Comyn v Attorney General

• Jurisdiction: Ireland
• Court: Supreme Court
• Judgment Date: 29 June 1950
• Docket Number: (1947. No. 124 P.)
• Date: 29 June 1950

Supreme Court

(1947. No. 124 P.)

Comyn v. Attorney General

MICHAEL COMYN

Plaintiff

and

THE ATTORNEY GENERAL

Defendant.

Constitutional law - Emergency legislation - Compulsory acquisition of property - Compensation - Compulsory acquisition by the State by Emergency Powers Order of mining rights formerly demised by Ministers of Government - Whether such acquisition constitutes an acquisition by a "Government Department" under Acquisition of Land (Assessment of Compensation) Act, 1919, s. 1, sub-s. 1 - Assessment of compensation - Procedure - Whether compensation to be assessed by Referee under Acquisition of Land (Assessment of Compensation) Act, 1919, or by a Judge of the High Court - The Constitution, Article 50 - Constitution of the Irish Free State (Saorstát Éireann éireann) Act, 1922 (No. 1 of 1922), Sch. I, Article 73 - Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c.57), s. 1, sub-s. 1 - Emergency Powers Act, 1939 (No. 28 of 1939), s. 2,sub-s; 2 (g) - Emergency Powers (No. 144) Order, 1942 (Stat. R. & Or.,1942, No. 31).

Plenary Summons.

By indenture of lease, dated the 22nd December, 1939, made between the Minister for Industry and Commerce, of the first part, the Minister for Finance, of the second part, and the plaintiff, of the third part, there was demised to the plaintiff, for the term of 49 years, "all the exclusive right of mining and taking minerals and digging and searching for minerals vested in Saorstát Éireann éireann under sub-section 5 of section 45 of the Land Act, 1923 (subject as in the said section as amended by the Mines and Minerals Act, 1931, is provided) in, on, or under the lands" specified in a schedule to the said indenture, with certain exceptions, in consideration of the rent and covenants on the part of the plaintiff contained in the lease.

The lands contained valuable deposits of phosphatic limestone, and the plaintiff, already in possession under a prospecting lease, developed mining operations by way of open-cast workings. In the year, 1942, the Government desired to resume the demised rights, and, by the Emergency Powers (No. 144) Order, 1942, provided for the compulsory acquisition by the State of the mining rights in almost the entire of the lands comprised in the said lease.

On the 24th January, 1947, the plaintiff instituted proceedings against the Attorney General claiming 1, a declaration that he was entitled to be paid compensation by the Government for loss and damage sustained by him by reason of the compulsory acquisition by the State of his mining rights in the lands to which the said Emergency Powers Order referred, and 2, an inquiry for the purpose of assessing such compensation. By his defence, the defendant pleaded,inter alia, that the property acquired under the said Emergency Powers Order was an interest in land acquired compulsorily by a Government Department or public authority and that accordingly any compensation payable to the plaintiff should be ascertained in accordance with the provisions of the Acquisition of Land (Assessment of Compensation) Act, 1919.

On the 26th July, 1948, the defendant applied to the Court for an order pursuant to Or. XXV, r. 2, of the Rules of the Supreme Court (Ir.), 1905, that the point of law raised by the defendant in his defence (viz., whether the property compulsorily acquired from the plaintiff by Emergency Powers Order (No. 144), 1942, was an interest in land acquired compulsorily by a Government Department, and whether by reason thereof any compensation payable to the plaintiff was to be ascertained in accordance with the provisions of the said Act of 1919) should be set down for hearing and disposed of before the trial of the action. The plaintiff by his counsel having given an undertaking that any questions of law that might arise would be argued at the trial and disposed of before the taking of oral evidence, the Court made no order on the motion. Subsequently, in the course of the hearing of oral evidence Kingsmill Moore J. intimated that he would hear argument and give his decision upon the point of law before hearing evidence bearing solely upon the quantum. of compensation.

From this judgment the Attorney General appealed to the Supreme Court (2).

The case was, therefore, reinstated in the High Court for the assessment of compensation.

