J. Dayrolles Crosbie, Vendor; John Neilan, Tenant. Same, Vendor; Jeremiah Crean, Tenant

• Jurisdiction: Ireland
• Judge: Meredith, J.
• Judgment Date: 28 January 1907
• Court: Court of Appeal (Ireland)
• Date: 28 January 1907

J. Dayrolles Crosbie,

Vendor;

John Neilan,

Tenant.

Same,

Vendor;

Jeremiah Crean,

Tenant.

Meredith, J.

Appeal.

CASES

DETERMINED BY

THE CHANCERY DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND BY

THE IRISH LAND COMMISSION,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL.

1907.

Landlord and tenant — Land purchase — Agreement as to price — Arrears of rent — Bonus — Irish Land Act, 1903 (3 Edw. 7, c. 37), ss. 48, 24, sub-s. 8.

In a sale by a landlord of an estate under the Irish Land Act, 1903, to the tenants, arrears of rent may be included in estimating the purchase-price of the holdings, and the bonus is payable on the full amount of the purchase-money, notwithstanding that arrears of rent due by the tenants have been taken into consideration in arriving at that price.

Questions of law submitted to Meredith, J., by the Estates Commissioners for decision. The memorandum of the Estates Commissioners, dated the 18th May, 1906, was as follows:—

“In this case the vendor is the absolute owner of the estate, and has entered into agreements for the sale thereof direct to the tenants.

“John Neilan, one of the purchasing tenants on the said estate, was tenant to the vendor of his holding at a rent of £38, fixed by agreement for a second statutory term, dated the 6th April, 1904, and filed in the Land Commission on the 20th July, 1904.

“The rent for the first statutory term was the sum of £47 10s. On the 2nd June, 1904, the vendor agreed to sell, and the said John Neilan agreed to purchase, the said holding for the sum of £1034; and on the 20th June, 1904, the said agreement and the application for an advance of the said sum of £1034 was lodged in the Land Commission.

“The arrears of rent due by the said John Neilan in respect of the said holding immediately prior to the signing of the said purchase agreement, as admitted by the vendor, amounted to the sum of £228.

“It is also admitted that the sum of £1034 applied for includes the sum of £59, part of the said total arrears due by the said tenant at the date of signing the said purchase agreement.

“The said sum of £1034 amounts to 27·2 years' purchase of the said £38; and if the said sum is advanced, the annuity payable would amount to £33 12s. 2d., being less than the present rent by 11·6 per cent.

“The Estates Commissioners have provisionally declared the lands for sale, including the holding of the said John Neilan, an estate for the purposes of the Act.

“The Estates Commissioners beg to refer the following questions of law for the decision of the Judicial Commissioner:—

“1. Whether the entire of the said sum of £59, or any portion thereof, can be included in the advance to be made out of the Land Purchase Fund to the said tenant?

“2. In the event of its being decided that an advance can be made of the said sum of £59, or any portion thereof, do the provisions of section 1 (1) apply?

“3. In the event of its being decided that an advance can be made of the said sum of £59, or any portion thereof, would the percentage payable on the purchase-money be payable on the said sum of £59 or such portion thereof as was advanced?

“4. In the event of its being decided that an advance cannot be made of the said sum of £59, or any portion thereof, then is the said purchase agreement wholly void and inoperative as between the parties thereto?”

The vendor, James D. Crosbie, made an affidavit, filed the 25th June, 1906, from which the following facts appeared:—

The basis of sale on his estate was stated in this way—first-term tenants were to receive a reduction of 30 per cent., or 6s. in the £1; second-term tenants, 20 per cent., or 4s. in the £1. The half-year's rent then payable either to be paid in cash or added to the purchase-money at the tenants' option; arrears to be liberally dealt with on the merits of each case.

The meaning of these terms was clearly explained by him at general meetings of the tenants, and also to any individual tenant who made inquiries, and every tenant thoroughly understood that the meaning of them was that the purchase-money of all judicial tenants, whose rents were fixed before 1896 (for shortness, called first-term tenants), was to be calculated in the following manner, namely:—the rent was to be reduced by 6s. in the £1, the resultant was to be taken as an annuity at 3¼ per cent., payable under the Irish Land Act, 1903, and the principal sum which such an annuity would represent was to be calculated; to this principal sum was to be added the half-year's rent unless paid; and where arrears were due a further sum was to be added in satisfaction of such arrears, and the resultant of these calculations was to be the purchase-money. There never was any purchase-money except the one purchase-money, the resultant of the aforesaid calculations. Eventually the tenants accepted the landlord's terms, and most of them preferred not to pay the half-year's rent in cash, and the vendor appointed the 1st and 2nd June for signing the agreements. Before those days, the vendor had each tenant's purchase-money calculated, and communicated the figures to him. The question as to arrears of rent was settled with each tenant.

