Cunnane, Ag v Shannon Foynes Port Company
| Jurisdiction | Ireland |
| Judge | Finnegan P. |
| Judgment Date | 07 March 2003 |
| Neutral Citation | [2003] IEHC 615 |
| Court | High Court |
| Date | 07 March 2003 |
[2003] IEHC 615
THE HIGH COURT
BETWEEN
AND
Citations:
HARBOURS ACT 1996 S15(2)
HARBOURS ACT 1996 S43
HARBOURS (AMDT) ACT 2000 S1
TRANSFER OF FUNCTIONS OF FOYNES PROT COMPANY & SHANNON ESTUARY PORTS COMPANY ORDER 2000 SI 283/2000
HARBOURS ACT 1996 S12(1)
HARBOURS ACT 1996 S12(2)
HARBOURS ACT 1996 S15(1)
HARBOURS ACT 1996 S15(3)
HARBOURS ACT 1996 S15(4)
HARBOURS ACT 1996 S44(1)
HARBOURS ACT 1996 S44(2)
HARBOURS ACT 1996 S44(3)
HARBOURS ACT 1996 S12(1)(D)
HARBOURS ACT 1996 S44
HOLOHAN V FRIENDS PROVIDENT & CENTURY LIFE OFFICE 1966 IR 1
EDENFELL HOLDINGS LTD, RE 1999 1 IR 443
INLAND REVENUE CMRS V CLAY 1914 3 KB 466
ELLESMERE CMRS OF INLAND REVENUE 1918 2 KB 735
THOMKINS & ANOR V COMMISSION FOR THE NEW TOWNS 1989 1 EGLR 24
R V ESSEX COUNTY COUNCIL EX PARTE CLEARBROOK CONTRACTORS LTD UNREP QB 3/4/1981
VAN HOOL MCARDLEV ROHAN INDUSTRIAL ESTATES LTD & ANOR 1980 IR 327
BANQUE BRUXELLES LAMBERT SA V EAGLE STAR INSURANCE COMPANY LTD & ORS 1995 2 AER 769
BUTTLE & ORS V SAUNDERS & ANOR 1952 AER 193
GLENCAR EXPLORATION PLC V MAYO CO COUNCIL 2002 1 IR 85
PORTER V MCGILL 2002 2 AC 357
VISCOUNT GORT & ORS V AG 3 ER 1424
HL & AG V MAYOR ALDERMAN BURGESSES OF THE BOROUGH OF BELFAST & ORS 1855 CH 119
Synopsis:
SALE OF LAND
Contract
Sale of land - Setting side - Whether agreement for sale ought to be set aside - Whether defendant complied with statutory obligations - Whether defendant under obligation to sell on open market - Public procurement - Harbours Act 1996 (2001/9260P - Finnegan P - 7/3/2003)
Attorney General v Shannon Foynes Port Company
The relator occupied a portion of the defendant’s premises at Foynes. The defendant agreed to sell the premises to a third party. The relator sought an order setting aside the agreement on grounds that the defendant was obliged to offer the premises for sale on the open market when the relator would bid for the same.
Held by Finnegan P. in dismissing the relator’s claim that the sale was in accordance with the statutory requirements. The defendant was under no obligation to sell the premises on the open market.
Finnegan P. delivered on the 7th day of March 2003
This action concerns the sale of premises Aras Ide, Foynes, Co. Limerick ("the premises"). The Relator occupies a portion of the premises as tenant to the Defendant and has done so from the 1 st November 1993 under a series of short term lettings from the Defendant's predecessors in title the Foynes Port Trustees and Foynes Port Company. His original take was two rooms but within one year this was increased to three rooms and then to four rooms. These have now been occupied under a lease for a term of three years from 1 st July 1999 at a rent of £1,000 per annum. As to the remainder of the premises portion was occupied by the Defendant and other portions under short leases - a doctor, SIPTU, an Irish College, a hair salon, an accountant, an offshore supply company. Other portions were occupied rent free by Customs and Excise and Alcoholics Anonymous. The offshore supply company also occupied part of the premises being a bonded warehouse again on short lease. Finally portion of the premises was occupied by Foynes Flying Boat Museum ("the museum") for a term of 21 years from 1988 at a rent of £1,000 per annum to subject to reviews no reviews having in fact been imposed. The premises were originally an hotel and then the terminal for transatlantic flying boats and housed the Shannon Hotel School.
By agreement in writing dated the 11 th May 2001 the Defendant agreed with the museum for the sale to it of the premises for the sum of £250,000. The premises were not marketed in that they were not advertised, or offered for sale by tender, by auction or by private treaty.
