Leasehold Interests
Cases
Re George E. Moore’s Estate
Land Commission.
16 December 1901
[1902] 36 I.L.T.R 14
Meredith J.
Meredith, J.
I have looked very carefully into the matter, and I have satisfied myself that the argument of Mr. Pringle is substantially correct, and that the Earl of Dartrey has no substantial interest in the timber either at present standing or cut in the early part of this year. The claim arises under a fee-farm grant of the 11th Nov., 1853, which after reciting the original lease of the 31st July, 1708, and the various renewals, proceeds to grant the lands, “excepting and reserving as in the said original lease of the 31st July, 1708, is excepted and reserved,” and there follows a covenant, declaration and agreement that the grant shall be “subject to such other covenants, conditions, exceptions, duties, and reservations (save and except the covenant for perpetual renewal) as are in the said original indenture of 31st July, 1708, reserved and contained, and are now subsisting.” The lease of 1708 granted these lands for lives renewable for ever, “excepting all mines, minerals, wood, timber, trees, and royalties whatsoever, which the said Hugh Willoughby doth reserve and except out of this present demise to him and his heirs for ever, with liberty of cutting down, digging and carrying away the same.” Mr. Pringle’s main argument rests upon the provisions of 5 Geo. III., c. 17 (Ir.), s. 1, which after reciting that “whereas the distress this kingdom must soon be in for want of timber is most obvious; and whereas it is equal to inheritors whether tenants do not plant, or have a property in what they plant,” enacted that after the first of Sept., 1766, “tenants for lives renewable for ever, paying the rents and performing the other covenants in their leases, shall not be impeachable of waste in timber, trees, or woods which they shall hereafter plant, any covenant in leases or settlements heretofore made, law, or usage to the contrary notwithstanding.” I think I may say in the words of the preamble that “the distress this kingdom must soon be in is most obvious,” if the course here pursued be followed by other new proprietors. The ink was hardly dry on the agreement before the new proprietor proceeded to cut down practically all the timber on his holding, and thereby secured a considerable portion of his purchase-money; but I hope proprietors will see that it is not for the benefit of their holdings to do so. The question is whether the Earl of Dartrey has a right to get an equivalent to the value of the timber so cut and that still left standing on the lands, which form portion of this estate. The case of Galwey v. Baker is an extremely important one, but I think the case of Pentland v. Somerville, 2 Ir. Ch. R. 289, is still more important. The headnote to that case is “tenants for lives with a covenant for perpetual renewal are, by the statute of 5 Geo. III., c. 17 (Ir.), rendered unimpeachable of waste in respect of trees, planted by them since the passing of that Act, whether the trees be or be not registered, and whether the leases, under which the tenants claim, are of a date prior or subsequent to the passing of that Act,” and the Lord Chancellor having referred to the statute at p. 293, says with reference to s. 2—“Now, that section treats of tenants for lives impeachable of waste, and, therefore, plainly does not include tenants for lives renewable for ever, inasmuch as the previous section had declared that the latter class of tenants should not be impeachable of waste. The section contains also the words ‘any covenant heretofore made, &c., to the contrary notwithstanding,’ and yet it is admitted to apply to leases made since the passing of the Act. So it appears to me to do, and to that effect all the decisions on the subject tend so far *15 as they have gone. The third section contains directions as to the system of registration to be pursued by tenants—that is to say, in my opinion, tenants falling within the second section.” He then dealt with Galwey v. Baker, and having pointed out that the trees were there registered, but that the lease reserved not only all trees then growing or being on the demised premises, but also which at any time therea ter might stand or grow thereon, continued—“The House of Lords seemed to consider, although it did not expressly decide, that it might be competent for the parties to introduce covenants restrictive of the lessee’s rights under the statute, and held that the words of reservation should be construed in the strictest manner, and did not comprehend trees thereafter planted by the tenant; and Lord Brougham said that trees might stand or grow from the old stocks, which would fulfil the words of prospective aspect contained in the reservation. Thus the House of Lords refused to carry the meaning of the words one jot beyond their narrowest import, and, accordingly, ruled that they were not sufficient to deprive the lessee of the benefit of the statute which gave him the property in the trees planted by him.” Now, this I think plain, that a tenant holding under a lease for lives is unimpeachable for waste in respect of trees planted by him after 1766, whether the lease under which he holds was made before or after that date. A question was raised by Mr. Wakely and Mr. Brown as to the effect of the fee-farm grant, and they contended that the true construction of the fee-farm grant was to repeat the exception in the lease, so that the fee-farm grant of 1853 excepted to the grantor all the trees then standing or growing on the holding; but in Pentland v. Somerville, at p. 296, the Lord Chancellor quotes from Furlong’s Landlord and Tenant, p. 666, as follows:—“The object of the statute was to give a tenant enjoying a perpetual interest in lands the benefit of his labour and expenditure in planting, and a different construction would have the effect of defeating the intention of the legislature. The renewal is granted in pursuance of the covenant for the purpose in the original lease, and does not afford any ground for presuming that the tenant intended to relinquish any right which he previously possessed;” and said—“Now, that appears to me to express the true and plain construction of these statutes, and is consistent with common sense, and I think that there cannot be any doubt whatever that this tenant is unimpeachable of waste in respect of all trees planted since the execution of the lease.” But the matter is put beyond doubt by In re Renewable Leasehold Conversion Act, exp. Armstrong, 8 Ir. Ch. R. 30. There a lease for lives renewable for ever, made before the passing of the 5 Geo. III., c. 17 (Ir.), contained an exception of all timber trees then standing or growing, or being, or which at any time thereafter should be standing, or growing, or being on the demised premises, and it was held that in a fee-farm grant under the Renewable Leasehold Conversion Act the exception should not be inserted in those terms, but should be altered, having regard to the rights of the tenant under the statute. There the exception was of “all woods, timber, and timber trees now growing or being, or which at any time hereafter during this demise shall be standing, growing, or being, or in or upon the demised lands or premises,” the lessor nsisted that the reservation in the fee-farm grant should be in exactly the same terms as in the original lease, but the Master of the Rolls, having referred to s. 1 of the 5 Geo. III., c. 17, said—“It is quite a novel proceeding for a landlord to insist that there is to be inserted in the fee-farm grant an exception of that which the tenant is, by statute, legally entitled to. The tenant might be very much embarrassed by such a clause. It is impossible to say that litigation might not arise from it. I think, therefore, that the fee-farm grant should be framed according to the existing legal rights of the parties, having regard to the 5 Geo. III., c. 17.” There is no doubt what the rights of the parties were under the lease of 1708, and, in my opinion, the framers of this fee-farm grant took care that the grantee should not be embarrassed, for in the grant the covenant is that the grant shall be subject to such other covenants, conditions, exceptions, duties, and reservations as are in the said indenture of 1708 reserved and contained, “and are now subsisting.” The true construction is to except and reserve trees which were excepted and reserved in the original lease of 1708, and not to include by way of exception trees planted since 1766. Lord Dartrey is entitled to any timber standing on the premises in 1708, and any growing from old stocks then in the ground. He is not entitled in any shape or form to trees planted since the statute of 5 Geo. III., c. 17, and I have evidence that the trees cut down and now growing on the premises were, or are mainly, under 100 years old, and certainly not 150. I am satisfied that what is left is timber which in the main has been planted since 1766. I shall add £5 to the sum already fixed for mines and minerals as more than sufficient to compensate the Earl of Dartrey for any timber to which he is entitled.
