Hogan v St. Kevin's Company

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 01 January 1987
• Neutral Citation: 1986 WJSC-HC 838
• Docket Number: 1985 No. 579 Sp.,[1985 No. 579 Sp.]
• Court: High Court
• Date: 01 January 1987

1986 WJSC-HC 838

THE HIGH COURT

1985 No. 579 Sp.

HOGAN v. ST KEVINS CO

Court 5

IN THE MATTER OF THE ARBITRATION ACTS 1954 TO 1980 AND IN THE MATTER OF AN ARBITRATION

BETWEEN

NOEL HOGAN & ORS.

PLAINTIFFS

AND

SAINT KEVINS COMPANY AND OWEN PURCELL

DEFENDANTS

Citations:

ARBITRATION ACT 1889

ARBITRATION ACT 1954 S35

HALFDAN GRIEG & CO V STERLING COAL 1973 QB 843

HEAVEN & KESTERTON LTD & ALBIAC 1956 2 LlLR 316

LYSLAND CASE SEE HALFDAN GRIEG V STERLING COAL

POWER SECURITIES LTD V DALY UNREP MURPHY 27.02.84 1986/8/1594

RUSSELL ARBITRATION 19ED P293

Synopsis:

ARBITRATION

Question of law

Case Stated - Refusal - Arbitrator declining to state Case - Plaintiff applying to court for order directing arbitrator to state a Case - Principles applicable - Discretion of court - Landlord and tenant - Lease - Covenant - Plaintiff lessee undertaking to pay share of costs of maintenance and services provided by defendant lessors for entire building - Total costs to be determined by defendants" accountants - Stipulation in lease that certificate of accountants to bind plaintiff in relation to total costs and plaintiff's share - Plaintiff's share of expenses certified by accountants - Certificate disputed by plaintiff - Reference to arbitration - Question of law whether plaintiff bound by certificate - Submissions made by parties to arbitrator on question of law - By consent arbitrator assisted by advice of independent solicitor on matters of law - Interim ruling of arbitrator - Arbitrator finding, before making award, that plaintiff entitled to impugn certificates but "only insofar as the evidence is voiced in the certificates themselves or.... in the lease from which the certificates derive their authority" - Plaintiff dissatisfied with ruling - Court refusing to grant plaintiff's application - Question of law submitted to agreed arbitrator who had advice of solicitor - Circumstances not appropriate for order directing arbitrator to state special Case for opinion of court upon same question of law - Arbitration Act, 1954, s.35 - (1985/579 Sp. - Murphy J. - 22/1/86) - [1986] IR 80; [1987] ILRM 17

|Hogan v. Saint Kevins Co.|

1 Judgment of Mr. Justice Murphy delivered the 22nd day of January 1986.

2 This is an application under section 35 of the Arbitration Act 1954for an Order directing the secondly named Defendant, Mr. Owen Purcell (the Arbitrator) to state a question of law arising in the course of a reference to him in a dispute between the Plaintiffs and the first named Defendant in the form of a special case for the decision of this Court.

3 Section 35 (so far as it is material to this application) provides as follows:-

"An arbitrator or umpire may, and shall if so directed by the Court, state any question of law arising in the course of the reference in the form of a special case for the decision of the Court".

4 Even in anticipation of any consideration of the authorities referred to by the parties it can be seen that on any reading of the section first that the power of the Arbitrator to state a case or of the Court to direct such a case to be stated relates only to a question of law and not an issue of fact. Secondly, the point of law must arise in the course of the reference and, thirdly, that the use of the word "may" confers on the Arbitrator and the Court a discretion as to whether or not such a case should be stated in any particular circumstances. It is hardly necessary to add, however, that such a discretion is a judicial one and must be excerised on proper grounds and not capriciously or arbitrarily.