In the year 1939, the Minister for Industry and Commerce and the Minister for Finance on behalf of the Government demised to the plaintiff by way of lease the exclusive mining rights in certain lands for the term of 49 years subject to the covenants contained in the lease. In that year 1942, when the plaintiff was developing mining operations by open-cast workings, the Government desired to resume the demised rights and, pursuant to the provisions of s. 2, sub-s. 2(g) of the Emergency Powers Act, 1939, by Emergency Powers (No. 144) Order, 1942, compulsorily acquired the said rights in almost the entire of the lands. The plaintiff thereupon instituted proceedings claiming 1, a declaration that he was entitled to compensation for loss and damage resulting from the compulsory acquisition of his rights, and 2, an inquiry for the purpose of assessing such compensation. It was conceded at the trial that the plaintiff was entitled to payment of compensation, but it was contended by the defendant that such compensation should be assessed under the provisions of the Acquisition of Land (Assessment of Compensation) Act, 1919, s. 1, sub-s. 1, and not by a Judge of the High Court.

Held by Kingsmill Moore J. (and affirmed, on appeal, by the Supreme Court) that the acquisition of the plaintiff's rights had been made by the State as a juristic person capable of holding property, and not by a"Government Department," within the meaning of s. 1, sub-s. 1, of the Act of 1919.

He accordingly granted the declaration sought, and directed that an inquiry for the purpose of assessing compensation should be held before a Judge of the High Court.

On the further hearing before the High Court to assess compensation, it was held by Kingsmill Moore J.:—

(1) That compensation for the acquisition of the plaintiff's rights should be computed on the basis of their value to the plaintiff at the date of the acquisition.

(2) The basis of compensation at common law for a compulsory acquisition of property is the value of the property to the owner as it existed at the date of the acquisition, including the then value of all advantages (present or future) which the property possesses, but excluding any increase of value which is attributable to the carrying out of the purpose for which the acquisition is made.

(3) In assessing the value of the property to the owner at the date of acquisition the Court is entitled to consider evidence of the relevant physical facts as they existed at the date of acquisition, even though such evidence is only procured or procurable after such date, and including evidence, if based on such facts;, as to the probability of the rise or fall in price of the property acquired; events which could not have been foreseen at the date of acquisition must be disregarded: Bwllfa and Merthyr Dare Steam Collieries(1891) v. Pontypridd Waterworks Co., [1903] A. C. 426 followed.

(4) On the compulsory acquisition of property by the State, where the compensation is assessed on the basis of a computation of the profits which the owner would have made, the Court must have regard to the fact that income tax would have been deductible from any profits which would have accrued to the owner but for the acquisition, and should deduct from the compensation a sum representing the amount of such income tax as might at the date of the acquisition reasonably have been anticipated as likely to become payable in respect of the earning of such profits.

Cur. adv. vult.

Kingsmill Moore J.:—

By an indenture, dated the 22nd December, 1939, made between the Minister for Industry and Commerce, of the first part, the Minister for Finance, of the second part, and Michael Comyn, then a Judge of the Circuit Court, of the third part, there was demised to Judge Comyn "all the exclusive right of mining and taking minerals and digging and searching for minerals vested in Saorstát Éireann éireann under sub-section 5 of section 45 of the Land Act, 1923 (subject as in the said section, as amended by the Mines and Minerals Act, 1931, is provided) in, on, or under the lands mentioned in the first schedule" to the indenture, with certain exceptions. The term was forty-nine years and the most important consideration was the payment of a royalty of sixpence a ton on all phosphate rock raised or gotten.

The lands consisted of nearly 500 acres in Clare, stretching in a long strip eastwards from the Atlantic, and containing valuable deposits of phosphatic limestone, which could be got in some places by open-cast mining but in other places lay buried at such distance below the surface as to require for their winning the sinking of shafts and construction of galleries.

The lessee, who was already in possession under a two years' prospecting lease, began operations on a moderate scale by way of open-cast workings. Although profits varied from time to time according to the nature of the work in progress, the venture seems to have been remunerative, and, when war cut off supplies of minerals from overseas, the price of the products rose and the lessee looked to be in the way of greater prosperity. From a national point of view, however, the rate of production was inadequate and it seemed desirable to the Government to resume the demised rights and to provide for winning of the phosphates on a larger scale and by new methods.

Accordingly, by the Emergency Powers (No. 144) Order, 1942, made in exercise of the powers conferred by the Emergency Powers Act, 1939, the Government brought about the compulsory acquisition by the State of the mining rights in almost the whole of...