Hickey v Ronayne
High Court of Justice.
Chancery Division—Land Judges.
26 June 1901
[1901] 35 I.L.T.R 208
Ross J.
Ross, J.
The substance of the recitals in the deed of 1811 is to the effect that Thomas Duckett was building a street in the direction of a field belonging to Patrick Kivers. Patrick Kivers was anxious to convert his field into building ground. For this purpose it was necessary for him to obtain a passage from the new line of street into his field, so as to continue the line of street through his said field. Under these circumstances he proposed to pay a yearly rent of £10, the rent to be payable by distress or otherwise from off Kivers’ field or the house to be erected on it. The lease is for lives of persons mentioned and such other lives as should be added. It contains no express covenant on the part of the tenant to take a renewal, but I have no doubt that such a covenant ought to be implied. The terms used in the deed show plainly that the parties contemplated that the lease should be a lease for ever. In the covenant to add new lives occurs the expression, “lives successively for ever hereafter to be nominated.” Further on we find, “so that Patrick Kivers may at all times for ever hereafter have a term of three lives in being and undetermined in the said passage.” I think the principle laid down in Pilson v. Spratt, 25 L. R. Ir. 5, and Ward v. M’Roberts, 25 L. R. Ir. 224, apply. The last life died in 1863, but the rent has been paid till recently, when, by a ruling in the receiver side, the receiver was ordered to cease making payments. Under the circumstances I have mentioned it is *208 impossible to make any case of laches or of conduct likely to lead the lessor to believe that the lease was at an end. The case was made that the street became a public street, and that the soil had become vested in the Corporation of Clonmel. If this had been so, the lessor would have been unable to renew the lease, and the present application must have failed. An adjournment was applied for to obtain evidence, and no such evidence is available. It is now alleged that although the soil remains in the lessor, the public must have acquired a right of way in this public street. But where a private right of way exists, and the public subsequently acquire a right of passage over it, the private right is still paramount, and can co-exist with the public right. The private right does not become merged in the public right, and consequently the person entitled to the private right of way may resort to remedies that are not open to a member of the public in case the way was obstructed (see Pratt on Highways, p. 23). Many cases could be cited where public rights of passage may be acquired, subject to the exercise of continuing private rights. But even apart from this, what was the subject-matter of the lease? “All that and those free, open, and uninterrupted passages for him, the said Patrick Kivers, his heirs, and for all others, and his and their horses, carts, &c.” In other words, the passage was to be used as the entrance to a public street. If Duckett had stopped anybody who desired to resort to Kivers’ street he would have been violating the express term of his own lease. It would be wholly inequitable to allow Kivers to set up in answer to a claim for specific performance a contention that Duckett had kept an open passage for Kivers and all other persons, the very thing he was obliged to do by his lease. This estate has therefore no answer whatever to the demand for renewal. The ruling stopping payment must be rescinded, and the rent must be paid.
McDermott’s Estate
[1921]
1 I.R. 114
SIR JAMES CAMPBELL C. :
We are all agreed that the words of this statute are too strong to enable the limited construction adopted by Ross J. to be placed upon the words “adequate compensation.” Had the clause merely provided that the lessee should be entitled to relief on payment of adequate compensation, it might well have been held that it was left to the discretion of the Judge in each case, having regard to the circumstances and facts, to arrive at the true measure of such compensation. It is impossible, however, to leave out of consideration the previous words of the preamble, on which Mr. Brown has properly laid stress,”and to the end that such interests”that is, the interests of the tenants”may not be defeated by a mere neglect, where no fraud appears to have been intended, upon making full satisfaction to the lessors.” In view of these words, we are driven to the conclusion that the words “adequate compensation” in the enacting portion of the clause are equivalent to the foregoing words, “full satisfaction,”and that the limited construction put upon these words by Ross J. cannot be upheld. This construction is in accordance with what appears to have been the unbroken course of procedure and authority during a lengthy period of years; and, in the absence of any authority to the contrary, we are bound to give full effect to what we consider to be the true meaning of the words”adequate compensation.” The appeal will accordingly be allowed.
[1920]
1 I.R. 85
PATRICK M’DONNELL v. SARAH STENSON
(1919. No. 944.)
Landlord and tenant – Lease for three lives and ninety-nine years, whichevershall continue longest – Covenant by landlord to nominate new life on deathof every cestui que vie before expiration of term of ninety-nine years -Non-renewal – Death of tenant intestate – Tenancy for term of years -Estate pur autre vie.
By indenture made in 1832, lands were granted to M., his heirs and assigns, for the lives of three persons, or for the term of ninety-nine years, whichever should continue longest, with a covenant by the landlord that on the death of each cestui que vie dying during the term the landlord would nominate another life in place of that of the cestui que vie so dying. The cestuis que vie named in the lease died in 1863, 1864, and 1893 respectively; no new life was ever nominated. The tenant died intestate in 1918.
Held that there was an equitable freehold in the lands comprised in the lease.
ORIGINATING SUMMONS.
