted to them by the Government, or partly by such monies or partly with borrowed monies or partly with monies of the builder The plain reading of this section appears to me to be the meaning contended for by Mr. Costello and Mr. Fitzgibbon. I cannot agree with the submission that the buildings that are now there are the same buildings as were there prior to 1916. They are not; they are substantially different. They are buildings that are different in ways that I need not enumerate as described by the Architects, and consequently I decide that in the case of No. 8 Mr. McGrath is the person who erected the permanent buildings now on the site, and in the case of No. 7, Mr. Fitzgibbon’s client The further point remains to be referred to, made by Mr. Leonard on behalf of the fee-simple owners. He has urged that in the present case if I rule against Colonel Campbell and Canon Hayes that neither Donnelly nor McGrath can have reversionary leases, because the only persons to grant reversionary leases are the lessors to the applicants Donnelly and McGrath. Mr. Leonard draws attention to Section 47 and he says that as there is no reversion in Colonel Campbell’s interest on the expiration of the sub-lease that consequently there is nobody to grant the reversionary lease and that Section 54 only brings in somebody to assist in the granting of a reversionary term where you first have a reversion of the building lease to grant, and that if there is no reversion that the building lease and the lessor’s interest in the building lease die at the same time, that there is nobody who can grant anything, and that consequently his clients, the owners of the fee, could, if they thought fit, he does not suggest they would, go into possession of these premises, Nos. 7 and 8. Well, I think that that is not a good point. I agree that Section 47 means what it says, that at any time within seven years before the expiration of the building lease the person in possession of the lease and fulfilling the conditions may go to the person who is the lessor and ask *120 for a reversionary lease. He need not wait until the expiration of the period and he can join with the owner in fee if necessary or the owner of such interest as is able to grant such term as should be granted for a reversionary lease. In these circumstances I decide the preliminary points as regards Nos. 7 and 8 in favour of the applicants, McGrath and Donnelly, and I suppose there remains now as regards this case only the hearing of evidence to fix the amounts.
Fenlon v. Keogh
High Court, February 10, 1997,
O’FLAHERTY J:
1. The background facts to this matter are that by indenture of lease dated 31 December, 1973, between Anna Keogh, now unfortunately deceased, as landlord and Michael Fenlon as tenant the landlord let to the tenant premises consisting of what is described in the lease as a large hay-barn with a tarmacadam forecourt and market garden adjoining the said hay-barn, forming a portion of the premises known as Waterpark House, Poddle Park, Kimmage in the City of Dublin.
There was the usual obligation on the part of the tenant that if the premises, or any additional buildings or any part thereof, should at any time during the term of the lease be destroyed or damaged by fire the monies received from the fire insurance cover should be expended in repairing and reinstating the demised premises to the satisfaction of the landlord, or the landlord’s agents.
It appears that there was a very cordial relationship between Mr Fenlon and Mrs Keogh over the years. He took over this hay-barn and made many improvements to it, I am satisfied. There were few electric lights in it and it had a gravel floor, perhaps some concreting, and there was no plumbing. He put in a concrete base, he rewired the whole place, he installed plumbing and he improved the tarmacadaming of the forecourt.
Then, in 1990, there was a fire and the premises were totally destroyed. Mr Fenlon’s business was that of a car repairer and he had certain dealings in relation to the buying and selling of cars and so forth in the actual place where the building had been. Obviously, it was hard for him to carry on his business after the building was destroyed. However, he set about to reconstruct the place. His original intention was to restore the building more or less as it was. He ran into difficulty with the planning authority in getting approval for it. Then he gradually came around to the idea of erecting a more grandiose building (a photograph of which I have seen) and which is what one would call a custom built garage. Attached to that is a building that looks more like a dwellinghouse than a workshop, but it has office accommodation on the top floor. It blends very well into the environment and Mr Fenlon did this by direct labour and I am satisfied that he has done a very good job.
As regards what it cost, he has estimated that he spent in or about £80,000. I think that is correct, and there may be something more to be spent in regard to fencing and tarmacadaming and so forth. He is probably going to be looking at a total outlay of in or around £90,000. I am satisfied that he is a perfectly truthful witness; he has been very frank and open in his evidence. He has not concealed anything and I have been very impressed with him.
I have been impressed, too, with the relationship that he had with Mrs Keogh. He did consult her at all stages and kept her informed as to what he was about to do. She would have been advised by her solicitor largely. I am sure that the solicitor explained to her, and wanted to make clear to the other side as well, that she would be anxious to have the terms of the lease observed: which was to have the building that had been burned down reinstated. As I say, it has been reinstated on a much more grandiose scale than the old hay-barn and on a different site, but of course on the take demise. I have no doubt that all has been done with the approval of the landlord.
The question that has been presented in a very net form for me, with the able and diligent assistance of counsel on each side, is a consideration of whether we have a situation where Mr Fenlon is entitled to a reversionary lease.
It is agreed that he comes within s 30(2) of the Landlord and Tenant (Amendment), 1980. We have to find out then, by reference to s 9 of the Landlord and Tenant (Ground Rents)(No 2) Act, 1978, whether those conditions have been complied with. They are:-
(a) that there are permanent buildings on the land and that the portion of the land not covered by those buildings is subsidiary and ancillary to them;
— I am satisfied that is so;
(b) that the permanent buildings are not an improvement within the meaning of subsection (2);
— I am satisfied of that as well;
(c) that the permanent buildings were not erected in contravention of a covenant in the lease;
— I am satisfied about that, and
(d) one of the alternative conditions set out in s 10 must be satisfied
— and I think it is agreed by counsel that Mr Fenlon comes within condition number 1:-
1. that the permanent buildings were erected by the person who at the time of their erection was entitled to the lessee’s interest under the lease or were erected in pursuance of an agreement for the grant of the lease upon the erection of the permanent buildings;
But here is the rub: it is contained in s 9(4) of the Landlord and Tenant (Ground Rents)(No 2) Act, 1978, which provides as follows:-
Permanent buildings erected by a lessee in pursuance of a covenant in his lease to reinstate the buildings comprised in the lease in the event of their destruction by fire or otherwise shall be deemed to have been erected by the person who erected the original buildings.
Now there is no doubt that Mr Fenlon had an obligation to reinstate the building that had been comprised in the original lease. That is what he set out to do and he was frustrated to a degree by the planning system. So with the agreement of everyone he puts there a much better building. Mrs Keogh, and her solicitor I am sure, were delighted that there should be a better building. The hay-barn was not going to be any loss from that point of view.
