Shirley & Others v O'Gorman & Company Ltd

JurisdictionIreland
JudgeMr. Justice Fennelly
Judgment Date02 February 2012
Neutral Citation[2012] IESC 5
Date02 February 2012
CourtSupreme Court
Docket Number[S.C. No. 292 of 2006]

[2012] IESC 5

THE SUPREME COURT

Denham C.J.

Murray J.

Fennelly J.

Macken J.

Finnegan J.

No. 292/2006
Shirley & JES Holdings Ltd v A O'Gorman & Co Ltd & Ors
[2012] IESC 5

Between:

JOHN E SHIRLEY JES HOLDINGS LIMITED LUCY SHIRLEY
Plaintiffs/Appellants
-v-
A. O'GORMAN & COMPANY LIMITED, IRELAND AND THE ATTORNEY GENERAL
Defendants/Respondents

CONSTITUTION ART 34.4.5

IARNROD EIREANN v IRELAND 1996 3 IR 321 1995 2 ILRM 161 1995/8/240

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S9(2)

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S9(5)

LANDLORD & TENANT(GROUND RENTS) ACT 1967 S4

LANDLORD & TENANT(GROUND RENTS) ACT 1967 S3

LANLORD & TENANT (REVERSIONARY LEASES) ACT 1958 S3(2)(D)

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S8

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S9(1)A

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S9(1)B

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S9(1)D

LANDLORD & TENANT (GROUND RENTS) (NO.2) ACT 1978 S10.2

LANDLORD & TENANT ACT 1931 S48(1)(C )

LANDLORD & TENANT ACT 1931 S48(1)(D)

LANDLORD & TENANT (REVERSIONARY LEASES) ACT 1958

LANDLORD & TENANT (AMDT) ACT 1980 S35

LANDLORD & TENANT (AMDT) ACT 1980 S36

LANDLORD & TENANT (AMDT) ACT 1984 S7(4)

LANDLORD & TENANT (AMDT) ACT 1980 S35

LANDLORD & TENANT (AMDT) ACT 1980 S35(2)

CONSTITUTION ART 43

CONSTITUTION ART 43.2.2

LANDLORD & TENANT (AMDT) ACT 1984 S7(3)

LANDLORD & TENANT (AMDT) ACT 1980 S10.2

CONSTITUTION ART 34.4.5

MCDONALD v BORD NA GCON (NO.2) 1965 IR 217 100 ILTR 89

EAST DONEGAL CO-OP v AG 1970 IR 317

MCDAID v SHEEHY 1991 I IR 1

CONSTITUTIONAL LAW

Statute

Interpretation - Construction - Presumption of constitutionality - Double construction rule - Landlord and tenant - Tenant's right to compulsorily acquire fee simple - Rebuttable presumption - Erection of permanent buildings - Burden of proof - Standard of proof - Balance of probabilities - Locus standi - Predecessors in title - Whether statutory scheme for purchase of fee simple by tenant consistent with Constitution - Whether presumption of constitutionality applied - Whether statute could be constructed in manner compatible with constitution - Whether presumption that landlord did not erect buildings could be rebutted - Whether standard of proof for rebuttal of presumption balance of probabilities - Whether plaintiffs had standing to challenge constitutionality of statutory scheme - McDonald v Bord na gCon (No 2) [1965] IR 217 and East Donegal Co-Operative Livestock Mart Ltd v Attorney General [1970] IR 317 followed - Landlord and Tenant (Ground Rents) (No 2) Act 1978 (No 16), s. 10(2) - Constitution of Ireland 1937, Article 43 - Plaintiff's appeal allowed (292/2006 - SC - 2/2/2012) [2012] IESC 5

Shirley v A O'Gorman & Co Ltd

COURTS

Supreme court

Constitution - Validity of law - Single judgment of court - Whether interpretation of law distinct from decision on validity of law - Whether single judgment of court required - Constitution of Ireland 1937, Article 34.4.5 - Plaintiff's appeal allowed (292/2006 - SC - 2/2/2012) [2012] IESC 5

Shirley v A O'Gorman & Co Ltd

Facts: The proceedings arose by way of appeal from the High Court where the High Court had dismissed the challenge of the appellants to the constitutionality of legislation permitting lessees compulsory acquire the fee simple in tenements from lessors. In related proceedings, the High Court had held on appeal from the Circuit Court that the first named respondent had the right to buy the fee simple in property from the second named appellant in accordance with s.10(2) Landlord and Tenant (Ground Rents (No. 2)) Act 1978. An order was made by the High Court that the two proceedings be heard together. The High Court declined to decide an important issue of interpretation on appeal because of the pending action, but did not address it at all in the latter proceeding. The appellant claimed that legislation, which had the effect that it had to transfer its fee simple interest to the first-respondent, was unconstitutional in so far as it was arbitrary and unjust. The question arose as to the interpretation of "permanent buildings" or "predecessors in title" therein.