5 The claim arises in this way. The Plaintiffs hold various units within premises known as the Athlone Shopping Centre, Athlone, Co. Westmeath under a uniform lease of which the first named Defendants (who are an unlimited liability company) are the present lessors. The leases to the Plaintiffs, in addition to providing that the tenants for the time being should pay the rent thereby reserved and a contribution towards rates, provide for the payment of an additional sum "in respect of the maintenance and services provided by the landlord as set out in the first part of the Second Schedule hereto calculated and computed and payable at the times set out in the second part of the said Schedule" (see paragraph (b) of the second redendum clause). The first part of the Second Schedule to the lease requires the landlord to maintain and manage in good order, repair and condition and to cleanse and keep in an attractive and neat manner the public and service areas within and adjoining the shopping centre and having imposed that obligation in general terms goes on to deal with certain specific obligations imposed on the landlord. The second part of the same Schedule provides the manner of computing the tenants' liability to contribute to such maintenance and services. It is expressly provided in paragraph 2 (a) that the costs to the landlord of providing the services should be ascertained by the landlord's auditors or accountants acting as experts and not as Arbitrators and that such auditors or accountants should issue to the landlord a signed certificate specifying the total of such costs and the amount of each tenant's contribution thereto calculated as provided in that clause. That subparagraph then goes on to provide:-

"The said certificate shall be final and binding on the parties hereto in respect of the matters which it purports to certify'."

6 Within the body of the lease itself (at paragraph 5 of the provisions dealing with the covenants by the landlord) provision is made for the reference to arbitration of any dispute which should arise between the landlord and the tenant with regard to certain specified matters including in particular "the amount of any contribution payable by the tenant in respect of maintenance and services". The clause goes on to provide that the parties in dispute might stipulate that the Arbitrator should be appointed from one or other of three groups, namely, Fellows of the Institute of Chartered Accountants in Ireland, members of the Irish Auctioneers and Estate Agents in Ireland or members of the Royal Institute of Chartered Surveyors. There is also provision for the appointment, by agreement, of an Arbitrator from among Counsel of the Senior Bar. The clause expressly provides that the award of the Arbitrator should be final and binding on the parites.

7 In June 1982 a dispute arose between the Plaintiffs and the first-named Defendant (to whom I shall refer as "the lessor") as to the amount of the service charge payable by them respectively. The basis of that dispute is set out in a letter dated the 4th of June 1982 from Messrs. Tormey and Co., the Solicitors on behalf of the Plaintiffs to the Secretary of the lessor or its predecessor in title. In September of 1982 the solicitor on behalf of the Plaintiffs threatened to invoke the arbitration clause contained in the lease and by the middle of the following year agreement had been reached between the parties to appoint the Arbitrator and the Arbitrator himself had agreed to act as such. It is significant to note that at that stage the auditors or accountants to the lessors, Messrs. Stokes, Kennedy, Crowley and Co., had issued certificates for the years 1980,'81 and '82 determining the service charge payable by each tenant in respect of every square foot of space comprised in his unit, at £1.49, £1.32 and £1.34 respectively. Having regard to the existence of those certificates and recognising the terms contained in the leases under which the premises were held by the Plaintiffs,it seems reasonable to assume that the parties and their advisers must have been conscious of the fact that an important issue - if not the decisive issue - between the parties would be whether such certificates were indeed final and binding or whether the Plaintiffs could dispute the findings implicit in those certificates. However, doubt is cast upon the validity of this assumption by the fact that the Plaintiffs proposed the appointment of an accountant as Arbitrator and not - as one might have expected having regard to the nature of the issue adumbrated - a lawyer.

8 However, any possible misunderstanding as to the nature of the issue arising must have been dispelled by a letter dated the 24th of August 1983 from the solicitors on behalf of the lessor to the Arbitrator of which a copy was sent to the solicitors on behalf of the Plaintiffs in which the writers expressly stated as follows:-

"We feel that the tenants cannot go behind the certificate of the landlord's auditors in relation to the moneys...