By indenture dated 1st February, 1832, Sir Francis Lynch Blosse demised and granted to James M’Ellinn certain lands “to have and to hold all and singular the said premises hereby demised or intended so to be, with their and every their appurtenances (except as before excepted), unto the said James M’Ellinn, his heirs, executors, administrators, and assigns, from the day next before the day of the date of these presents, for and during the natural life and lives of Robert Lynch Blosse, William Lynch Blosse, and Francis Lynch Blosse, the first, second, and third sons of the said Sir Francis Lynch Blosse, and for and during the natural life and lives of such other person or persons as by virtue of a clause for renewal hereinafter mentioned may be added thereto, and for and during the term, time, and space of ninety-nine years, to commence at and be computed from the first day of May last past, whichever of the said lives or years shall continue longest,” at the rent of five shillings per year. The covenant for renewal contained in the said lease was as follows: “And the said Sir Francis Lynch Blosse doth for himself, his heirs,
[1920]
1 I.R. M’Donnell v. Stenson.
Powell J. 86
executors, administrators, and assigns, covenant, promise, and agree to and with the said James M’Ellinn, his heirs and assigns, in manner following, that is to say, that in case the cestui que vie in this indenture named should happen to die before the expiration of the said term of ninety-nine years, that then and in such case he, the said Sir Francis Lynch Blosse, his heirs and assigns, shall and will, on the death of the person so happening first to die as aforesaid before the expiration of said term of ninety-nine years, and on payment of all rent and arrears of rent then due and owing, add and insert to the time and term of this demise the life of such person as he, the said Sir Francis Lynch Blosse, his heirs or assigns, shall nominate and appoint in the place and stead of the person so happening first to die as aforesaid, which life so to be added and inserted is to be endorsed on this indenture, or written on a separate deed or label for that purpose, and in like manner from time to time during the said term of ninety-nine years upon the death or failure of any other cestui que vie in this indenture named or hereafter to be successively nominated as aforesaid, and upon payment of all arrears of rent which shall then be due, that then he, the said Sir Francis Lynch Blosse, his heirs and assigns, shall and will immediately after the death or failure of every other such cestui que vie so successively happening to die before the expiration of said term of ninety-nine years as aforesaid, add and insert to the time and term of this demise the life of such other person as he, the said Sir Francis Lynch Blosse, his heirs or assigns, shall nominate, which several lives so to be nominated and inserted successively are to be endorsed on this indenture, or written on separate deeds or labels as aforesaid.”
By another indenture, dated 28th August, 1855, Sir Robert Lynch Blosse demised and granted to Patrick M’Ellinn other lands, to hold unto the said Patrick M’Ellinn, his heirs and assigns, during the lives of three cestuis que vie therein named, and for the term of ninety-nine years, whichever of the said lives or years should continue longest, with a covenant for renewal similar to that contained in the said lease of 1st February, 1832. The cestuis que vie named in the lease of 1st February, 1832, died in 1863, 1864, and 1893 respectively; those named in the lease of 28th August, 1865, died in 1870, 1893, and 1915 respectively; no new life was ever nominated in the case of either lease. Both the said leases became vested in Barbara M’Donnell, who died intestate on 11th February, 1918. The plaintiff was the heir-at-law of Barbara M’Donnell, and the defendant was administratrix of her personal estate. The summons was brought for an order declaring who was entitled to the two leases.
James Henry, for the plaintiff:
The plaintiff is within the equity of the Tenantry Act; there is no time after the death of a cestui que vie within which the renewal must be made; the non-renewal was not owing to any laches on the part of the tenant, but to the default of the landlord, whose duty it is to renew under the covenant. Since the granting of the respective leases possession has continued as before, and the rents have always been paid and received. The tenant is entitled to a renewal at any time during the term of ninety-nine years: M’Dermott v. Caldwell (1); Lyne on Leases, at pp. 64 and 220.
Carson , for the defendant:
The Tenantry Act has no application by analogy or otherwise where the covenant is one to renew within a limited period only. The tenant having failed to obtain a renewal within a reasonable time after the death of the last surviving cestui que vie, the right to renewal was lost, and the lands were thenceforth held for the alternative term of ninety-nine years: Hussey v. Domvile (2),at p. 444; Domvile v. Callwell (3); Hussey v. Domvile, No. 2 (4).The object of the alternative term of years was to protect the tenant in the event of his losing the right of renewal, and the creation of the term shows that the tenant might lose that right.
POWELL J. :
This is an originating summons brought by the plaintiff, claiming to be entitled to certain premises as heir-at-law of one Barbara M’Donnell, deceased, against the defendant, the administratrix of the deceased, for the determination of a question arising in the administration of the estate of the deceased, namely, whether two houses, situate at Balla, in the County of Mayo, held respectively under two indentures of lease dated 1st February, 1832, and 28th August, 1855, are property which passes to the plaintiff, the heir-at-law of the deceased, or whether they are personal estate and vest in the defendant?
[His Lordship read the habendum and the covenant for renewal in the lease of 1st February, 1832, and said that the habendum and covenant for renewal in the lease of 28th August, 1855, might be considered as identical for the purpose of the present case.]
According to the affidavit of Samuel George Rutherford, solicitor for the plaintiff, Robert Lynch Blosse, the first life in the first lease, died in 1893; William Lynch Blosse, the second life in the first lease, died in 1863, and Francis Lynch Blosse, the third life in the first lease, died in 1864. As to the lives in the lease of 28th August, 1855, Sir Robert Lynch Blosse died in December, 1893; William Cunningham Lynch Blosse died in 1870, and Francis Lynch Blosse died in 1915. Mr. Rutherford, in his affidavit, further says that he searched in the Registry of Deeds, and made inquiries with a view of ascertaining if these leases or either of them had been renewed, and that he believed as a result that the leases had not been renewed, and this fact is not in dispute. It also appears from Mr. Rutherford’s affidavit that the Lynch Blosse Estate, upon which the property referred to is situate, was sold to the Congested Districts Board, and that the deceased had signed an agreement for the purchase of (inter alia) these premises, which are described as being held under the lease mentioned.
The holdings purported to be vested in the deceased on the 29th May, 1919, but as this vesting was subsequent to the date of the death of the deceased, it is, of course, void, and the holdings will have to be vested in the proper person before they can be registered under the provisions of the Local Registration of Title (Ireland) Act, 1891.
