Doyle v Kildare County Council

JurisdictionIreland
Judgment Date01 January 1996
Date01 January 1996
Docket Number[S.C. Nos. 75, 84, 104 and 126 of 1994]
CourtSupreme Court

High Court

Supreme Court

[S.C. Nos. 75, 84, 104 and 126 of 1994]
Doyle v. Kildare County Council
In the matter of the Arbitration Acts, 1954 and 1980, and in the matter of the Kildare County Council (Kilcullen Link) Motorway Scheme, 1987 Thomas Doyle and Elaine Doyle
Plaintiffs
and
The County Council of the County of Kildare and John R. Shackleton
Defendants

Cases mentioned in this report:—

Anheuser Busch Inc. v. Controller of Patents, Designs and Trade Marks [1987] I.R. 329; [1988] I.L.R.M. 247.

Hogan v. St. Kevin's Company [1986] I.R. 80; [1987] I.L.R.M. 17.

Keenan v. Shield Insurance Co. Ltd. [1988] I.R. 89.

McStay v. Assicurazioni Generali SPA [1989] I.R. 248; [1991] I.L.R.M. 237.

Point Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendant of Crown Lands [1947] A.C. 565; 63 T.L.R. 486.

Power Securities Ltd. v. Daly (Unreported, High Court, Murphy J., 27th February, 1984).

State (Creedon) v. Criminal Injuries Compensation Tribunal [1988] I.R. 51.

State (Keegan and Lysaght) v. Stardust Compensation Tribunal[1986] I.R. 642; [1987] I.L.R.M. 202.

Sharpe (P. & F.) Ltd. v. Dublin City and County Manager [1989] I.R. 701; [1989] I.L.R.M. 565.

Arbitration - Award for compulsorily acquired lands - Plaintiff dissatisfied with award - No reasons given for decision - Challenge on grounds of irrationality and failure to consider residual value of affected land - Whether court having jurisdiction to set aside award where award reflecting error of mathematical computation - Rules of the Superior Courts, 1986 (S.I. No. 15), O. 56, rule 4 (e) - Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c. 57), s. 6 - Arbitration Act, 1954 (No. 26), ss. 36, 37 and 38.

Natural justice (High Court) - Property arbitration - Whether obligation to give reasons for decision when award challenged - Whether matter should be remitted or re-heard by new arbitrator - Whether justice seen to be done - Rules of the Superior Courts, 1986 (S.I. No. 15), O. 56, r. 4 (e) - Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c. 57), s. 6 - Arbitration Act, 1954 (No. 26), ss. 36, 37 and 38.

Practice and procedure - Jurisdiction of High Court to set aside award of property arbitrator under statute and at common law - Rules of the Superior Courts, 1986 (S.I. No. 15), O. 56, r. 4 (e) - Acquisition of Land (Assessment of Compensation) Act, 1919 (9 & 10 Geo. 5, c. 57), s. 6 - Arbitration Act, 1954 (No. 26), ss. 36, 37 and 38.

Special summons.

The facts have been summarised in the headnote and are fully set out in the judgment of Hamilton C.J. infra.

By special summons dated the 17th October, 1991, the plaintiffs sought an order setting aside the award of the second defendant.

The action was heard by the High Court (Flood J.) on the 22nd, 26th and 27th October, 1993.

The defendants appealed the judgment and order of the High Court by notices of appeal on the 3rd and 8th March, 1995. The plaintiff cross-appealed by notice of appeal dated the 11th March, 1995.

The appeals were heard by the Supreme Court (Hamilton C.J., O'Flaherty and Denham JJ.) on the 25th and 26th October, 1995.

Section 36, sub-s. 1 of the Arbitration Act, 1954, provides:—

"In all cases of reference to arbitration, the Court may from time to time remit the matters referred or any of them to the reconsideration of the arbitrator or umpire."

Section 38, sub-s. 1 of the Act of 1954 provides:—

"Where —

(a) an arbitrator or umpire has misconducted himself or the proceedings, or

(b) an arbitration or award has been improperly procured, the Court may set the award aside."

The plaintiffs owned lands part of which were used for the extraction of sand and gravel. The first defendant the County Council, made a compulsory purchase order the effect of which was to sever and sterilise the quarry from the remainder of the plaintiffs' lands. The parties failed to agree a sum for compensation and the matter was referred to arbitation. The plaintiffs' evidence was that their loss amounted to £1,377,010. The first defendant's figure was £125,000. The arbitrator, the second defendant, made an award of £106,000. No reason was offered to explain how the award was made. Neither party had complained of irregularity during the arbitration or requested that a case be stated to the High Court.

