Huddleston's Estate (No. 2)

• Jurisdiction: Ireland
• Judgment Date: 22 November 1921
• Date: 22 November 1921
• Court: Court of Appeal (Ireland)

Appeal.

Huddleston's Estate.

HUDDLESTON'S ESTATE (No. 2) (1)

Land Purchase Acts - Bonus - Mortgagees in possession - Originating application by - Mortgagees becoming absolute owners pending completion of sale - Right to bonus - Crucial date - Irish Land Act, 1903 (3 Edw. 7,c. 37), sect. 48, sub-s. 4.

Appeal from an order of Wylie J., dated February 3rd, 1920, whereby it was declared that the vendors, Denis Huddleston and Daniel O'Connell, were entitled to the percentage payable under sect. 48 of the Irish Land Act, 1903, in respect of lands in County Cork sold in the matter. The vendors were assignees of the interest of mortgagees under a mortgage made by Daniel Cronin Coltsman on February 6th, 1856. A petition for the sale of the lands was filed in the Land Judge's Court on July 23rd, 1886, and a receiver was then appointed. The petition for sale was dismissed on March 25th, 1901, and the receiver discharged, whereupon the vendors entered into possession as mortgagees, and so continued without having accounted or having been required to account by anyone in respect of the rents or profits.

On October 25th, 1907, the vendors as mortgagees in possession lodged an originating application, asking that the lands in question might be declared fit to be regarded as a separate estate, and in the same year executed purchase agreements with the tenants.

On April 16th, 1918, the Land Commission made an order declaring the lands fit to be regarded as a separate estate.

On June 19th, 1919, the lands were vested in the purchasing tenants, and an order made attaching claims to the purchase-money.

In the meantime the vendors had, through the operation of the Statute of Limitations, become absolute owners. The vendors, as absolute owners, applied on the ruling of the final schedule for the payment to them of the bonus. Wylie J. made the following order:—"The Court, though of opinion that the estate was sold by the vendors as mortgagees in possession within the meaning of the aforementioned section [sect. 48 of the Irish Land Act, 1903], doth declare them entitled to the percentage payable under sect. 48 of the Irish Land Act, 1903, in respect of the estate sold in this matter." Against this order the Treasury appealed on the ground that the estate had been sold by mortgagees in possession, and that therefore no bonus was payable.

On the 25th October, 1907, mortgagees in possession lodged an originating application under the Land Purchase Act, 1903 (3 Edw. 7, c. 37), seeking to have the lands of which they were in possession declared fit to be regarded as a separate estate, and in the same year executed purchase agreements with the tenants. On the 16th April, 1918, the Land Commission made an order declaring the lands fit to be regarded as a separate estate. In the meantime the mortgagees, under the Statute of Limitations, had become absolute owners. On the 19th June, 1919, the lands were vested in the purchasing tenants, and an order made attaching the claims to the purchase-money.

Held (Sir James Campbell C. dissentiente), that the crucial date for ascertaining the right to the bonus was the date of the agreement for sale.

Per Ronan L.J.: The Act makes the right to the bonus depend on the exercise of the powers of disposition, not on the extent of ownership. The bonus is payable if there is an agreement by a competent vendor and a subsequent vesting order under that agreement.

Cur. adv. vult.

Sir James Campbell C.:—

Denis Alexander Huddleston and Daniel O'Connell lodged an originating application in this case in the prescribed form under the Land Purchase Act, 1903, upon the 25th October, 1907, seeking to have certain lands in the County of Cork, of which they were at that date mortgagees in possession, declared to be fit to be regarded as a separate estate for the purpose of sale under the Act. The proceedings consequent upon this application dragged along for twelve years, but in 1919 the sale of the estate was completed, by their holdings being vested in the tenant purchasers, and the purchase-moneys lodged in bank under sect. 24, with the prescribed order for the attachment of claims. The respondent Huddleston, as the surviving vendor, thereupon claimed to be absolutely entitled to the percentage and the purchase-money upon the ground that the vendors had by the Statute of Limitations acquired the fee-simple in the lands in March, 1915, and their claim was returned in the Final Schedule of Incumbrances filed on the 17th November, 1919. An objection to the schedule in this respect was lodged by the Official Assignee, as representing the mortgagor, and claiming that the service of the originating application suspended the running of the Statute of Limitations as against the mortgagor. The hearing and decision upon this objection by Ross J. will be found in the report,Huddleston's Estate(1). Suffice it for the moment to say that he overruled it, holding that the originating application had not the effect contended for, and that the absolute estate in the lands had by the operation of the statute been transferred to the vendors. Subsequently the respondent applied for payment to him of the percentage, but upon this application coming before Wylie J., on the 15th January last, he directed that notice of the application