Mr. Henry, who appeared for the plaintiff, contended that there is an equitable right to a freehold by reason of the covenant to renew, and that this equitable estate in freehold remained so long as the equitable right to a renewal was in existence, and he relied on the fact that there was no fine to be paid on renewal, and no period mentioned in the covenant within which the renewal was to be obtained.
Mr. Carson, on behalf of the defendant, says that, notwithstanding the fact that there was no time limit within which the renewal was to be obtained, it was the duty of the lessee within a reasonable time after the death of the respective lives in the leases to renew, that consequently thenceforth the lands were held for the residues of the terms of years mentioned in the leases, the purpose of the terra of ninety-nine years being to protect the tenancy; and that, no renewal having been obtained within a reasonable time after the fall of the first life, the deceased’s right to a renewal was gone, and that he must be deemed to have waived this right.
It is quite plain that this case is not within the Tenantry Act, either under its terms or its equity. The Tenantry Act gives relief only to tenants who hold under leases containing covenants for perpetual renewal, and this lease is only renewable for lives nominated during a term of ninety-nine years.
The Vice-Chancellor in Hussey v. Domvile (1) held that the Tenantry Act had not received its strict construction, nor had it been restricted to cases within its letter; that, being a remedial Act, it had been acted upon in cases within the equity of it, that is, cases where a similar injustice exists to which a similar equitable consideration should, in order to prevent a like wrong, be afforded by a Court of equity. But the Court of Appeal did not take this view, which is disposed of by the language of Lord Justice FitzGibbon in his judgment, where, having discussed the objects, intent, and purport of that Act, he says that “the uniform course of decision both before and since the Act has limited this so-called ‘equity’ to cases in which the demise proves an intention that the tenure shall be perpetual. . . . The equity to relief in the cases of leases for years perpetually renewable, and of leases perpetually renewable on a peppercorn fine, is really the same as that which the Act validates, and the Vice-Chancellor may even have been justified in M’Dermott v. Caldwell (1) in regarding a thousand years as in the sight of equity equal to eternity.” Mr. Henry relied upon the decision in the case of M’Dermott v. Caldwell (1), but it is quite plain that it cannot affect the decision in this case, because ninety-nine years is certainly not equal to eternity. FitzGibbon L.J. proceeds: “But no case until this has given relief where the intent that the tenure shall be perpetual does not exist. The English authorities and the general principles and equity alike prescribe that specific performance can only be enforced upon the terms of the contract, and that a party who has not observed it on his side cannot be relieved from the contractual consequence of his own mere neglect.” And further on he says: “There is no trace of authority for the extension of the statutory relief to a case where the right of renewal is limited to a term of years. In such cases the intention that the tenure shall continue is absent. The tenure is to terminate whenever the period fixed by the contract runs out. It is impossible to contend that time is not of the essence of the stipulation fixing the time for nominating fresh lives.”
If the tenant could wait for twenty years, he could wait until the period fixed by the lease was running to a close; the intention, to borrow a metaphor from the cases, being that the tenure should last only while a triple set of candles, each replaced immediately as it burned down, or was blown out, during a limited time, might continue to burn; the chance of its duration would be immeasurably increased if three fresh candles could be lighted all at once at the last minute.
The covenants in the present case are not covenants similar in terms to the covenant in Hussey v. Domvile (2). The term of the lease in that case was to hold the lands unto the lessee, his heirs and assigns, for certain lives therein mentioned, and for the lives of the survivors and survivor of them, and for and during the lives and life of all and every such other persons and person as by virtue of the covenant for renewal thereinafter contained should from time to time successively be added thereto during the term of years in the said covenant mentioned; and the covenant by the lessor was that upon the death of the lives or life in the lease, or any of them, which should first happen within the term of seventy years, to be computed from the 1st May, 1823, the lessee paying to the lessor the sum of 5s., and upon the nomination of the life of any other person within six months next after the death of such person or persons as aforesaid by the lessee, his heirs or assigns, at his or their own request to be put and inserted in the place and stead of the persons so happening to die, which life so added and inserted was to be endorsed on the said lease, or to be written in a deed, label, or parchment to be affixed to the said lease, or in a separate deed or writing, declaring the life so failing, and the life so to be added in lieu thereof, and the three lives in being during which the said estate should be then to continue, and in like manner from time to time successively thereafter during the term of seventy years upon the failure of every other life in the said lease, then nominated and thereafter to be successively nominated, and upon the like nomination of any other life successively in lieu of every several life so failing, then the lessor upon the demand of the lessee upon the like payment of 5s. for the fall of every such life at the time of such demand to be made as aforesaid would successively thereafter during the term aforesaid add and insert to the term of the lease the several life or lives of the several person or persons so successively nominated in place of the several person or persons so successively happening to die as aforesaid, which several lives so to be added should be endorsed on the lease or written in the manner therein mentioned.
In the present case it was the lessor who contracted to nominate the lives, and the lease is for the life and lives of the persons named in the leases, and for and during the life and lives of such other person and persons as by virtue of the of the clause for renewal might be added thereto, or for and during the time, term, and space of ninety-nine years, to commence on, and be computed from, the 1st May last past, whichever of the said lives or years shall continue the longest.
The first life in the lease of the 1st February, 1832, dropped fifty-six years ago; another life in the same lease dropped fifty-five years ago, and the remaining life in the same lease dropped twenty-six years ago. In the lease of the 28th August, 1855, a life dropped forty-nine years ago; another life in the same lease dropped twenty-six years ago, and the last life dropped four years age.
I consider that I am in this case bound by the decision of the Court of Appeal in Allen v. Murphy (1). No doubt in that case a renewal of the lease had actually been granted to the lessee by the tenant for life; but Lord Justice Ronan’s judgment seems to lay down the principles which bind me in the present case. At p. 491 he says: “Where no time is fixed by the lease for applying for the renewal, where no notice has been served by the landlord calling upon the tenant to elect whether he will ask for a renewal or not, and where everything has gone on as if a renewal had been taken out, the reasonable presumption is that the parties had agreed to let the technicality of renewal lie over, and that neither party had any intention of raising any question as to the forfeiture of the tenant’s rights.” In the present case there is no time fixed by the lease for applying for the renewal, no notice has been served by the landlord calling on the tenant to elect whether he will ask for a new life to be nominated, there is no renewal fine to be paid, and nothing to cause any loss to the lessor.