With regard to John Neilan, his purchase-money was arrived at, in accordance with the above terms, as follows:—20 per cent. off rent of £38 gave an instalment of £30 8s., representing a capital sum of £935; to this was added £19 for half-year's rent then payable, and £40 in full satisfaction of the arrears of rent, then amounting to £228; and the resultant of £1034 was the purchase-money. The vendor most distinctly explained and agreed with Neilan as to the half-year's rent, and £40 arrears being taken into consideration in manner aforesaid in arriving at his purchase-money, and he had accepted the vendor's figures prior to the date of signing the agreement.

The facts of Crean's case were similar to Neilan's, and the questions submitted for decision by the Estates Commissioners were similar to those raised by the memorandum in Neilan's case. Jeremiah Crean was tenant to the vendor of his holding at a rent of £40, fixed by a fair rent agreement for a second statutory term filed in the Land Commission on the 26th April, 1904. The rent for the first statutory term was the sum of £49 10s. fixed by fair rent agreement, lodged in the Land Commission on the 24th October, 1883.

On the 1st June, 1904, the vendor agreed to sell, and Crean agreed to purchase, the holding for the sum of £1015; and on the 24th June, 1904, the agreement and application for an advance were lodged in the Land Commission.

The arrears of rent due by Crean in respect of the holding, immediately prior to the signing of the said purchase agreement, amounted to the sum of £105 8s. 9d.

The purchase-money of £1015 was arrived at as follows:—A reduction of 20 per cent. off the rent of £40 gave an annuity of £32, which, capitalized at 3¼ per cent., amounted to £985 (calculating to nearest pound). To this a sum of £20 was added, the half-year's rent then payable, and also a sum of £10 in lieu of arrears, making together £30, which, added to £985, made the £1015 stated in the agreement.

The questions asked in Crean's case were the same as those in Neilan's case, save for this, that in Neilan's case the questions were asked as to the sum of £59 (being the half-year's rent and the amount added on account of arrears of rent), and in Crean's case they were asked as to the sum of £1015 (being the entire amount of the advance applied for).

The case came before Meredith, J., for decision of the questions submitted in the above-mentioned memoranda.

W. M. Jellett, K.C., and T. H. Maxwell, for the vendor.

The Solicitor-General (Redmond J. Barry, K.C.) and Dudley White, for the Treasury.

Mr. Justice Meredith having been appointed Master of the Rolls, his judgment was read by

Wylie, J., as follows:—

The purchase-money of the holdings of John Neilan and Jeremiah Crean includes a sum ear-marked in each case as the price of certain arrears of rent due by the tenant to the landlord at the date of the purchase-agreement. The question to be decided is whether all or any portion of the sum so included can be advanced by the Land Commission out of the Land Purchase Fund. In my opinion, section 24, sub-sect. (8), of the Irish Land Act, 1903, supplies the answer to the question in both its branches. The sub-section is as follows:— “In the case of the sale of an estate, where at the date hereinafter mentioned arrears of rent were due in respect of any holding on the estate, a sum equivalent in amount to those arrears, but not exceeding in any case one year's rent, shall be paid out of the purchase-money to the person who would have been entitled to receive those arrears for his own use. The aforesaid date shall be, in the case of an estate purchased by the Land Commission, the date of the agreement for that purchase, and in the case of an estate purchased by other persons, the date of the agreement for the purchase of the holding.”

It appears to me that this sub-section was the inevitable outcome of the legislation with regard to arrears of rent which preceded the Act of 1903.

The problem of arrears and how to deal with them, in connexion with sales under the Land Purchase Acts, had long been one of difficulty and importance to landlord and tenant alike. It is not necessary to go back further than the case of Vickery v. Deane (1) to realise how closely arrears of rent had become connected with “purchase-money” of the holding. In the course of his judgment (page 43) Johnson, J., says:— “The Land Commission Rules, 5th December, 1887, under the Land Purchase (Ireland) Act, 1887, permitted the insertion in the agreement for sale between landlord and tenant of a provision that the purchase-money should include rent due and to accrue due; and Rule 55

required the Land Commissioners, before signing a vesting order or making an advance, to be satisfied that the tenant's rent had been paid, satisfied, or...