The relief sought by the Relator is to have the agreement for sale to the museum set aside and the premises offered for sale on the open market when it would be his intention to bid for the same. The grounds upon which he seeks that relief may be summarised as follows-
(1) The Harbours Act 1996section 15(2) requires the Defendant to go to the open market on the sale of its property.
(2) The Defendant is obliged to comply with Government policy on good governance which requires a sale on the open market.
(3) The sale price is less than open market value.
(4) The Defendant in selling its property is in the position of a trustee and in relation to the sale of its property has the obligations of a trustee which obligations require a sale on the open market.
By way of further background the premises were originally held by Foynes Harbour Trustees. Foynes Port Company was incorporated pursuant to the provisions of the Harbours Act 1996and succeeded Foynes Harbour Trustees. Pursuant to the Harbours Act 1996section 43 as inserted by the Harbours (Amendment) Act 2000section 1 the functions of Foynes Port Company and Shannon Estuary Ports Company were transferred to the Defendant by the Transfer of Functions of Foynes Port Company and Shannon Estuary Ports Company Order 2000 ( S.I.283/2000) effective on the 18 th September 2000.
While the decision to sell the premises was taken by the Defendant discussions in relation to the sale spanned the periods during which Foynes Port Company and the Defendant owned the premises. Minutes of meetings of the Board of Directors of Foynes Port Company disclose the following. At the meeting of the 21 st September 1999 it was recorded that the Chief Executive had received a verbal approach from the museum to purchase the premises. There had been several previous approaches. The decision was made to obtain a valuation of the premises and to ascertain the cost of providing alternative accommodation in the event of a sale. The minutes of a meeting of the Directors held on the 16 th November 1999 records the following-
"The Chief Executive stated that De Courcy's completed a valuation on the entire harbour office building, and they submitted a low valuation. The Chairman suggested that the Chief Executive clarifies the situation with De Courcy's and also do a comparison between the valuation and a former valuation done in connection with our assets valuation".
The asset valuation referred to was as of the 26 th November 1996 and valued the "service buildings, offices, stores, canteens etc., constructed over the past twenty five years" at £500,000. While this item it would appear included other small buildings such as offices on the east jetty, an office on the west jetty, a further office and an office and garage totalling in area some 3,000 square feet in all it did not include the warehouse which is part of the premises which also comprises 3,000 square feet: the evidence was that accordingly the valuation of £500,000 under this heading represented the value of the premises. The valuation was not carried out by a valuer but rather by the then Chief Executive of the Trustees, Mr. O'Malley, and the Trustees engineer, Mr. Murphy. The valuation was arrived at by applying a value of £25 per square foot to the total area of 20,000 square feet. The figure of £25 per square foot was provided by Mr. O'Malley and he derived this figure from the cost to him of a dwelling house which he purchased in Foynes some time previously. The asset valuation was required for the purposes of ascertaining the nominal value of shares to be allotted to the Minister in Foynes Port Company pursuant to the Harbours Act 1996section 19.
The minutes of a meeting of the Board of Directors held on the 25 th November 1999 disclose the following. The museum had available to it £200,000 - £250,000 by way of Government grant but had to take up this money before the end of 1999 or otherwise it would go back to the exchequer. Representations on behalf of the museum had been received from Shannon Development: in the course of evidence I was given no information as to these representations. The Chief Executive informed the Board that the low valuation put on the premises by De Courcy's had been influenced by the low rental income from the premises.
The next meeting of the Board of Directors was on the 21 stDecember 1999 and a proposal from the museum to purchase the premises was presented by the Chief Executive. The Board agreed to discuss the sale of part or all of the premises to the museum. The museum in a letter to the Chief Executive had stated that existing agreements with tenants would be honoured. At the next meeting of the Board of Directors held on the 25 th January 2000 a sub-committee was appointed to meet with a sub-committee from the museum. A meeting did indeed take place but the sub-committee did not report back to the Board. At the meeting with the museum sub-committee Mr. Sheahan a member of the Foynes Port Company sub-committee suggested a price of £400,000: this sum Mr. Sheahan told me in evidence was the cost of new custom designed premises for Galway Harbour Company and was his estimate of the cost of new premises for Foynes Port Company rather than a valuation of the premises.
The Implementation Board of the Defendant met on the 27 thOctober 2000. The minute of that meeting records as follows:-
An option to sell the Foynes Port Company building is now open to the Flying Boat Museum people who are supported by the Minister for Arts etc. An offer of £250,000 is being made for the building and the Department of Arts are keen for movement. Councillor Sheahan recommended an independent valuation of the property, and some tough negotiations if the company is to sell offices in Foynes. Mr. Moran of J.L. La S, (Jones Lang Lasalle) above will be requested to provide same.
The Implementation Board again met on the 16 th November...
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