I think it is difficult to distinguish the present case from the case under review, and I feel bound to apply the decision to the present case and to follow it, and to hold that delay in the case, although a very prolonged one, has not disentitled the lessee to have lives nominated by the lessor in the place of the lives which have dropped, and that there is therefore an equitable freehold in the lands comprised in the leases.
Patrick J. Carr v Josephine Phelan
1973 No. 2361 P and 1976 No. 50 Sp
High Court
18 June 1976
[1976-7] I.L.R.M. 149
(Hamilton J)
18 June 1976
HAMILTON J
delivered his judgment on 18 June 1976 saying: by an indenture of lease made on 10 September 1969 between the defendant of the one part and one Laurence Bolger of the other part the defendant herein demised the premises therein described to the said Laurence Bolger for the term of five years from 1 November 1963 subject to the rent reserved thereby and the covenants and conditions therein contained.
The interest of the said Laurence Bolger in the said lease and the premises thereby demised is now vested in the plaintiff by virtue of a deed of assignment dated 23 March 1970.
It was provided by clause 19 of the said lease that:
The purchaser shall have at all times during the continuance of the lease an option to purchase the fee simple of the portion of the premises occupied by him under the lease and for the purpose of this condition the consideration to be paid shall be the number of years purchase of the rent reserved by the said lease as shall be ascertained under the provisions of the Landlord and Tenant (Ground Rents) Act 1967 as if the rent reserved by the said lease was a ground rent within the meaning of that Act.
*151
The said clause went on to provide that:
Nothing in this condition shall be in any way construed to bring the lease into the provisions of the said Act save for the sole purpose of ascertaining the consideration to be paid by the purchaser in the event of his exercising his option to purchase the freehold of the part of the premises hereby agreed to be leased to him.
On 21 May 1973 during the continuance of the term granted by the said lease the plaintiff’s solicitor wrote to the defendant’s then solicitor informing him that the plaintiff proposed to exercise the option contained in clause 19 of the lease to purchase the fee simple, stating that the purchase money was to be calculated pursuant to the provisions of the Landlord and Tenant (Ground Rents) Act 1967 (hereinafter referred to as the 1967 Act) and asking for the defendant’s then solicitors computation of the purchase money.
By letter dated 26 July 1973 the defendant’s then solicitor wrote to the plaintiff’s solicitor stating that the defendant would not under any circumstances sell the freehold interest in the property.
On 10 September 1973 the plaintiff caused to be issued in this Court the plenary summons claiming a mandatory injunction to compel the defendant to convey to the plaintiff the fee simple interest in the premises situate at Market Square, Bagenalstown in the County of Carlow, which the plaintiff held from the defendant by virtue of the terms of the said lease, together with alternative and ancillary relief.
The statement of claim was delivered on 10 October 1973. No defence was delivered and the plaintiff caused to be issued a motion for judgment in default of defence. A defence was ultimately delivered on behalf of the defendant on 14 May 1975.
In her defence the defendant inter alia pleaded that:
(a) The provision in the said lease referable to the option did not provide or contain a valid or enforceable option.
(b) The alleged option was not enforceable and was null and void by reason of:
(1) Uncertainty, and
(2) The fact that it did not provide any or any certain and ascertainable mode for the determination of the price or the person or persons by whom the same should be determined.
These were the substantive matters of the defence as the other matters pleaded were not persisted with or relied on at the hearing of the action.
On 30 September 1975 the plaintiff purported to served on the defendant a notice under the 1967 Act of his intention to acquire the fee simple in the premises.
*152
On 17 November 1975 the plaintiff’s solicitor issued a notice of motion allegedly in pursuance of the 1967 Act applying to the county registrar for the County of Carlow pursuant to s. 17 of the said Act to determine by his arbitration and award the matters therein set forth and in particular the purchase price of the acquisition of the fee simple and intermediate interests.
It is quite clear, known to the parties, and so expressed in the lease, that the premises were not premises to which the provisions of the 1967 Act applied and the county registrar refused to deal with the application. In my opinion, he acted quite properly in so doing.
On 5 December 1975 the plaintiff’s solicitor wrote to the defendant’s solicitor as follows:
Dear Sir
As you are aware the county registrar for County Carlow declined to embark upon the arbitration in this matter.
We have been advised by counsel that in these circumstances s. 18 of the Arbitration Act 1954 applies and so, in accordance with the provisions of s. 18, we now write you this letter for the purpose of serving upon you a written notice to appoint or concur in the appointment of an arbitrator.
We would suggest by way of arbitrator one of the following persons (subject to his agreeing to act);
(a) Diarmuid Sheridan SC.
(b) John O’Gorman, Carlow.
(c) Michael Donnelly, solicitor, Carlow.
As you are aware under the provisions of the Act you may either concur in the appointment of one of these persons as an arbitrator or, alternatively, if you wish to put forward any names we will consider them. In default of agreeing to the appointment of an arbitrator we will, in accordance with s. 18, apply to the court for the appointment of an arbitrator and will look to your client for the costs of that application.
By letter dated 5 January 1976 the defendant’s solicitor wrote to the plaintiff’s solicitor as follows:
Referring to your letter of 5 December it seems to me that the question must await the result of the High Court proceedings. If my client is successful in these proceedings arbitration won’t arise.
On 5 February 1976 the plaintiff caused to be issued a summons pursuant to the provisions of the Arbitration Act 1954 requesting the court to appoint an arbitrator to act and make an award and determine the consideration to be paid on the purchase of the fee simple in accordance with the provisions of clause 19 of the aforesaid lease. This application was grounded on the affidavit of the plaintiff in which all the relevant facts are recited.
Both the action for specific performance and the application pursuant to the *153 Arbitration Act 1954 were heard by me on the same date and I heard submissions from counsel on behalf of both parties. I adjourned the matter to enable counsel for the defendant to adduce evidence, if he so wished, in relation to the matters pleaded in paragraph 2 of the defence.
At the adjourned hearing, counsel on behalf of the defendant did not avail of such opportunity and I must deal with these matters on the basis of the agreed facts, the documents before me and the submissions made by counsel on behalf of both parties.