On the other hand what is Mr Fenlon’s situation? I have come to the conclusion that he had an obligation under the lease to reinstate the building and that in a sense there was no way out for him and what he did was a form of reinstatement. I think some support has to be got from that concept in the one case that was cited to me: Keating v Carolin [1968] IR 193. Chief Justice O Dalaigh recounts in that case at p 200:-“The term ‘reinstate,’ it is said, is a wide term. The lessee rebuilt and, though the new building was not identical with the old one, what was done was done pursuant to the covenant and it was open to the lessor and lessee to agree as to the manner in which the lessee might discharge his obligations under the covenant. ‘In pursuance of,’ it is submitted, does not mean ‘in accordance with’ but means ‘because of.’ The lessee’s answer to this is that the buildings were not erected pursuant to the covenant in the lease of 1904 but in pursuance of an arrangement reached between the parties in 1918. Reinstatement, it is said, involves keeping the premises as a single entity, but here the lessors, it is said, agreed with the lessee that a completely different premises should be put up.”
The learned Chief Justice then goes into the particular facts of the case, which need not detain us now.
This case is somewhat the same. There is no doubt that the new premises are completely different to the old. Yet, the building has been erected in pursuance of the tenant’s obligation to provide at least as good a building under the tends of the lease. I am satisfied that that is what the parties achieved and that the correct legal result is to hold that in all the circumstances s 9(4) of the 1978 Act does apply. The building is deemed to be the property of the lessor. This means that Mr Fenlon will not be entitled to a reversionary lease but he will be entitled to an ordinary renewal of his lease which is a 35 year lease.
I want to put it on record that I hold that he did spend, or is about to spend, not less than £80,000 and probably nearer to £90,000 on the building, iewith the additional works that he proposes. However, I do not accept that he could have put up much of a building for the estimate he got at £18,000 to replace the hay-barn. As a person who lives in the real world, to some degree, I know that it would simply not be possible to get anything done nowadays for £18,000 in the way of any form of substantial building. If a replacement of the hay-barn had been a viable proposition I think more realistically it would have cost £30,000 to £40,000. I hold that certainly he has improved this site to a figure in the region of £40,000 to £50,000. What help that will be to anyone in estimating the rent, I do not know.
Digital Hub Development Agency v Keane
[2008] I.E.H.C. 22
JUDGMENT of O’Neill J. delivered on the 31st day of January, 2008
This is an appeal from the order of the Circuit Court (Her Honour, Judge Linnane) made on the 23rd April, 2004 whereby the Circuit Court affirmed the order of the County Registrar made on 26th day of September, 2003. By her order as aforesaid the County Registrar, determined, awarded and directed that the respondents in this appeal (the applicants before her) had a right as incident to its existing interest, to enlarge that interest into the fee simple and for that purpose to acquire by purchase the fee simple and all intermediate interests therein for the sum of €40,600, in the premises known as:
“ALL THAT AND THOSE the heraditaments and premises known as Nos. 10, 11 and 12 Rainsford Street in the Parish of St. Catherine and City of Dublin and more particularly described in an indenture of lease dated the 8th of October, 1958 and made between Arthur Guinness & Son and Company (Dublin) Ltd of the one part and A Millar & Co Ltd of the other part.”
By her said order she further directed that the sum of €40,600 be apportioned as to €40,000 to be paid to the respondents Martin Keane and Gerry O’Reilly (the appellants herein) in respect of their freehold interest in the premises and the balance of €600 to be lodged in court to the credit of the matter in respect of all intermediate interests which are unknown and ascertained. She further directed that the appellants join in a deed of conveyance to the respondents in respect of their interest in the premises.
The background to this matter is as follows. By a lease made on the 20th day of July, 1860 between Edward Corles as lessor and Adam Millar as lessee, the said lessor, described as being from the City of Harcester in England demised to the lessee, described as a merchant of Thomas Street in the City of Dublin, certain premises at Rainsford Street in the City of Dublin for a term of ninety nine years from the 1st of May, 1860 at the yearly rent of £55. Six premises were thus let namely Nos. 22, 23, 24 Rainsford Street in the City of Dublin and also the premises the subject matter of these proceedings, Nos. 10, 11 and 12 Rainsford Street in the City of Dublin. The rent of £55 was in respect of all of these premises.
The lease in question has not survived and evidence of it is to be found in a Memorial of the indenture of lease and pursuant to s. 2 of the Vendor and Purchaser Act, 1874 the recital of facts as set out in this Memorial, insofar as there is no evidence to the contrary, is to be taken as sufficient evidence of the truth of the facts stated in the Memorial.
The description of the Nos. 10, 11 and 12 Rainsford Street in the Memorial is as follows:
“…all that and those two dwelling houses or tenements together with the ground in the rear thereof known as Nos. 10 and 11 Rainsford Street formally in the possession of the said James Vose together with the liberty of the gateway on the Westside of said houses bounded on the East by the late widowed Downes holding on the West by the late Michael Bardins holding on the North by Goldmans Brook on the South by Rainsford Street containing in breadth in front exclusive of said gateway 37 feet 9 inches and in rear 44 feet and in depth from front to rear 141 feet be the same several admeasurements more or less which said several houses were lately in the tenure or occupation of George Eastwood and also all that and those the dwelling house, tenement and premises known as No.12 Rainsford Street with the liberty of the gateway on the East side of said house, bounded on the East side by the late Thomas Mitchells Holding, on the West by Church ground, on the North by Goldmans Brook and on the South by Rainsford Street containing in breadth in the front to Rainsford Street 25 feet exclusive of the gateway and in the rear 25 feet 6 inches and in depth from front to rear 138 feet be the said admeasurements or any of the more or less which said last mentioned house and premises were formally in possession of Michael Bardin and lately in the occupation of Patrick Adams Dairyman all of which said premises are situated lying and being in the liberties of Thomas Court and Donore in the Parish of St. Catherine in the City of Dublin together with the appurtenances and all rights of way, rights of passing and easements whatsoever belonging thereto or enjoyed therewith…”
By a Deed of Conveyance and Assignment dated the 28th June, 1895 between William Millar and Fitzadam Millar of the one part and A Millar & Company Ltd of the other part, the lessee’s interest in the premises the subject matter of the lease dated the 20th July, 1860 was assigned to A Millar & Company Ltd. The lessor’s interest under the said lease was by a deed of the 29th April, 1936 conveyed to Arthur Guinness Son & Company Ltd.