The plaintiffs applied to the High Court seeking to have the second defendant's award set aside. The grounds of challenge were that the award was so perverse as to be irrational or was patently erroneous in that it failed to take account of two items of compensatable value.

Held by Flood J., in ordering the award to be set aside and the matter to be submitted to another arbitrator, 1, that the arbitrator's award was not irrational or perverse given the evidence that was before him and the ambit of his discretion.

Sharpe (P. & F.) Ltd. v. Dublin City and County Manager [1989] I.R. 701; andState (Keegan and Lysaght) v. Stardust Compensation Tribunal[1986] I.R. 642considered.

Dicta: The court was entitled to look at the evidence from which the arbitrator derived his decision, not for the purpose of in any way enquiring into the merits of the case but solely to ascertain whether there was a valid evidential base to ground the award having regard to the evidence tendered to the arbitrator.

2. That there was prima facie evidence of an inconsistent basis of calculation of the market value of certain parts of the affected lands which rendered the mathematical computation of the arbitrator's award invalid.

3. Given the second defendant's view that he was under no obligation to give reasons for his award even when it had been subjected to bona fide challenge, it was appropriate, in order to ensure that justice be seen to be done, that a new arbitrator be appointed to re-hear the dispute rather than remit the matter to the second defendant for reconsideration.

State (Creedon) v. Criminal Injuries Compensation Tribunal [1988] I.R. 51 andAnheuser Busch Inc. v. Controller of Patents, Designs and Trade Marks[1987] I.R. 329 followed.

Dicta: The proposition that a property arbitrator is under no duty or obligation to set forth in his award the reasons for his decision is acceptable insofar as it relates to the initial award but, once that award is impugned on a bona fide basis, as is shown by the bringing of proceedings, there is a clear obligation to furnish reasons.

On appeal by all parties it was

Held by the Supreme Court (Hamilton C.J., O'Flaherty and Denham JJ.), in allowing the appeal, 1, that the trial judge was correct in holding that the decision of the arbitrator was neither irrational nor perverse.

2. That the trial judge had no statutory jurisdiction to set aside the award of the second defendant under the Arbitration Act, 1954, in the absence of a finding that he had misconducted himself or the arbitration as envisaged by s. 38, sub-s. 1 of the Act.

3. That the trial judge did not have proper grounds for invoking the jurisdiction at common law which permits the setting aside of an arbitrator's award where a fundamental error of law appeared on its face.

Per curiam: Subject to recognised exceptions, it is desirable, as a matter of policy, that the courts should respect the finality of arbitration awards.

McStay v. Assicurazioni Generali SPA [1989] I.R. 248; Power Securities Ltd. v. Daly (Unreported, High Court, Murphy J., 27th February, 1984) and Keenan v. Shield Insurance Co. Ltd.[1988] I.R. 89 approved.

Cur. adv. vult.

Flood J.

20th January, 1994

The claim

The plaintiffs' claim in this matter is for an order setting aside an arbitration award of the second defendant dated the 26th July, 1991, pursuant to the provisions of O. 56, r. 4 (e) of the Rules of the Superior Courts, 1986.

The relief sought is a discretionary relief. It has a statutory basis in part in the provisions of ss. 36, 37 and 38 of the Arbitration Act, 1954. In addition the courts have a supervisory power to set aside or remit an award where the justice of the case so demands. The approach of the courts to an application of this kind is epitomised by the statement of McCarthy J. in Keenan v. Shield Insurance Co. Ltd. [1988] I.R. 89 at page 96:—

"Arbitration is a significant feature of modem commercial life; there is an International Institute of Arbitration and the field of international arbitration is an ever expanding one. It ill becomes the courts to show any readiness to interfere in such a process; if policy considerations are appropriate, as I believe they are in a matter of this kind, then every such consideration points to the desirability of making an arbitration award final in every sense of the term."

The award in this case was in very simple terms "I do find, award and determine the compensation to be paid by the acquiring authority to the claimants for their freehold interest in the schedule land is the sum of £106,000 . . ." This form of award is in common use but is clearly quite uninformative to the claimant or other persons concerned of the basis upon which it is made.

The circumstances underlying this award are briefly these. The plaintiffs acquired the lands by purchase in or about 1978. They comprise a residential holding of some twenty acres. The plaintiffs obtained planning permission from An Bord Pleanála for development, comprising the extraction of sand and gravel from the said land for a period of three years from the date of the order, unless before that date permission for its continuation was granted by the planning authority or An Bord Pleanála on appeal. Pursuant to the said permission the plaintiffs operated a sand and gravel pit for the duration of the said permission and in fact continued to operate the sand and gravel business from 1984 to 1986.

Some correspondence took place with the Kildare County Council, the first defendant, with a view to extending the said permission but this application...

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