The Estate of Maxwell Close

• Jurisdiction: Ireland
• Judge: Meredith, J.
• Judgment Date: 13 January 1905
• Court: Chancery Division (Ireland)
• Date: 13 January 1905

In the Matter of the Estate of Maxwell Close.

Meredith, J.

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.

1905.

Landlord and tenant — Land Purchase Acts — Redemption of superior interests — Date at which value is to be ascertained — Variable rent — Circumstances to be considered.

C. sold to his tenants his estate, which was held under a perpetuity grant from Trinity College, Dublin, subject to a rent of £1836, for £52,423. Under the provisions of the Trinity College, Dublin, Leasing and Perpetuity Act, 1851, this rent was variable every ten years, in accordance with a scale of prices laid down in the Act; but at the time of the sale there was no present probability of a variation. After payment of outgoings C. had had a profit rent of £117. The tenants' rents were practically second term judicial rents. C. applied to have the redemption price of the perpetuity rent fixed. Evidence was adduced as to the market value of head rents:—

Held, applying the principles laid down in In re Leader's Estate ([1904] 1 I. R. 368) and In re Kemmis' Estate ([1904] 1 I. R. 496), and taking into consideration all the circumstances of the case—including (a) the fact that the rental was a second term rental; (b) the poor law valuation; (c) the price which C. obtained from his tenants; (d) the evidence as to the sale of agricultural rents in Ireland; (e) the value of money; (f) the fact that the redemption was compulsory; (g) the liability of the rent to variation; and (A) the fact that non-payment of the rent would have resulted in a gain to Trinity College, Dublin, through the eviction of C.—that the redemption price should be fixed at £45,000.

Held, further, that (h) was not to be made the measure of the compensation.

Held, further, that the fact that trinity College, Dublin, must utilize the redemption money as an income-producing fund was not a special circumstance to be taken into consideration.

Held, further, that the existence of the indemnity grant to Trinity College, Dublin, under section 39 of the Irish Land Act, 1903, did not diminish the redemption price which Trinity College, Dublin, was entitled to.

Held, further, that the value should be ascertained as at the date of the order attaching claims to the purchase-money, under section 24 (1).

Motion on behalf of the vendor for an order that the yearly perpetuity rent of £1551 1s. 1d., reserved by a grant in perpetuity, dated 31st October, 1855, and made between the Provost, Fellows, and Scholars of the College of the Holy and Undivided Trinity, of Queen Elizabeth, near Dublin, of the one part, and Maxwell Close of the other part (which said rent was in pursuance of the reservation in that behalf contained in the said grant in perpetuity, and, under the provisions of the Trinity College Leasing and Perpetuity Act of 1851, subsequently increased to the yearly sum of £1836 16s. 7d.), and the exceptions and reservations, and other superior interests, reserved by the said grant in perpetuity, other than the exclusive right of mining and taking minerals, and digging and searching for the same, be redeemed, and for an order determining the redemption price thereof.

The lands were held by the vendor under a grant in perpetuity, dated 31st October, 1855, under the provisions of the Trinity College Leasing and Perpetuity Act, 1851, made between the Provost, Fellows, and Scholars of the College of the Holy and Undivided Trinity, of Queen Elizabeth, near Dublin, of the one part, and Colonel Maxwell Close, the grandfather and predecessor in title of the vendor, of the other part, whereby the Provost, Fellows, and Scholars of the said College granted to Maxwell Close, his heirs and assigns, that portion of the lands for sale in this matter known as the Brootally estate, containing 3249a. 2r. 16P. statute measure, to hold to Maxwell Close, his heirs and assigns, for ever at the yearly rent of £1551 1s. 1d., or at such increased, diminished, or revised yearly rent or sum as should from time to time hereafter be substituted for the said reserved rent, in pursuance of the Trinity College, Dublin, Leasing and Perpetuity Act, 1851, payable on the 1st May and 1st November.

It appeared by a recital in the grant of 1855 that the rent of £1551 1s. 1d. included the sum of £122 10s. 7d., the amount of rentcharge in lieu of tithe payable by Trinity College out of the lands.