The term of ninety nine years granted in the aforesaid lease of the 20th July, 1860 expired on the 30th day of April, 1959. By a lease dated the 8th October, 1958 Arthur Guinness Son & Company (Dublin) Ltd. as lessors demised to A Millar & Company Ltd as lessee the premises knows as ALL THAT AND THOSE the heraditaments of premises know as Nos. 10, 11 and 12 Rainsford Street for term of ninety nine years computed from the 1st day of May, 1959 at the yearly rent of £150.
By a Deed of Conveyance and Assignment dated the 22nd of February, 1988 Adam Millar & Company Ltd (in receivership) assigned to Lee & Company (Dublin) Ltd the lessee’s interest under the said lease of the 8th day of October, 1958 in Nos. 10, 11 and 12 Rainsford Street in the City of Dublin.
By a Deed of Confirmation and Waiver dated the 28th August, 2000 made between Arthur Guinness Son & Company (Dublin) Ltd (“AGSD”), Guinness Ireland Group (“GIG”), DIAGEO plc (“DIAGEO”) and Lee & Company (Dublin) Ltd, DIAGEO, AGSD and GIG confirmed granted and demised to Lee & Co. (Dublin) Ltd the premises the subject matter of the lease of the 8th October, 1958 for the balance of the term created by the lease and also waived compliance with clause 2(c) of the lease insofar as it related to the demolition already carried out of certain buildings on the demised premises.
By a Deed of Assignment dated the 17th August, 2001, Lee & Company (Dublin) Ltd assigned to the Commissioners of Public Works in Ireland the lessee’s interest under the lease of the 8th October, 1958 in Nos. 10, 11 and 12 Rainsford Street in the City of Dublin.
By a Deed of Conveyance dated the 21st June, 2001, Guinness Ireland Group Ltd conveyed to Martin Keane the first named respondent, the lessor’s interest held under an indenture of Fee Farm Grant dated the 27th of February, 1866, in Nos. 10, 11 and 12 Rainsford Street, for the sum of IR£25,000. Thereafter the first named appellant conveyed that interest to himself and the second named appellant jointly.
By a notice dated the 14th day February, 2003 being a notice of intention to acquire the fee simple, pursuant to s. 4 of the Landlord and Tenant (Grounds) Rent Act of 1967, the Commissioners of Public Works in Ireland served a statutory notice on the first and second named appellants of its intention to acquire the freehold interest in the lands held on foot of the lease of the 8th October, 1958, in the premises at Nos. 10, 11 and 12 Rainsford Street in the City of Dublin.
On the 21st July, 2003 by virtue of the Digital Hub Development Agency Act, 2003 (Establishment Day) Order (SI No.23 of 2003), the Digital Hub Development Agency was established pursuant to s. 7 of the Digital Hub Development Agency Act, 2003 [the Act of 2003]. By virtue of s. 41 of the Act of 2003 all rights and property held or enjoyed before the establishment day by the Commissioners of Public Works in Ireland in respect of the “Digital Hub” as defined in the Act were transferred to the Digital Hub Development Agency. As Nos. 10, 11 and 12 Rainsford Street are situated within the “Digital Hub” as defined in the Act, these premises were included in this transfer.
The first and second named appellants by its notice of opposition opposed the claim of the respondents to the fee simple of these properties; their grounds of opposition being as follows:
“(1) Objection: these respondents claim that the applicant does not hold under a lease as the lease relied upon has been forfeited for breach of covenant by re-entry by the issue and service of proceedings for ejectment.
(2) These respondents await proof that the applicant has succeeded to the tenants’ interest in the lease dated the 8th October, 1958.
(3) The applicant has no legal entitlement to acquire the lesser’s interest by virtue of s. 4 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978.
(4) The applicants are not entitled to acquire the fee simple as they do not comply with the conditions of ss. 9 and 10 of the Act of 1978…”
As indicated earlier when the matter came on for hearing before the County Registrar, she upheld the claim of the appellants to the fee simple and directed and awarded accordingly and determined the purchase price to be €40,600.
On this appeal three issues were litigated as follows.
1. That the appellants were by virtue of s. 4 of the Landlord and Tenant (Ground Rents) (No.2) Act, 1978 precluded from availing of the provisions of that Act and hence the Notice of Intention to Acquire the Fee Simple dated the 14th February, 2003 was invalid.
2. That the appellants did not comply with the conditions of ss. 9 and 10 of the Landlord and Tenant (Ground Rents) (no 2) Act, 1978 [the Act of 1978] and hence were not entitled to acquire the fee simple.
3. That in the event that the court should hold that the appellants were entitled to acquire the fee simple that the County Registrar had erred in the computation of the purchase price in failing to have regard, pursuant to s. 7(3)(d) of the Landlord and Tenant (Amendment) Act, 1984, [the Act of 1984] to the development value or potential of the premises.
I propose to deal with each of these issues in the order in which they are set out above.
FIRST ISSUE
Section 4 of the Act of 1978 is in the following terms:
“4. – This Act shall not bind a Minister of the Government, the Commissioners of Public Works in Ireland or the Irish Land Commission.”
Mr. Ó Dúlacháin, SC for the appellants submitted that a correct construction of this provision led to the conclusion that the provisions of the Act of 1978 in general did not apply to the organs of State mentioned in the section. It was submitted that the phrase “shall not bind” given its natural and ordinary meaning, meant that these organs of State were outside the ambit of the provisions of the 1978 Act and thus in the capacity of lessor could not be compelled to convey the fee simple or such interest as it had, and in the capacity of lessee could not avail of the provisions of the Act to compel a lessor or the holder of a superior interest to convey the fee simple to them.. It was further submitted that the different formulation i.e. “this Act shall not bind a State Authority in its capacity as lessor” used in s. 4 (2) of the Landlord and Tenant (Amendment) Act, 1980 indicates an intention on the part of the lessor in s. 4 of the 1978 Act, to remove from the scope of this Act the entirety of the Landlord and Tenant relationship where any of the State organs mentioned, is a party to such a relationship. It was further submitted that, had it been intended by the Oireachtas, merely to exclude any liability to the provisions of the Act on the part of State organs as lessors, that this would have been provided for in s. 16 (2) of the Act of 1978 where that type of provision is made in respect of the Commissioners of Irish Lights and Harbour Authorities within the meaning of the Harbour Acts, 1946.