With regard to the specific performance action, it is quite clear that there is no contract between the parties unless and until the consideration for the acquisition of the fee simple interest in the premises has been ascertained, the price being of the essence of a contract for sale. It was decided in Milnes v Gery (1807) 14 Ves 400 and Wilkes v Davis (1817) 3 Mer 507 that until the purchase price has been ascertained there is no contract between the parties which the court can specifically enforce. These are admittedly old authorities but the principle enunciated therein is so obvious that no authority is really necessary. Can the purchase price be ascertained in this case?
Clause 19 of the lease provides that:
For the purpose of this condition the consideration to be paid shall be the number of years purchase of the rent reserved by the said lease as shall be ascertained under the provisions of the Landlord and Tenant (Ground Rents) Act 1967 as if the rent reserved by the said lease was a ground rent within the meaning of that Act.
This clause seems to imply that there is some provision in the Landlord and Tenant (Ground Rents) Act 1967 whereby it is provided that the consideration for the acquisition of a fee simple under the said Act is a certain number of years to purchase of the ground rent. This is not so.
S. 18 of the 1967 Act provides that:
Where the purchase price of the fee simple or any other interests in land being acquired under this Act falls to be determined under this Act
(a) the purchase price shall, subject to paragraphs (b) and (c) of this subsection, be the sum, which, in the opinion of the county registrar conducting the arbitration, a willing purchaser would give and a willing vendor would accept for the fee simple or other interest having had regard to,
nine different considerations which are set forth in detail in the subsection.
One of the matters to which the county registrar is obliged to have regard to is
(3) the current interest yields on securities of the Government issued for subscription in the State.
*154
This latter consideration has in all probability led to the development by the county registrars of a rule of thumb whereby they allow so many years purchase of the ground rent as the consideration for the acquisition for a fee simple. It is however only one of nine considerations to which they are obliged to have regard.
Mr Morris has submitted, and I accept his submission, that I am obliged to construe the clause in such a way as to give effect to the intention of the parties if at all possible.
It appears to me to be quite clear that it was the intention of the parties that the consideration for the acquisition of the fee simple in the premises was to be such sum as would be awarded by a county registrar, acting as the arbitrator pursuant to s. 17 of the 1967 Act, as if the rent reserved by the lease was a ground rent within the meaning of the said Act. It is also quite clear to me that it was the intention of the parties, that if agreement was not agreed between the parties that the matter would be referred to the county registrar to have the matter determined by his arbitration in accordance with s. 17 of the 1967 Act.
This is the course which is adopted by the plaintiff in these proceedings by his notice dated 17 November 1975, which is expressed to be an application pursuant to s. 17 of the 1967 Act.
The county registrar declined to act in the matter because the application was not in effect an application under the said section but an application in pursuance of the agreement between the parties.
The country registrar having refused to act, Mr Morris has submitted that the provisions of s. 18 of the Arbitration Act 1954 apply and that I should appoint an arbitrator to act and determine the matter.
S. 18 of the Arbitration Act 1954 provides that:
In any of the following cases
(a) Where
(1) An arbitration agreement provides that the reference shall be to a single arbitrator and
(2) All the parties do not, after differences have arisen, concur in the appointment of an arbitrator.
(b) If
(1) An appointed arbitrator refuses to act, or is incapable of acting or dies, and
(2) The arbitration agreement does not show that it was intended that the vacancy should not be supplied, and
(3) The parties do not supply the vacancy.
The following provisions shall have effect.
(1) Any party may serve the other parties or the arbitrators, as the case may be, *155 with a written notice to appoint or as the case may be concur in appointing an arbitrator, umpire or a third arbitrator,
(2) If the appointment is not made within seven clear days after the service of the notice, the court may, on the application of the party who gave the notice, appoint an arbitrator, umpire or third arbitrator who shall have the like powers to act in the reference and make an award as if he had been appointed by consent of all parties.
In my opinion the section does not apply to the circumstances of this case. This agreement did not as such constitute an arbitration agreement and did not appoint an arbitrator. What it did do was to specify the manner in which the consideration and the purchase price was to be ascertained namely under the provisions of the 1967 Act as if the rent reserved by the lease was a ground rent within the meaning of the 1967 Act.
The 1967 Act does however provide for the determination of certain matters by the county registrar in accordance with the provisions of s. 17 but this only arises when the Act applies.
In the circumstances which have happened the provisions of the 1967 Act do not apply to this case and they cannot be applied to the ascertainment of the consideration or purchase price for the acquisition of the fee simple. If I were to appoint an arbitrator as urged for by Mr Morris, I would be substituting a completely different mode of ascertaining the purchase price to that envisaged or intended by the parties and this I am not empowered to do.
As stated by the then Master of the Rolls in Milnes v Gery 14 Ves 400, 406–407:
The only Agreement, into which the Defendant entered, was to purchase at a Price, to be ascertained in a specified Mode. No Price having ever been fixed in that Mode, the Parties have not agreed upon any Price. Where then is the compleat and concluded Contract, which this Court is called upon to execute? The Price is of the Essence of a Contract of Sale. In this Instance the Parties have agreed upon a particular Mode of ascertaining the Price. The Agreement, that the Price shall be fixed in one specific Manner, certainly does not afford an Inference, that it is wholly indifferent, in what Manner it is to be fixed. The court, declaring, that the one shall take, and the other shall give, a Price, fixed in any other Manner, does not execute any Agreement of their’s; but makes an Agreement for them; upon a Notion, that it may be as advantageous as that, which they made for themselves. How can a Man be forced to transfer to a Stranger that Confidence, which upon a Subject, materially interesting to him, he has reposed in an Individual of his own Selection.
These views, expressed many years ago, I find acceptable and adopt. I am satisfied that it was the intention of the parties that the price should be ascertained under the provisions of the 1967 Act and the parties thereto must be presumed to have been aware of its provisions.
S. 22(1) provides that: *156
An appeal shall lie to the court against an award, order or other decision of a county registrar in an arbitration under this Act.
This means that if a party were aggrieved by the decision of the county registrar, he had the right to appeal from such decision to the Circuit Court and subsequently to the High Court from the decision of the Circuit Court.
No such appeal lies to any court under the Arbitration Act 1954. If I were to appoint an arbitrator under the Arbitration Act 1954, the parties would not have the same rights as they would have if the matter had been determined under the provisions of the 1967 Act as was clearly their intention. Consequently I must dismiss the application under s. 18 of the Arbitration Act 1954 and the plaintiff’s action for specific performance, being satisfied for the reasons already given that there is no concluded agreement which I am entitled to enforce.