Held by the Supreme Court per Fennelly J. (Denham CJ, Murray, Macken, Finnegan JJ. concurring) that the section properly construed would not have affected the appellant, when interpreted in light of the presumption of constitutionality and the double construction rule. If the term permanent buildings meant that it was sufficient if the lessee had erected merely part of the buildings, the right to compulsorily acquire the fee simple would be conferred on such a lessee regardless of the fact that the lessor had erected and owned the major buildings. The High Court did not decide the question of interpretation of the term predecessors in title. The effect of the decision by the learned judge on the interpretation of the Act in the Circuit Court appeal was that the mater had effectively been decided before the hearing of the constitutional claim. The Court would dismiss the appeal from the High Court but for the very different reason that the appellant would not have any standing to challenge the section as being repugnant to the Constitution.

Reporter: E.F.

1

1. This case comes before the Court by way of appeal from the judgment of the High Court (Peart J) delivered on 31 st January 2006. In that judgment the learned judge dismissed the challenge of the appellants to the constitutionality of a number of provisions of the legislation which permits lessees compulsorily to acquire the fee simple in tenements from lessors. I will call that the "constitutional action." In a related proceeding, Peart J had decided, by an earlier judgment of 31 st May 2005, on appeal from the Circuit Court, that the first-named respondent had the right to buy the fee simple in property in Carrickmacross from the second-named appellant in accordance with the provisions of Landlord and Tenant (Ground Rents) (no. 2) Act, 1978. These are the ground-rent proceedings.

2

2. There cannot, of course, be any appeal from the decision of a judge of the High Court on appeal from the Circuit Court. Nonetheless, the two proceedings are inextricably related in a number of ways. An order was made by the High Court that the two proceedings be heard simultaneously. The parties agreed that the evidence given at the hearing of the Circuit Court Appeal would be considered to be evidence in the constitutional action. The learned judge decided that the order in the Circuit Court Appeal would not be made up, pending the decision in these proceedings, in which the compatibility of the legislation with the Constitution is in issue.

3

3. Furthermore, the learned judge declined, in the course of his judgment in the Circuit Court Appeal, to decide an important issue of interpretation of the legislation in the light of the Constitution, the double-construction rule. He gave as his specific reason that there was a separate challenge to the constitutionality of the legislation. In the event, the question of the interpretation of the legislation in accordance with the presumption of constitutionality and the double-construction rule was not addressed in the course of the constitutional action.

4

The way in which the constitutional action came to be heard in succession to the Circuit Appeal produces an unusual situation. The High Court declined to decide an important issue of interpretation in the Circuit appeal, because of the pending the hearing of the constitutional action, but did not address it at all in the latter proceeding. In the ordinary way, a single judgment of the Court is delivered where the Court decides a question as to the validity of a law having regard to the provisions of the Constitution: see Article 34, section 4.5. That rule does not apply to a decision on a question of interpretation of legislation. For reasons which I will explain, I am delivering my own individual judgment, not on the validity of the laws in question but on their interpretation.

5

5. In addition, I must make it clear from the outset that no appeal lies from the High Court decision in the Circuit Court Appeal. The consequences, if any, for that proceeding of anything said by this Court is a matter for the parties and for Peart J and not for this Court. I say this, because this Court must interpret the legislation, insofar as that is possible, in a manner which renders it compatible with the Constitution. The Court will decide questions of constitutionality only when it is not reasonably possible to interpret the impugned legislation harmoniously with the Constitution. That may lead the Court to adopt an interpretation which conflicts with that adopted by the High Court, but it does not, by doing so, perform an appellate function insofar as the Circuit Court Appeal is concerned.

The facts
6

6. The first-named respondent is seeking to acquire the fee simple title to premises on the west side of Main Street, Carrickmacross, County Monaghan. The premises are part of the Shirley Estate, whose title traces back to the early seventeenth century. The landlord's interest has been vested since 1984 in the second-named appellant, a company registered in the Isle of Man. The first and third named appellants are shareholders in that company and are joined for the purpose of invoking the constitutional provisions concerning the protection of property rights. The learned trial judge accepted that the plaintiffs had standing to bring the action in the light of the judgment of Keane J. (as he then was) in Iarnrod Eireann v. Ireland [1996] 3 IR 321. Nothing now turns on that point and I will refer from now on simply to the appellant, meaning the second-named appellant.

7

7. The...

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