For the respondents in this appeal it was submitted by Ms Whelan SC that the phrase “shall not bind” in its natural and ordinary meaning, means shall not impose a liability on, and does not exclude the State Organs mentioned from availing of the benefits provided for in the 1978 Act, namely the right to acquire a fee simple provided that the conditions stipulated in the Act are fulfilled.
Attention was drawn to the fact that s. 2 of the Landlord and Tenant (Ground Rents) Act, 2005 [the Act of 2005] adheres to the same formulation used in s. 4 of the Act of 1978. Section 2 of the 2005 Act reads as follows:
“2. – The following section is substituted for section 4 of the Act of 1978:
4. – (1) This Act shall not bind –
(a) a Minister of the Government,
(b) the Commissioner of Public Works in Ireland,
(c) Industrial Development Agency (Ireland),
(d) Shannon Free Airport Development Company, or
(e) Udarás na Gaeltachta.
(2) Subsection (1) is in addition to any other enactment imposing a restriction on the application of this Act.”
It was submitted that the intention of the Oireachtas in these types of provision was clear and was the same in all cases, namely to exclude from the provisions of the Landlord and Tenant Acts both claims to the fee simple under the 1978 Act and claims to new tenancies under the 1980 Act, where the lessor was an organ of the State, and the additional language used in s. 4(2) of the 1980 Act did not add to or alter this underlying provision.
In my opinion, it is well settled (see Howard v. The Commissioner of Public Works [1994] 1 I.R. 101), that there is no principle derived either from the Constitution or the common law in Ireland to the effect that a general statute does not apply to the State or State agencies. Neither is there any presumption of exemption of the State from statutory provisions, nor is there any presumption derived from the Constitution of a special position for the executive in regard to legislation.
Thus the question of whether s. 4 of the Act of 1978 precludes the respondents in this appeal from availing of the statutory right to acquire the fee simple, is one of statutory construction in the ordinary way.
The appropriate cannon of construction applicable is that which requires, that the words used be given their natural and ordinary meaning.
The phrase “shall not bind” means that the organs of the State mentioned cannot have imposed upon them a liability in respect of the provisions of the Act of 1978. The language used cannot be held to connote or imply any more than that because to do so, would be, to add language which has not been used. If it had been intended to exclude the organs of State mentioned from availing of the provisions of the Act as a lessee, to acquire the fee simple, in my opinion, additional language would have been necessary to achieve that particular purpose. The fact that a different formulation was used in s. 4(2) of the Act of 1980, does not in my opinion affect the proper construction of s. 4 of the Act of 1978, which must be determined by reference simply to the language actually used in s. 4, ascertaining the true intent of Parliament solely by reference to the natural and ordinary meaning of the words actually used.
It is submitted for the appellants that if the phrase “shall not bind” were to be construed as permitting the respondents to avail of the provisions of the Act, that would create an anomalous situation in that, notwithstanding the fact that the respondents had opted to avail of the provisions of the Act, they could then claim not to be bound by various conditions which must be fulfilled such as ss. 9 and 10 of the Act and could perhaps claim not to be bound by the terms of the award of the County Registrar.
In my opinion the apprehension inherent in this submission is not well founded. Manifestly, in my view if one of the State organs mentioned in s. 4 avails of the provisions of the Act to claim a fee simple they could only be so entitled if they demonstrate compliance with the conditions set out in the Act for entitlement to a conveyance of the fee simple. It must also be borne in mind that whilst every lessee claiming a fee simple must satisfy the conditions set out in the Act to succeed in the claim, no lessee is bound by the process set out in the legislation and can withdraw from it at any point up the conveyance of the fee simple. Thus a lessee who was dissatisfied with the terms of the award of a County Registrar could abandon the claim and withdraw from the process at that stage.
I have come to the conclusion therefore that s. 4 of the Act of 1978 does not exclude the respondents in this appeal from availing of the provisions of the Act of 1978, so as to claim a conveyance of the fee simple of the premises at issue in these proceedings.
SECOND ISSUE
Is there compliance by the Respondents with ss. 9 and 10 of the Act of 1978
The relevant parts of s. 9 are as follows:
“9. – (1) This Part applies to a lessee who holds land under a lease, if the following conditions are complied with:
(a) that there are permanent buildings on the land and that the portion of the land not covered by those buildings is subsidiary and ancillary to them;
(b) that the permanent buildings are not an improvement within the meaning of subsection (2);
(c) that the permanent buildings were not erected in contravention of a covenant in the lease; and
(d) one of the alternative conditions set out in s. 10.
(2) In subsection (1)(b) “improvement” in relation to buildings means any addition to or alteration of the buildings and includes any structure which is ancillary or subsidiary to those buildings, but does not include any alteration or reconstruction of the buildings so that they lose their original identity…”
The relevant parts of s. 10 are as follows:
“10. – The following are alternative conditions one of which must be complied with in a case to which section 9 relates:
1. that the permanent buildings were erected by the person who at the time of the erection was entitled to the lessee’s interest under the lease or were erected in pursuance of an agreement for the grant of the lease upon the erection of the permanent building;
2. that the lease is for a term of not less than fifty years and the yearly amount of the rent or the greatest rent reserved thereunder (either redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of services under section 4 of the Act of 1967 of notice of intention to acquire the fee simple or the date of an application under Part III of this Act, as the case may be, and that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title:
provided that it shall be presumed until the contrary is proved, that the buildings were not so erected;
…
5. that the lease was granted, either at the time of the expiration or surrender of a previous lease or subsequent to such expiration or surrender –
(a) at a rent less than the rateable valuation of the property at the date of the grant of the lease, or
(b) to the person entitled to the lessee’s interest under the previous lease,
provided that the previous lease expired or was surrendered before the 31st day of March, 1931 and that it would have been a lease to which this Part applied had this Act then been in force and provided that it shall be presumed, until the contrary is proved, that the person to whom the lease was granted was so entitled;
6. that the lease is a reversionary lease granted on or after the 31st day of March, 1931 to a person entitled thereto under Part V of the Act of 1931 or the Act of 1958, whether granted on terms settled by the Court or negotiated between the parties;…”
Before considering compliance with either s. 9 or any of the relevant conditions set out in s. 10, I should consider the history of the buildings on these premises. In the course of the hearing several days of evidence were concentrated on the provenance of these buildings with particular controversy focused on the portion of No. 12 Rainsford Street which adjoins Rainsford Street itself. The thrust of the evidence adduced by the appellants, i.e. from Mr. Myles, an archaeologist, was that the building which now stands fronting onto Rainsford Street at No.12 was constructed well in advance of the grant on the 20th day of July, 1860 of the lease from Edward Corles to Adam Millar. The significance of this controversy was that if the appellants were correct, it would mean that at least one of the buildings now on the site was constructed by the lessor rather than the lessee and hence it would at the very least deny compliance with conditions 1 and 5 as set out s. 10.