Patrick J. Carr v Josephine Phelan
1973 No. 2361 P and 1976 No. 50 Sp
High Court
18 June 1976
[1976-7] I.L.R.M. 149
(Hamilton J)
18 June 1976
Subject: Landlord and tenant Other related subjects: Arbitration
K
HAMILTON J
delivered his judgment on 18 June 1976 saying: by an indenture of lease made on 10 September 1969 between the defendant of the one part and one Laurence Bolger of the other part the defendant herein demised the premises therein described to the said Laurence Bolger for the term of five years from 1 November 1963 subject to the rent reserved thereby and the covenants and conditions therein contained.
The interest of the said Laurence Bolger in the said lease and the premises thereby demised is now vested in the plaintiff by virtue of a deed of assignment dated 23 March 1970.
It was provided by clause 19 of the said lease that:
The purchaser shall have at all times during the continuance of the lease an option to purchase the fee simple of the portion of the premises occupied by him under the lease and for the purpose of this condition the consideration to be paid shall be the number of years purchase of the rent reserved by the said lease as shall be ascertained under the provisions of the Landlord and Tenant (Ground Rents) Act 1967 as if the rent reserved by the said lease was a ground rent within the meaning of that Act.
*151
The said clause went on to provide that:
Nothing in this condition shall be in any way construed to bring the lease into the provisions of the said Act save for the sole purpose of ascertaining the consideration to be paid by the purchaser in the event of his exercising his option to purchase the freehold of the part of the premises hereby agreed to be leased to him.
On 21 May 1973 during the continuance of the term granted by the said lease the plaintiff’s solicitor wrote to the defendant’s then solicitor informing him that the plaintiff proposed to exercise the option contained in clause 19 of the lease to purchase the fee simple, stating that the purchase money was to be calculated pursuant to the provisions of the Landlord and Tenant (Ground Rents) Act 1967 (hereinafter referred to as the 1967 Act) and asking for the defendant’s then solicitors computation of the purchase money.
By letter dated 26 July 1973 the defendant’s then solicitor wrote to the plaintiff’s solicitor stating that the defendant would not under any circumstances sell the freehold interest in the property.
On 10 September 1973 the plaintiff caused to be issued in this Court the plenary summons claiming a mandatory injunction to compel the defendant to convey to the plaintiff the fee simple interest in the premises situate at Market Square, Bagenalstown in the County of Carlow, which the plaintiff held from the defendant by virtue of the terms of the said lease, together with alternative and ancillary relief.
The statement of claim was delivered on 10 October 1973. No defence was delivered and the plaintiff caused to be issued a motion for judgment in default of defence. A defence was ultimately delivered on behalf of the defendant on 14 May 1975.
In her defence the defendant inter alia pleaded that:
(a) The provision in the said lease referable to the option did not provide or contain a valid or enforceable option.
(b) The alleged option was not enforceable and was null and void by reason of:
(1) Uncertainty, and
(2) The fact that it did not provide any or any certain and ascertainable mode for the determination of the price or the person or persons by whom the same should be determined.
These were the substantive matters of the defence as the other matters pleaded were not persisted with or relied on at the hearing of the action.
On 30 September 1975 the plaintiff purported to served on the defendant a notice under the 1967 Act of his intention to acquire the fee simple in the premises.
*152
On 17 November 1975 the plaintiff’s solicitor issued a notice of motion allegedly in pursuance of the 1967 Act applying to the county registrar for the County of Carlow pursuant to s. 17 of the said Act to determine by his arbitration and award the matters therein set forth and in particular the purchase price of the acquisition of the fee simple and intermediate interests.
It is quite clear, known to the parties, and so expressed in the lease, that the premises were not premises to which the provisions of the 1967 Act applied and the county registrar refused to deal with the application. In my opinion, he acted quite properly in so doing.
On 5 December 1975 the plaintiff’s solicitor wrote to the defendant’s solicitor as follows:
Dear Sir
As you are aware the county registrar for County Carlow declined to embark upon the arbitration in this matter.
We have been advised by counsel that in these circumstances s. 18 of the Arbitration Act 1954 applies and so, in accordance with the provisions of s. 18, we now write you this letter for the purpose of serving upon you a written notice to appoint or concur in the appointment of an arbitrator.
We would suggest by way of arbitrator one of the following persons (subject to his agreeing to act);
(a) Diarmuid Sheridan SC.
(b) John O’Gorman, Carlow.
(c) Michael Donnelly, solicitor, Carlow.
As you are aware under the provisions of the Act you may either concur in the appointment of one of these persons as an arbitrator or, alternatively, if you wish to put forward any names we will consider them. In default of agreeing to the appointment of an arbitrator we will, in accordance with s. 18, apply to the court for the appointment of an arbitrator and will look to your client for the costs of that application.
By letter dated 5 January 1976 the defendant’s solicitor wrote to the plaintiff’s solicitor as follows:
Referring to your letter of 5 December it seems to me that the question must await the result of the High Court proceedings. If my client is successful in these proceedings arbitration won’t arise.
On 5 February 1976 the plaintiff caused to be issued a summons pursuant to the provisions of the Arbitration Act 1954 requesting the court to appoint an arbitrator to act and make an award and determine the consideration to be paid on the purchase of the fee simple in accordance with the provisions of clause 19 of the aforesaid lease. This application was grounded on the affidavit of the plaintiff in which all the relevant facts are recited.
Both the action for specific performance and the application pursuant to the *153 Arbitration Act 1954 were heard by me on the same date and I heard submissions from counsel on behalf of both parties. I adjourned the matter to enable counsel for the defendant to adduce evidence, if he so wished, in relation to the matters pleaded in paragraph 2 of the defence.
At the adjourned hearing, counsel on behalf of the defendant did not avail of such opportunity and I must deal with these matters on the basis of the agreed facts, the documents before me and the submissions made by counsel on behalf of both parties.
With regard to the specific performance action, it is quite clear that there is no contract between the parties unless and until the consideration for the acquisition of the fee simple interest in the premises has been ascertained, the price being of the essence of a contract for sale. It was decided in Milnes v Gery (1807) 14 Ves 400 and Wilkes v Davis (1817) 3 Mer 507 that until the purchase price has been ascertained there is no contract between the parties which the court can specifically enforce. These are admittedly old authorities but the principle enunciated therein is so obvious that no authority is really necessary. Can the purchase price be ascertained in this case?