By section 12 of the Act it is provided that it should be lawful for the College or the grantee, during the continuance of the estate conveyed by such grant, to require each of the other, by notice in writing, at any time within twelve calendar months next after the expiration of ten years, to be computed from the 1st May next preceding the execution of such grant, to have the average prices of certain commodities, respectively, for the said period of ten years inquired of and ascertained, as provided by sect. 14, and then the amount of such annual rent should be increased or diminished by the College in such manner and to such extent, that each component part (according to the proportion mentioned in section 11) of such rent to be payable during the next succeeding ten years, should bear the right proportion to the same component part of such rent reserved out of the lands in the original grant, as the average price of the commodity representing and regulating such component part of the rent should bear to the standard price of the same commodity set forth in schedule B to the Act, as set forth in the example mentioned in the schedule; and so in like manner at each subsequent period of ten years the rent to be payable for the next ensuing ten years was to be ascertained; and that a certificate should thereupon be executed by the College, setting forth the amount of such reserved or new annual rent; and such revised annual rent should be payable for a period of ten years, commencing from the 1st May before the application for a revision. It was provided that if upon any such revision the differences of prices so ascertained should not be such as to cause an increase or diminution equal to at least one-tenth of the rent (exclusive of rentcharge and interest, if any, on unpaid fines) then payable under such grant, no variation should be made in the rent payable for the next succeeding ten years.

By section 11 the rent was to be ascertained by the prices of the following commodities, and in the following proportion:—oats should be taken to represent five-eleventh parts of the rent; wheat and mutton, one-eleventh part each; and beef and butter two-eleventh parts each. Sect. 14 provided for the ascertainment of the average prices, from official returns if any; and where there were no official returns of prices, by arbitrators, who were to ascertain the average prices of the several commodities in not less than the ten principal towns in Ireland, or those containing the greatest population; and the average prices in such towns were to be taken as the average prices of the commodities for the purpose of the Act.

By a certificate, dated 21st April, 1866, it was certified that the rent to be payable from the 1st May, 1865, should, until the same should be again increased or diminished under the provisions of the Act, be the sum of £1836 16s. 7d., being the sum of £1714 6s. for rent, and £122 10s. 7d., tithe rentcharge.

That rent had not been varied since. It was stated, in an affidavit of the vendor, that the average prices for the present period would only justify an increase of 13 per cent. on the rent reserved in the grant of 31st October, 1855 (the increase in 1865 having been 20 per cent.), and so, as the difference in prices would not cause a diminution of 10 per cent., no variation could take place at present. The vendor sold his estate to the tenants for the sum of £52,423. The rental was practically a second term rental.

The purchase-money was paid into the Bank of Ireland, and the order attaching claims pursuant to section 24 (1) of the Irish Laud Act, 1903, was made, on the 4th of August, 1904. The vendor, in his affidavit, stated the facts and figures of the estate and purchase-money, which are referred to in detail in the judgment.

On behalf of the vendor an affidavit by Mr. Frank L. North was filed, paragraph 2 of which is referred to in full in the judgment. In paragraph 3 he stated that the result of his experience was that buyers who invest their money in head-rents look for a return of at least 4 per cent., that is, twenty-five years' purchase; and to obtain that rate of purchase it was necessary that there should be a margin of at least two or three times the amount of the rent; and that when the margin was less, the price obtained fell in proportion; and that it was only in very exceptional cases where the security was very ample, or where the purchaser bought for sentimental reasons, that more than twenty-five years' purchase was given. In the schedule to his affidavit he set out the particulars of several head-rents sold by him by auction during the preceding five years. On behalf of the vendor an affidavit of Maurice Dinneen was filed referring to head-rents sold in the estate of Thomas Connolly and the estate of Townsend Mundy; also an affidavit of Mr. Henry J. Synnott, solicitor, referring to the estate of Mr. Henry Bruce Armstrong, also held under a perpetuity grant from Trinity College, in which estate the redemption price of £190, an apportioned part of a rent of £1121, was fixed by Mr. Justice Meredith at £4000, and an affidavit by Mr. M. C.O'Meara, setting out that a fee-farm rent of £75 6s. was, in November, 1904, sold by public auction for £1730, and 5 per cent. auctioneer's fees.

On behalf of Trinity College affidavits by, amongst others, Mr. Joseph Hume Dudgeon and Mr. William M. Battersby were filed. Mr. Dudgeon, in the schedule to his affidavit, referred to the amount of...