A starting point in an analysis of the history of the buildings that stood on the lands demised as Nos. 10, 11 and 12 Rainsford Street is the recital in the Memorial of the Deed of 1860. Insofar as No.12 is concerned as, quoted above this premises was described as “ALL THAT AND THOSE the dwelling house, tenement and premises”. Nos. 10 and 11 are similarly described in the Memorial.
The 1847 ordinance survey map was put in evidence. Although this map is dated as of 1847 the evidence was that it described the picture on the ground as of 1838. The earliest reliable survey of property in this part of the city was agreed in evidence to be John Rocques Survey of 1756. The picture demonstrated on this map insofar as the buildings at Nos. 10, 11 and 12 Rainsford Street now fronting onto the street are concerned is by and large similar to that shown in the 1847 Ordinance Survey. Undoubtedly there are changes towards the rear of these properties. A feature of the 1847 Ordinance Survey map is it that it shows steps leading to the fronts of Nos. 10 and 11 but no steps at the front of No. 12. The valuation records for 1853 for these properties described No. 10 as house and yard in common, no. 11 as house and rooms over gateway and no. 12 as house and yard. There is a no. 11a which is described as a dairy yard.
It is apparent thereafter that significant change occurred in the nature of these properties. As of November 1863 the valuation record describes No. 10 as dilapidated and Nos. 11 and 12 as offices and yards. It is clear from the later Ordinance Survey Maps, that is to say the 1864 map, the 1887 map and the 1908 map, that considerable development took place on the site of these three properties thereafter. The 1864 map shows a long building where No. 12 was, extending right to the back of the site and indeed continuously on towards Thomas Street. Behind Nos. 10 and 11 there is also a new structure extending a considerable way back into the site. An L-shaped structure which is present on the 1847 map behind Nos. 10 and 11 and partially behind No. 12 has been removed. The 1887 map demonstrates that the building behind Nos. 10 and 11 has been extended back further into the site and part of a building extending back from Thomas Street encroaches into the site. The 1908 map demonstrates further development with the filling in of a gap between a long building at No. 12 and Nos. 10 and 11. The 1926 Ordinance Survey shows no change to that of the 1908 survey. The 2007 Ordinance Survey map demonstrates considerable change with a removal of all of the buildings where Nos. 10 and 11 stood and the presence of a new building, apparently built after 1979, a corner of which extends into the site occupied by 10, 11 and 12.
All of this development was carried out by Adam Millar or his Company who engaged in the business of rectifying distillers, together with other commercial enterprises over many years. This business would appear to have been conducted primarily from premises which fronted onto Thomas Street and the buildings developed on the site of Nos. 10, 11 and 12 Rainsford Street appear to have been developed as part of the enterprises conducted by Adam Millar or his Company.
The buildings which now stand on this site are, for convenience, divided into four parts described as A, B, C, and D. Building A is that part of No. 12 which fronts on to Rainsford Street. Building B is the block immediately behind this and building C is the block immediately behind building B. Building C extends onwards beyond the site and is part of the buildings extending backwards from Thomas Street. Building D is at the corner of a structure which was built post 1979 and is a warehouse type building used by Lee and Company for the purposes of a cash and carry business.
As far as the provenance of building C is concerned there was little or no controversy. I am satisfied from the evidence that this building was built between 1900 and 1910. The structure of this building is supported by RSJs and the brickwork is built into the supports and it was uncontested that this type of steel structural arrangement did not become available in Ireland until towards the end of the nineteenth century. More particularly the joinery work used in this building is typical of that used in the period in question, i.e. 1900 to 1910.
Building B can be reliably dated to not earlier than 1880. This is because the building is supported on cast iron columns which bear the manufacturers name, namely “J. Sharkey, Church Street”. This manufacturer was not in business prior to 1879. It is apparent from the evidence that these columns were an integral part of the construction of this building and as a matter of probability if not certainty were part of the original construction of the building rather than some later addition.
All the controversy in the evidence centred on building A.
Before dealing in particular with this I should observe that it was clear from the evidence, and indeed there was no contest on this, buildings A, B and C were part of an integral whole, in that the floors ran uninterrupted between all three and were all at the same level and the load bearing capacity of the floors was roughly similar throughout and this load bearing capacity was significantly greater than normal domestic loading but was well below normal industrial warehousing capacity, but may have been adequate and suitable for the particular enterprise carried on there.
I am satisfied from the records mentioned above that when the lease of this building was granted in 1860 No. 12 Rainsford Street was a dwelling house. There may indeed have been some form of lean-to structure in the rear garden of it but no more. It is quite clear from the evidence that the structure which is there now could never have been used as a dwelling and has absolutely none of the attributes of a dwelling house.
The façade of No. 12 onto Rainsford Street is particularly interesting. Mr. Myles, the expert witness called by the appellants, was adamantly of the view that this façade was built well before 1860. He placed particular emphasis on a finding by him of bricks at the side of No. 12 where the archway into the rear was, which he said, dated from an earlier period. He also compared the unusual appearance of the façade to some older buildings in that area of Dublin. He was of the view that the brick pattern used, namely the English Garden Wall Pattern, was commonly used in the early part of the nineteenth century.
Mr. Stewart, a conservation architect, gave evidence for the respondents, was of an entirely different view. His evidence was that the façade of No. 12 as it now stands had not been altered or interfered with since its original construction, save that the top storey was added on later, in his opinion after the construction of the Vat house next door by Arthur Guinness and Company. It was his opinion that the brick pattern used, namely the English Garden Wall Pattern, began to be used only in the later part of the nineteenth century and he was of the opinion that the bricks used in the construction of building A were similar to those used in building B. He was also of the opinion that because of the thickness of the walls in building A and in particular of the party wall with the Vat house next door, that building A was built after the Vat house was constructed in or about 1864 or 1865. In general it was his opinion that the thickness of the walls reflected a later period of building rather than early nineteen century or an eighteen century form of construction.