Clause 19 of the lease provides that:
For the purpose of this condition the consideration to be paid shall be the number of years purchase of the rent reserved by the said lease as shall be ascertained under the provisions of the Landlord and Tenant (Ground Rents) Act 1967 as if the rent reserved by the said lease was a ground rent within the meaning of that Act.
This clause seems to imply that there is some provision in the Landlord and Tenant (Ground Rents) Act 1967 whereby it is provided that the consideration for the acquisition of a fee simple under the said Act is a certain number of years to purchase of the ground rent. This is not so.
S. 18 of the 1967 Act provides that:
Where the purchase price of the fee simple or any other interests in land being acquired under this Act falls to be determined under this Act
(a) the purchase price shall, subject to paragraphs (b) and (c) of this subsection, be the sum, which, in the opinion of the county registrar conducting the arbitration, a willing purchaser would give and a willing vendor would accept for the fee simple or other interest having had regard to,
nine different considerations which are set forth in detail in the subsection.
One of the matters to which the county registrar is obliged to have regard to is
(3) the current interest yields on securities of the Government issued for subscription in the State.
*154
This latter consideration has in all probability led to the development by the county registrars of a rule of thumb whereby they allow so many years purchase of the ground rent as the consideration for the acquisition for a fee simple. It is however only one of nine considerations to which they are obliged to have regard.
Mr Morris has submitted, and I accept his submission, that I am obliged to construe the clause in such a way as to give effect to the intention of the parties if at all possible.
It appears to me to be quite clear that it was the intention of the parties that the consideration for the acquisition of the fee simple in the premises was to be such sum as would be awarded by a county registrar, acting as the arbitrator pursuant to s. 17 of the 1967 Act, as if the rent reserved by the lease was a ground rent within the meaning of the said Act. It is also quite clear to me that it was the intention of the parties, that if agreement was not agreed between the parties that the matter would be referred to the county registrar to have the matter determined by his arbitration in accordance with s. 17 of the 1967 Act.
This is the course which is adopted by the plaintiff in these proceedings by his notice dated 17 November 1975, which is expressed to be an application pursuant to s. 17 of the 1967 Act.
The county registrar declined to act in the matter because the application was not in effect an application under the said section but an application in pursuance of the agreement between the parties.
The country registrar having refused to act, Mr Morris has submitted that the provisions of s. 18 of the Arbitration Act 1954 apply and that I should appoint an arbitrator to act and determine the matter.
S. 18 of the Arbitration Act 1954 provides that:
In any of the following cases
(a) Where
(1) An arbitration agreement provides that the reference shall be to a single arbitrator and
(2) All the parties do not, after differences have arisen, concur in the appointment of an arbitrator.
(b) If
(1) An appointed arbitrator refuses to act, or is incapable of acting or dies, and
(2) The arbitration agreement does not show that it was intended that the vacancy should not be supplied, and
(3) The parties do not supply the vacancy.
The following provisions shall have effect.
(1) Any party may serve the other parties or the arbitrators, as the case may be, *155 with a written notice to appoint or as the case may be concur in appointing an arbitrator, umpire or a third arbitrator,
(2) If the appointment is not made within seven clear days after the service of the notice, the court may, on the application of the party who gave the notice, appoint an arbitrator, umpire or third arbitrator who shall have the like powers to act in the reference and make an award as if he had been appointed by consent of all parties.
In my opinion the section does not apply to the circumstances of this case. This agreement did not as such constitute an arbitration agreement and did not appoint an arbitrator. What it did do was to specify the manner in which the consideration and the purchase price was to be ascertained namely under the provisions of the 1967 Act as if the rent reserved by the lease was a ground rent within the meaning of the 1967 Act.
The 1967 Act does however provide for the determination of certain matters by the county registrar in accordance with the provisions of s. 17 but this only arises when the Act applies.
In the circumstances which have happened the provisions of the 1967 Act do not apply to this case and they cannot be applied to the ascertainment of the consideration or purchase price for the acquisition of the fee simple. If I were to appoint an arbitrator as urged for by Mr Morris, I would be substituting a completely different mode of ascertaining the purchase price to that envisaged or intended by the parties and this I am not empowered to do.
As stated by the then Master of the Rolls in Milnes v Gery 14 Ves 400, 406–407:
The only Agreement, into which the Defendant entered, was to purchase at a Price, to be ascertained in a specified Mode. No Price having ever been fixed in that Mode, the Parties have not agreed upon any Price. Where then is the compleat and concluded Contract, which this Court is called upon to execute? The Price is of the Essence of a Contract of Sale. In this Instance the Parties have agreed upon a particular Mode of ascertaining the Price. The Agreement, that the Price shall be fixed in one specific Manner, certainly does not afford an Inference, that it is wholly indifferent, in what Manner it is to be fixed. The court, declaring, that the one shall take, and the other shall give, a Price, fixed in any other Manner, does not execute any Agreement of their’s; but makes an Agreement for them; upon a Notion, that it may be as advantageous as that, which they made for themselves. How can a Man be forced to transfer to a Stranger that Confidence, which upon a Subject, materially interesting to him, he has reposed in an Individual of his own Selection.
These views, expressed many years ago, I find acceptable and adopt. I am satisfied that it was the intention of the parties that the price should be ascertained under the provisions of the 1967 Act and the parties thereto must be presumed to have been aware of its provisions.
S. 22(1) provides that: *156
An appeal shall lie to the court against an award, order or other decision of a county registrar in an arbitration under this Act.
This means that if a party were aggrieved by the decision of the county registrar, he had the right to appeal from such decision to the Circuit Court and subsequently to the High Court from the decision of the Circuit Court.
No such appeal lies to any court under the Arbitration Act 1954. If I were to appoint an arbitrator under the Arbitration Act 1954, the parties would not have the same rights as they would have if the matter had been determined under the provisions of the 1967 Act as was clearly their intention. Consequently I must dismiss the application under s. 18 of the Arbitration Act 1954 and the plaintiff’s action for specific performance, being satisfied for the reasons already given that there is no concluded agreement which I am entitled to enforce.