should be served upon the Treasury Solicitor, and adjourned the hearing until the 20th January. Upon that date there was no appearance by or on behalf of the Treasury; but Wylie J. again adjourned the hearing, evidently for the purpose of inducing the Treasury to contest the claim, with the result that their solicitor replied by letter which in effect stated that as the result of the decision by Ross J. upon the claim by the Official Assignee he could see no reason for objecting to the payment of the bonus. I have little doubt that this official before coming to this conclusion had, in accordance with the usual practice, been advised upon the matter by the Law Officers of the Crown; but, be this as it may, he did not appear, nor was any objection to the payment of the bonus made on the 3rd February. I cannot recall any instance in which an order of the High Court was ever couched in the terms in which the order of Wylie J. made upon that date reads. It is as follows: "The Court, though of opinion that the estate was sold by the vendors as mortgagees in possession within the meaning of sect. 48 of the Irish Land Act, 1903, doth declare them entitled to the percentage payable under that section," &c. In the case of a Judge of his learning and experience I can only interpret this remarkable order in one way, and hold that he considered himself bound by the previous decisions of this Court to decide, contrary to his own opinion, in favour of the vendors.

The exact question for decision turns upon the meaning of the words "any estate sold," which are to be found in the opening words of the section, and are repeated throughout the section in all its clauses, because, as I shall presently show, it has been decided by this Court, on at least two occasions, that the same construction must be given to these words wherever they occur in the section. Much argument and criticism have been expended upon many sections in the earlier legislation, mainly with the view of establishing that such phrases as the "sale of a holding,""lands sold," &c., are used at one time in the sense of the actual or completed sale, and at another in that of the conditional agreement of purchase between landlord and tenant. I agree in the opinion of Holmes L.J. in Boyle's Estate(1) that, as this

bonus or percentage is the creation of the Act of 1903, we must, in view of the essential differences between that Act and its predecessors, look to it for guidance as to the meaning and effect of this sect. 48. I must, however, correct an impression which appeared more than once in the argument for the appellant, as it has done elsewhere, that in the prescribed forms of purchase agreements under the earlier Acts, which were confined to the sales of "holdings" as distinguished from "estates," the condition was expressed in the words "subject to an advance of the purchase-money being sanctioned by the Laud Commission."In truth, these forms at no time, from the earliest to the latest, are made conditional upon the sanction of the advance, but only upon the advance being made. This erroneous impression has, I am satisfied, been responsible for much of the confusion which has enveloped this question.

This error owes its origin, in my opinion, to a definition which is to be found in a note on page 397 of Cherry and Wakely's Text-Book, 2nd edition, in which it is stated that the expression "'Lands sold' [under the Act of 1887] mean lands agreed to be sold and for the purchase of which advances have been sanctioned." It is true that this definition of the date when lands were sold under this earlier legislation would be fatal to the conclusion, so strongly pressed before us, that they were sold at the date of the agreement to sell; nevertheless, I am satisfied that they were not sold until a later date, namely, when the condition of the purchase agreement that an advance should be made had been performed by the making of it. I think the learned authors were influenced in this definition by regard to sect. 22 of the Act of 1887, which confers jurisdiction upon the Land Commission, upon the application of either party to the agreement, to decree specific performance of it, provided the advance of the purchase-money has been sanctioned by the Land Commission. This is the only section in the whole Act in which I can find any reference to the sanction of the advance, and in the Act of 1885 it does not occur at all. I think, having regard to the purpose of this sect. 22, that what was contemplated was a definite and absolute sanction; but the form of sanction adopted by the Land Commission, and prescribed by their rules made under...