As said earlier the buildings as demonstrated on Rocques map of 1756 broadly correspond with the buildings depicted at Nos. 10, 11 and 12 fronting onto the street in the 1847 Ordinance Survey map. The evidence from Mr. Myles was that Rainsford Street was first laid out in the early years of the eighteenth century and thereafter plots were sold off and developed speculatively.
In my view it is probable that the buildings at Nos. 10, 11 and 12 which were depicted in 1847 were the same buildings as were shown on Rocques map. As indicated earlier when the lease was granted in 1860, Nos. 10, 11 and 12 were described as dwelling house tenements. It is highly probable, in my view therefore, that the buildings which stood on these premises when the lease was granted were old tenement dwellings. Valuation records confirm this insofar as in November 1863 No. 10 is described as dilapidated. It is clear also from these records the use of Nos. 11 and 12 had by then changed from being that of dwellings to office and yard.
It would seem to me to be improbable that the lessor of these premises, Mr. Corles who lived in England, undertook any development of them before granting the 1860 lease. On the other hand, the lessee, Adam Millar, had a substantial business based in Thomas Street and was clearly in expansion mode when he took this lease in 1860. On the balance of probabilities I would be quite satisfied that it was he who undertook all of the redevelopment that occurred on the sites of Nos. 10, 11 and 12 Rainsford Street.
I accept Mr. Stewart’s evidence that the façade of No. 12 on Rainsford Street, that is still there, was never constructed as the façade of a dwelling house and that this façade has not been interfered with since its original construction. It is quite clear that this façade simply bears no relation to that of a dwelling house. The apertures in it at the ground and first floor level are wholly inconsistent with it being a dwelling house. The fact that similar brick was used in construction of building A and building B suggests to me that it is probable that building B was built soon after building A.
I have come to the conclusion that it is probable that the dwelling structure which was on the site of No. 12 in 1860 was at some stage between 1860 and 1880 demolished and replaced with the structure that stands there to-day and that this new structure was built for the purposes of Mr. Millar’s business. It is not entirely clear exactly what was the original use of this building A. The openings to the side of it do suggest that it may have been used for the stabling of horses. This use is further suggested by the rendering on the walls at the lower level. What is absolutely clear, however, is that building A was never a dwelling house, could never have been a dwelling house.
I have come to the conclusion therefore that all of the permanent buildings now on the sites of Nos. 10, 11 and 12 were constructed by the person who was entitled to the lessee’s interest in the property.
This brings me to a consideration of compliance with ss. 9 and 10 of the Act of 1978.
It is quite clear that for the purposes of s. 9(1) that there are permanent buildings on the land and it was not seriously contested but that the portion of the land not covered by buildings was subsidiary and ancillary to these buildings.
The only alteration or addition is building D. Building D is the corner of a much larger warehouse building which extends considerably beyond the boundaries of the sites of Nos. 10, 11 and 12. This building was built after 1979 and a cash and carry business was carried out in it. On the evidence adduced in this case there is no way that this brand new substantial building could be regarded as subsidiary or ancillary to buildings A, B or C. When I speak of the terms “subsidiary and ancillary”, I accept the definition of them set out by Peart J. in the case of A. O’Gorman & Co. Ltd. v. JES Holdings Ltd. (judgment delivered 31st May, 2005) where he says:
“The word ‘ancillary’ when followed by the word ‘to’ is defined as
‘subordinate, subservient’. The former in turn being defined as ‘of inferior importance or rank; secondary, subservient’, and the latter as ‘subordinate’. Clearly there is considerable overlap in these dictionary definitions.
The word ‘subsidiary’ is given the meaning ‘serving to assist or supplement’.
I find it helpful to regard ‘ancillary’ as meaning ‘of lesser importance or subordinate’ and ‘subsidiary’ as ‘serving to assist or supplement’. These meanings seem to me to accord with one’s ordinary usage of terms.”
Neither in my view can the corner of building D which is on this site be regarded as “an improvement” within the meaning of s. 9(2). Building D is not an alteration or addition to any of the other buildings on site, namely buildings A, B and C. Building D is part of a large modern warehouse building which in turn was part of the complex of buildings which fronted onto Thomas Street and cannot in any sense be considered an addition to or alteration to buildings A, B or C or as ancillary or subsidiary to them.
It remains to consider whether the respondents have satisfied any one of the conditions set out in s. 10. The respondents contend that they satisfy four of these conditions, namely conditions 1, 2, 5 and 6.
Condition 1
For the purposes of a consideration of the applicability of this condition, s. 35 of the Landlord and Tenant Act, 1931 is of crucial importance. It reads as follows:
“35. – Whenever a tenancy is continued or renewed or a new tenancy is created under this Act, in a tenement, such continued renewed or new tenancy shall for the purposes of this Act be deemed to be a continuation of the tenancy previously existing in such tenement and shall for all purposes be deemed to be a graft upon such previously existing tenancy and the interest of the tenant thereunder shall be subject to any rights or equities arising from it being such a graft.”
It is apparent that condition 1 is confined to the person who “was entitled to the lessee’s interest under the lease…”. The lease under which the respondents hold their interest is the 1958 lease. Manifestly the permanent buildings were not built during the currency of that lease except for building D. Buildings A, B and C were built during the currency of the 1860 lease. However, in my opinion, and I will deal with this later in greater detail, when the 1958 lease was granted the lessee under the 1860 lease was in my view, entitled to a reversionary lease under the Landlord and Tenant Act, 1931 which was negotiated between the parties and hence the tenancy created in the 1958 lease became by virtue of s. 35 of the Landlord and Tenant Act, 1931 a graft upon the tenancy existing under the 1860 lease.
The importance of this is that for the purposes of condition 1, the reference to “the lease” in condition 1 includes also the 1860 lease both tenancies being grafted.
As I have held that buildings A, B and C were erected by the person entitled to the lessees interest under the 1860 lease and building D was built by the person entitled to the lessee’s interest under the 1958 lease, it necessarily follows therefore that all of the permanent buildings were erected by the person who was entitled to the lessee’s interest. Hence in my view, condition 1 has been amply satisfied.
Condition 2
Manifestly the term of the 1958 lease is for not less than 50 years and the rent at £150.00 is, on the face of it, less than the rateable valuation as of the 14th February, 2003. The certificate of valuation put in evidence shows that the rateable valuation as of that date was €761.84.
