Portsmouth Arms Hotel Ltd v Enniscorthy Udc

• Jurisdiction: Ireland
• Judge: O'Hanlon J.,
• Judgment Date: 14 October 1994
• Neutral Citation: 1995 WJSC-HC 1501
• Docket Number: No. 6381P/1993
• Court: High Court
• Date: 14 October 1994

PORTSMOUTH ARMS HOTEL LTD v. ENNISCORTHY UDC

BETWEEN

PORTSMOUTH ARMS HOTEL LIMITED

PLAINTIFF

AND

ENNISCORTHY URBAN DISTRICT COUNCIL

DEFENDANT

1995 WJSC-HC 1501

No. 6381P/1993

THE HIGH COURT

Synopsis:

ARBITRATION

Award

Compensation - Amount - Determination - Basis - Accuracy - Whether wrong factor taken into account - Compulsory acquisition of land - Whether possession taken by purchaser - Date from which interest to run - Whether issue to be remitted to arbitrator - Rules of the Superior Courts, 1986, order 56, r. 4 - Arbitration Act, 1954, s. 36 - (1993/6381 P - O'Hanlon J. - 14/10/94)

|Portsmouth Arms Hotel Ltd. v. Enniscorthy U.D.C.|

Citations:

HOUSING ACT 1966 S76

HOUSING ACT 1966 SCHED 3

LOCAL GOVT (NO 2) ACT 1960 S10

HOUSING ACT 1966 S86

HOUSING ACT 1966 S80

LANDS CLAUSES CONSOLIDATION ACT 1845 S69

DERELICT SITES ACT 1961 S3

DERELICT SITES ACT 1961 S4

ARBITRATION ACT 1954 S36

ARBITRATION ACT 1954 S36(1)

ARBITRATION ACT 1950 S22(1) UK

MONTGOMERY, JONES & CO V LIEBENTHAL & CO 1898 78 LT 406

RSC O.56 r4

MURPHY V DUBLIN CORPORATION 1979 IR 115

MEENAGHAN V DUBLIN CO COUNCIL 1984 ILRM 616

KEENAN V SHIELD INSURANCE CO LTD 1988 IR 89

MCSTAY V ASSICURAZIONE GENERALI SPA 1989 IR 248

HOGAN V ST KEVINS CO 1986 IR 80

HALSBURYS LAWS OF ENGLAND 4ED V8 PARA 148–149

COMPANIES ACT 1982 S12(6)

1 Judgment delivered by O'Hanlon J., the 14th day of October, 1994.

2 These proceedings arise out of a Compulsory Purchase Order made by the Defendant on the 25th October, 1979, under the provisions of Section 76 of the Housing Act, 1966, and the Third Schedule thereto, as extended by Section 10 of the Local Government (No. 2) Act, 1960, (as substituted by Section 86 of the Housing Act, 1966), for the acquisition of the site in Enniscorthy on which the Portsmouth Arms Hotel formerly stood.

3 At that time the hotel had ceased to trade as it had been extensively damaged by fire, but it was intended to carry out work of demolition and rebuilding, and the necessary planning permission had been obtained for this purpose before the C.P.O. was made and served.

4 The C.P.O. was confirmed by Ministerial Order on the 3rd April, 1980, and was duly published with Notice of Confirmation thereof, and became operative when the prescribed time had elapsed without the institution of proceedings to challenge the validity of the said Order.

5 Thereafter the Defendant served Notice to Treat dated the 27th April, 1982, the date of service being, apparently, somewhat later, and this evoked a response by letter dated the 18th June, 1982, from Sean O'Brien & Co., Solicitors, on behalf of Mr. Bernard Hogan, (who has claimed at all material times to hold the controlling interest in the Company which owns the site), in which the sum of £200,000 was claimed as compensation in respect of the compulsory acquisition of the site.

6 A counter-offer was made on behalf of the Urban District Council by letter dated the 22nd July, 1983, and this was followed up by letter dated 28th July, 1983, from the Council's Solicitors, purporting to withdraw the Notice to Treat. This action appears to have been taken without regard to the fact that a figure for compensation had already been put forward by Messrs. Sean O'Brien & Co., Solicitors, on behalf of the owners, and the withdrawal of the Notice to Treat was subsequently held to be invalid in arbitration proceedings between the parties which took place in the year 1993.

7 On the 18th February, 1983, the Council had made a further Order in exercise of the powers conferred upon them by Section 80 of the Housing Act, 1966, giving Notice of their intention to enter on and take possession of the lands described in the C.P.O. on the 14th March, 1983, and one of the issues which arises for determination in these proceedings in whether the Council did, in fact, enter and take possession of the lands at any time since the making of that Order, as they would have been entitled to do.

8 As the parties were unable to reach agreement on the primary issue as to whether the Council were under a legal obligation to proceed on foot of the C.P.O. and acquire the lands, or on the secondary issue as to the amount which should be payable by way of compensation if the compulsory acquisition went ahead, the matter went to arbitration before Sean McDermott, FRICS, FCI Arb., a Property Arbitrator nominated by the Land Values Reference Committee under the relevant statutory provisions. By his award, dated the 30th day of April, 1993, the Arbitrator held that the Defendant (Enniscorthy Urban District Council) had not withdrawn the Notice to Treat within six weeks after the delivery by the Claimant (Portsmouth Arms Hotel Limited) of Notice of Claim in response to the Notice to Treat and therefore that the telegram and confirming letter of the 28th July, 1983, purporting to withdraw the Notice to Treat was of no effect.

9 In these circumstances he awarded a sum of £67,000 as the amount of the compensation to be paid by the Defendant to the Plaintiff for the compulsory acquisition of its interest in the lands to be acquired, with further provision for payment of costs and expenses.

10 To date the transaction has never been brought to a conclusion between the parties. The Plaintiff in the present proceedings claims that the Defendant Council should be regarded as having entered upon the lands in question and taken possession thereof pursuant to the Notice of Intention to Enter, as far back as the year 1983, and that in addition to the amount of compensation fixed by the Arbitrator, interest on the said sum is now payable by the Defendant to the Plaintiff from the 1st April, 1983, to the date of completion of the transaction.

11 The Defendant while strongly resisting the claim for interest in respect of any period prior to the date of the arbitration award, also contends that the Arbitrator was misled into believing that an automatic right of revival or renewal of a 7-day on-licence attached to the hotel premises if reconstructed in accordance with the planning permission which had been obtained, existed, and was thereby induced to award a sum of £8,000 in respect of the loss of this privilege, whereas such claim was advanced with no legal basis therefor. Accordingly, the Plaintiff while not seeking to have the entire arbitration proceedings set aside, seeks to have the award remitted back to the Arbitrator to enable him to be fully apprised of the legal situation in relation to the licence which formerly attached to the hotel premises, and to enable him to revise his award in the light of such further evidence.

12 The Defendant also claims that good title has not yet been established in the Plaintiff to the property which is to be acquired, and that any moneys found due in respect of compensation for acquisition should be paid into Court as provided for by Section 69 of the Lands Clauses Consolidation Act, 1845, until the question of title has been resolved.

13 Dealing first with the claim to interest on the compensation moneys, I have come to the conclusion, after reviewing all the evidence given in the case, that the Defendant should not be regarded as having entered upon the lands in exercise of its powers of entry under the Housing Act, 1966, and other powers relevant to the present claim enabling it to do so, at any time prior to the hearing and...