Irish Life Assurance Company Ltd v Dublin Land Securities Ltd

• Jurisdiction: Ireland
• Judge: Keane, J.
• Judgment Date: 02 May 1986
• Neutral Citation: 1986 WJSC-HC 935
• Court: High Court
• Docket Number: [1984 No. 1536P],No. 1536 P/1984
• Date: 02 May 1986

1986 WJSC-HC 935

THE HIGH COURT

No. 1536 P/1984

IRISH LIFE ASSURANCE CO LTD v. DUBLIN LAND SECURITIES LTD

BETWEEN:

IRISH LIFE ASSURANCE COMPANY LIMITED

PLAINTIFF

AND

DUBLIN LAND SECURITIES LIMITED

DEFENDANT

Citations:

A ROBERTS & CO LTD V LEICESTERSHIRE COUNTY COUNCIL 1961 CH 555

BOWSTEAD ON AGENCY 15ED P412

FARLOW V SCOTTISH EQUITABLE LIFE INSURANCE SOCIETY 98 LJ CH 225

GUN V MCCARTHY 13 LR (IRL) 304

HILLINGDON ESTATES LTD V STONEFIELD ESTATES LTD 1952 CH 627

IN RE, GREEN DALE BUILDING COMPANY LTD 1977 IR 256

JOSCELYNE V NISSEN 1970 2 QB 86, 1970 2 WLR 509, 1970 1 AER 1213

MONAGHAN CO COUNCIL V VAUGHAN 1948 IR 306

NOLAN V GRAVES & HAMILTON 1946 IR 376, 81 ILTR 9

RIVERLATE PROPERTIES LTD V PAUL 1975 1CH 133, 1974 3 WLR 564, 1974 2 AER 68

ROONEY & MCPARLAND LTD V CARLIN 1981 NI 138

SHIPLEY UDC V BRADFORD CORPORATION 1936 CH 375

SNELL EQUITY 28ED P614

THOMAS BATES & SON LTD V WYNDHAM'S LINGERIE LTD 1981 1 AER 1077

Synopsis:

AGENCY

Principal

Knowledge - Agent's knowledge - Imputation to principal - No evidence that principal approved or accepted course of action proposed to agent - No information given to principal by agent - ~See~ Mistake, contract - (1984/1536P - Keane J. - 2/5/86) - [1986] IR 332

|Irish Life Assurance v. Dublin Land Securities|

MISTAKE

Contract

Remedy - Rectification - Principles applicable - Distinction between mutual and unilateral mistake - Agent - Knowledge - Imputation that information passed to principal - Compulsory acquisition - Notice to treat - Passing of property - Sale of land - Multiplicity of properties - Vendor's intention to exclude specific holdings from sale - Vendor's property manager informed estate agent acting for purchasers that certain lands, described generally and incompletely, were to be excluded from sale - Estate agent did not give that information to purchasers - Schedules of property for sale prepared by vendor's solicitor, examined by purchasers" solicitor, and inserted in contract of sale - Contract executed by parties - Subsequent discovery by vendor's solicitor that specific holdings mistakenly included in property for sale - Property for sale consisting of ground rents and scattered vacant plots - Information acquired by estate agent deemed to have been given to purchasers - Nevertheless, no evidence that purchasers accepted the exclusion of the specific holdings - Held that plaintiff vendor had not established a mutual mistake - Held that plaintiff vendor was not entitled to rectification on the ground of unilateral mistake, since there had been no sharp practice on the part of the defendant purchasers, who had been unaware of the mistake - Compulsory acquisition of land - Local authority serving notice to treat on landowner - Held that no estate passed to local authority by virtue only of service of notice to treat - (1984/1536 P - Keane J. - 2/5/86) - [1986] IR 332

|Irish Life Assurance v. Dublin Land Securities|

COMPULSORY ACQUISITION

Property

Vesting - Notice to treat - Held that no estate passed to local authority by virtue only of service of notice to treat - (1984/1536 P - Keane J. - 2/5/86) - [1986] IR 332

|Irish Life Assurance v. Dublin Land Securities|

REAL PROPERTY

Alienation

Compulsory acquisition - Notice to treat - Passing of property - Held that no estate passed to acquiring local authority by virtue only of service of notice to treat - (1984/1536 P - Keane J. - 2/5/86) - [1986] IR 332

|Irish Life Assurance v. Dublin Land Securities|

1 JUDGMENT delivered the 2nd day of May, 1986, by Keane, J.

2 It is a truism that the sale of one ground rent in Dublin for fifty pounds can cause more nightmares to lawyers than that of an office block for millions of pounds. The difficulties involved in a sale of over nine thousand ground rents can scarcely be exaggerated and it is hardly surprising that it has given rise to a problem of spectacular dimensions in the present case.