The appellants contend that the certificate of valuation demonstrates that the rateable valuation of €761.00 is in respect of several properties, including Nos. 10, 11 and 12 Rainsford Street. The evidence of the appellants was that the true valuation of Nos. 10, 11 and 12 at the relevant date was €40.00.
It was submitted by the appellants that the onus rested on the respondents to establish precisely the rateable valuation of the premises. The respondents submit that they were entitled to rely upon a certificate of valuation as prima facie evidence of the valuation and if that was disputed by the appellants or any other parties, they were entitled to apply to the Commissioners of Valuation under s. 3, subs. (5)(b) of the Landlord and Tenant (Ground Rents) Act, 1967 [the Act of 1967] for an apportionment of the rateable valuation. The subsection reads as follows:
“(b) where land demised by a lease or held on a yearly tenancy does not on a particular day bear a separate rateable valuation, the Commissioner of Valuation shall have power for the purpose of this subsection to apportion the rateable valuation or valuations of the properties in which the land was comprised on that date and to charge a fee for the apportionment….”
Furthermore it was submitted that the appellants did not in the course of the arbitration before the County Registrar seek to rely upon s. 20(1) of the Act of 1967 which reads as follows:
“20. – (1) A county registrar conducting an arbitration under this Act may and, if so requested by any party concerned, shall cause to be sent to the Commissioner of Valuation a request for a valuation, estimate or statement in respect of any particular matter relevant to the determination of the purchase price of the fee simple in land being acquired under this Act or to the apportionment of a rent under this Act and may for the purpose adjourn the arbitration.”
It was submitted that the appellants failed to rely on either of these two provisions which would have enabled them either independently of the arbitration or as part of the arbitration to have established a separate valuation for Nos. 10, 11 and 12 Rainsford Street and having failed to do this, the rateable valuation as established in the certificate of valuation cannot be disturbed.
Valuations are determined by the Commissioner of Valuations. There are procedures there as set out above for seeking an alteration or apportionment of the same.
Where there are established statutory procedures for seeking separate valuations as provided for in s. 3(5)(b) and also in s. 20(1) of the Act of 1967 and where no recourse was had to the Commissioners of Valuation under these statutory procedures which were available to the appellants, in my view this Court should not go behind the certificate of valuation so as to in effect usurp the statutory function of the Commissioners of Valuation to determine the correct valuation.
The determination of valuations is a function which requires expertise. That function has, for over 150 years, reposed by virtue of statute, in the Commissioners for Valuations who, in my opinion,, are to be regarded for that purpose as an expert Tribunal, to whom the courts should accord curial deference. This is entirely appropriate having regard to the fact that the Oireachtas has made provision for recourse to the Commissioners, where that is necessary or appropriate, as mentioned above.
In these circumstances therefore, I have come to the conclusion that this Court must accept the valuation as stated in a valid and subsisting certificate of valuation and accordingly must conclude that the respondents were entitled to rely upon condition 2 in that the rent of the property as of the 14th February, 2003 was £150.00 which manifestly is much less than the certified rateable valuation as of that date.
Condition 5
The 1860 lease expired on the 30th April, 1959. The lease of 1958 commenced on the 1st May, 1959, i.e. only on the expiry of the 1860 lease. The rateable valuation in 1958 was £550.00, both in respect of Nos. 10, 11 and 12 Rainsford Street and of the other properties. This valuation was never separately apportioned to any of these properties individually and having regard to what I have previously said it has to be taken as the operative rateable valuation for the purposes of s. 10 of the Act of 1978. Accordingly on that basis alone condition 5(a) is satisfied.
Insofar as condition 5(b) is concerned, there was the same lessee under both 1860 lease and the 1958 lease, the latter becoming a graft upon the former and in my opinion had the 1978 Act being in force in 1958, clearly the 1860 lease was a lease to which Part II of the Act of 1978 would have applied.
I am satisfied therefore that the respondents in this appeal comply with condition 5.
Condition 6
The question here is whether or not the lease of 1860 is to be regarded as a “building lease” within the meaning of s. 46(1) of the Landlord and Tenant Act, 1931 thereby entitling the lessee to a reversionary lease under s. 41(1) of that Act.
Section 46(1) is in the following terms:
“46. – (1) In this part of the Act the expression ‘building lease’ means a lease in respect of which all the following conditions are complied with, that is to say: –
(a) the land demised by such lease is situated wholly in an urban area;
(b) there are permanent buildings on such land and the portion of such land not covered by such buildings is subsidiary and ancillary to such buildings;
(c) such permanent buildings are not an improvement within the meaning of this Act;
(d) such permanent buildings were erected by the person who at the time of such erection was entitled to the lessees interest under such lease;
(e) such permanent buildings were not erected in contravention of a covenant, condition or agreement contained in such lease.”
For the reasons already stated above, in my opinion the lessee on the expiration of the 1860 lease satisfied all of the conditions (a) to (e) inclusive set out above.
Section 47(1) of the Act of 1931 provides as follows:
“47. – (1) At any time within seven years before the expiration of a building lease, any person in possession of the land or any part of the land comprised in such lease and holding the same under such building lease or under a proprietary lease shall, subject to the provisions of this Part of this Act and obtaining the consent (if any) required by this section, be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease, a reversionary lease on the terms fixed by or under this Part of this Act of the said land so possessed held for him as aforesaid.”
It is clear, in my view, that from 1952 onwards the lessee, under the 1860 lease, was entitled to seek and obtain a reversionary lease of these premises.
There is no evidence of the lessees having applied to Court to fix the terms of such lease and it would seem to me to be probable that the granting by the lessor of the 1958 lease was by virtue of the entitlement of the lessee to a reversionary lease and accordingly the granting of the lease and the terms thereof were probably fixed by agreement.
That being so, it is my view that the respondents herein satisfy condition 6.
Thus I have come to the conclusion that the respondents have satisfied the requirements of ss. 9 and 10 of the Act of 1978 and are entitled to a conveyance of the fee simple.
THIRD ISSUE
Computation of Purchase Price
The determination of the purchase price is now governed by s. 7 of the Landlord and Tenant (Amendment) Act, 1984, and in particular s. 7(3) thereof. This subsection reads as follows:
“(3) Subject to the provisions of this section, the purchase price shall be the sum which, in the opinion of the arbitrator, a willing purchaser would give and a willing vendor would accept for the fee simple or other interest at the relevant date having had regard to—
( a ) the rent payable for the land by the person acquiring the fee simple,
( b ) where, at the relevant date, the land is held under a lease which provides for an increased rent payable within fifteen years after that date, the amount of that increase and the time when it becomes payable,
( c ) the current interest yields on securities of the Government issued for subscription in the State,
( d ) if the land is used for the purposes of business, or exceeds one acre in area and is not used for the purposes of business, the area and nature of the land, its location and user and the state of repair of any buildings or structures thereon,
( e ) the price paid for the fee simple or any other interest in the land on a sale taking place on or after the 22nd day of May, 1964,
( f ) any mortgage or other charge on the interest in the land of any person from whom, mediately or immediately, the person acquiring the fee simple holds the land,
( g ) the costs and expenses which, in the opinion of the arbitrator, would be reasonably incurred by the persons from whom, mediately or immediately, the person acquiring the fee simple holds the land, in investing the purchase money payable in respect of the acquisition of the fee simple,
( h ) the costs and expenses which, in the opinion of the arbitrator, have been incurred by a person acquiring the fee simple who holds the land under a lease by reason of the failure of the lessor to maintain any amenities which he is required to maintain under a covenant in the lease,
( i ) the current price of the immediate lessor’s interest in land held under leases or yearly tenancies similar to the lease or yearly tenancy, as the case may be, under which the land is held by the person acquiring the fee simple, and
( j ) such other matters as are, in the opinion of the arbitrator, relevant to the determination of the purchase price.”
As is readily apparent (b), (f), (h), and (i) have no relevance to the computation of the purchase price in this case.
The case made by the appellants on the question of valuation, supported by the evidence of Mr. Ffrench O’Carroll, a valuer, was that the premises in question were ripe for redevelopment; that the buildings on the site, by and large, had reached the end of their natural life and were fit only for demolition and added nothing to the value of the property; that the inclusion of the site in the Digital Hub area meant that the premises had a very favourable zoning for development purposes; that having regard to the time left to run on the 1958 lease, i.e. a fifty six years from the service of the statutory notice, the lessee would not be in a position to develop the premises and offer marketable titles. Thus, in the context of a conveyance of the fee simple from a willing vendor to a willing purchaser, the purchaser i.e. the lessee would be willing to pay a significant portion of the potential development value, in order to achieve the uplift in that value which the acquisition of the fee simple would contribute. Without that acquisition, it was contended, it would not be possible to market the redevelopment of the premises.
It was submitted that the development potential of the site was a factor which should have been taken into account by the County Registrar under subpara. (d) of
s. 7(3).
Against this it was submitted by the respondents that subpara. (d) did not have any application because the premises in question have not been used for the purposes of business since the Commissioners of Public Works in Ireland purchased the leasehold interest in 2001, and the site does not exceed one acre in area. In this regard reference was made to the evidence of Mr. Ffrench O’Carroll who regarded the premises as a disused or brown field site. It was further submitted that having regard to the time left to run on the lease i.e. fifty six years from the service of the notice of intention to acquire the fee simple, that the fee simple interest carried with it no development potential as the right to occupy and develop was too far into the future to attract any development value.
In this regard reference was made to s. 7(4) which deals with the computation of purchase price where a lease has expired and where there is specific provision that the development plans of the lessor or the party from whom a conveyance is sought, are to be disregarded for the purposes of computation of the price to be paid.
Achieving a full understanding of subpara. (d) is not easy, particularly in the context of a brown field site.
On the one hand, it could be said that, in the situation where the permanent buildings on the land have by and large reached the end of their life and contribute little or nothing to the overall value of the premises that the intrinsic value contributed by the ground and in particular potential development value should be a weighty factor in determining price.
However, the initial phrase in subpara. (d) “if the land is used for the purpose of business” militates against such an approach in the sense that when the buildings reach this stage of dilapidation and disuse, it is likely that they are no longer used for the purpose of business and hence, unless the area exceeds one acre the factors set out in subpara. (d) would have to be disregarded.
If one places a very broad construction on the phrase “used for the purposes of business” so as to permit the application of subpara. (d), one is still left with the operation of the governing principle, namely, what would a willing purchaser pay a willing vendor, for the interest being sold. In this case the interest being sold is the fee simple in circumstances where there will be no occupation by the fee simple owners for at least fifty six years but in reality, assuming the existence of statutory rights to a new lease similar to those currently existing, the right of the fee simple owner to resume possession is postponed well beyond the 56 years.
If subpara. (d) applies, the factors to which regard must be had under it, must be given due weight. Thus, whereas in this case, the buildings on site contribute little intrinsic value and the real value of the premises is contributed by the ground, regard must be had to this and due weight given. Necessarily however, if the right to repossess is remote in the future the ultimate weight to be attached to these factors in terms of the purchase price will have to be greatly attenuated.
Mr. Ffrench O’Carroll estimated the value of the site at approximately €4.6 million. Mr. Goode, the valuer who gave evidence on behalf of the respondents disagreed with this valuation. If one were to accept that the actual value of the site was in the region of €3.5 million euro because of its development potential as part of the Digital Hub area, giving fair weight to the contribution of the ground to that value but bearing in mind the remoteness of the fee simple owners right to possess and thereby enjoy that development potential, only a very small portion of the full value of the premises enhanced by that development value should be reflected in the purchase price. In my view this should not exceed five per cent of this. In this case I would estimate that to be approximately €17,500.
I am inclined to the view that the court should adopt a broad approach to the question of whether or not the premises were used for business purposes. Although the premises were acquired by the Commissioners of Public Work in Ireland in 2001, the photographs which were put in evidence illustrate that after the service of the notice on the 14th February, 2003, some kind of business activity was going on there. This appears to have been concentrated in building D and the car park appears to have been well used. On that basis, therefore, I would be inclined to the view that these premises were used at the relevant time for the purposes of business and therefore subpara. (d) does apply.
The purchase price fixed in this case of €40,600 represents some uplift on the price paid by the appellants for this site namely £25,000 in the year 2001, but it would not in my view appear to reflect any sum in respect of the factors set out in subpara. (d) as discussed above.
In order to give application to the factors set out in subpara. (d) which are in my view relevant in this case having regard to the nature of the premises as of the date of service of the notice to acquire the fee simple in February, 2003, a sum in the order of that I have mentioned above should have been added to the purchase price so that due regard can be said to have been given to these relevant factors.
Therefore I would alter the purchase price by the addition thereto of the sum of €17,500 bringing the purchase price to €58,100.