3 It is many years since the Plaintiffs began investing some of the funds at their disposal in ground rents, principally in the Dublin area. In those days, they represented a not unattractive form of investment. The fact that they generally produced a fixed income for the investor was not so important when inflation was comparatively low and the cost of collecting them could be maintained at a reasonable level. While some householders regarded them as an irritating feudal survival, organised and militant campaigns against them were virtually unknown.

4 All that had changed by the mid 1970's. Inflation was now rampant, the cost of collection had increased significantly and extremely vocal resistance to ground rents had developed in many areas. This last development was a source of particular embarrassment to the Plaintiffs who numbered among their policy-holders, or potential policy-holders, many people who also paid them ground rents. In addition, there was now on the statute book legislation enabling householders to buy out their ground rents and at the time of the events giving rise to these proceedings the ceiling price which had to be paid by a person wishing to buy the freehold represented just over six years' purchase. Not surprisingly, the Plaintiffs from this time onwards were actively interested in disposing of their ground rents portfolio if a buyer could be found at a reasonable price.

5 In April 1981, Mr Peter White, a partner in the firm of Messrs Gilbert Leon and White, Estate Agents and Auctioneers, introduced such a purchaser to the Plaintiffs. He was Mr Philip Frederick, a London property developer, who had extensive interests in the United Kingdom and elsewhere, but had no experience of the Irish property market and, indeed, prior to the events giving rise to this litigation, had never been in this country.

6 Having regard to the number of properties involved, it was obvious to both parties that the most practical method of arriving at a price for the acquisition of the portfolio was to agree on an appropriate multiplier of the rental received. Mr Frederick suggested a multiplier of 3.36 which would mean a purchase price in the region of £425,000. Mr William Nowlan, the property portfolio manager of the Plaintiffs, agreed to recommend this offer to his Board for approval, which was eventually forthcoming. Both parties instructed Solicitors to act on their behalf in the transaction, Mr Frederick retaining Mr Stephen Miley of Messrs. Miley and Miley and the Plaintiffs' side of the transaction being handled by their "in house" Solicitor, Mr James Devlin.

7 It was accepted by both parties that included in the ground rents portfolio there were properties which would provide a purchaser with some profitable opportunities. Thus, in some cases, the leases under which the ground rents were payable might have a relatively short reversion, giving rise to the possibility of an increased rent (or even vacant possession) on expiry. More relevantly in the context of these proceedings, it was not uncommon to find in residential estates in the Dublin are a that not all the land was in the occupation of the householders or taken in charge by the local authority. These vacant sites offered possibilities for development which represented a major attraction of the transaction from the purchaser's point of view. They were variously described during the course of the proceedings as "odds and ends" (by the Plaintiffs) and "plums" or "jewels in the potatoes" (by Mr Frederick).

8 Among the unbuilt sites in the ownership of the Defendants was a stretch of land at Palmerstown of over seven acres which straddled the boundary of Dublin City and County. This land had been reserved for road improvement purposes in the development plans of the two local authorities concerned for many years. In the case of the lands in the county, notice of the making of a Compulsory Purchase Order had been given by the Council on the 7th April 1977, and the Order had been confirmed by the Minister for the Environment on the 19th November 1979. A Compulsory Purchase Order had been made by Dublin Corporation in respect of the lands in the City on 17th April 1975, but was not confirmed by the Minister until the 13th December 1983. It was proved at the hearing that the total amount of compensation payable in respect of all these lands and adjoining lands acquired by agreement together with interest accrued was £594,761. No ground rents were payable out of these lands.

9 Mr Nowlan had no intention of including these lands in the sale of the gound rents portfolio to Mr Frederick or any other purchaser and he said in evidence that he so informed Mr White at a meeting in his (Mr Nowlan's) office on the 26th May 1981, at which a member of his staff, Miss Angela McGauran, was also present.

10 Mr White, in seeking a possible purchaser for the ground rents portfolio, was armed by the Plaintiffs with what was called the "Blue Book" containing details of the properties in the portfolio and the approximate rental income. It was accepted that the Blue Book was in many respects out of date: a significant number of the ground rents had, for example, been purchased by the tenants since it was originally compiled. In addition, there were a number of properties which, although included in the Blue Book, the Plaintiffs wished to be excluded from the sale, since they did not form part of the ground rent portfolio proper, but were ground rents payable out of the Plaintiffs' own property or sites which they were in the process of developing. Conversely, there were properties not included in the Blue Book which the Plaintiffs considered did form part of the portfolio. Mr Nowlan, accordingly, informed Mr Devlin's department of properties that were to be either excluded from or added to the properties being sold to Mr Frederick. Such information was conveyed to Mr Devlin's department before the contracts giving rise to the...