Timothy McCarthy v The Electricity Supply Board

• Jurisdiction: Ireland
• Judge: Mr. Justice Brian O'Moore
• Judgment Date: 16 July 2021
• Neutral Citation: [2021] IEHC 501
• Court: High Court
• Docket Number: [2020/1071 SS]

Between

Timothy McCarthy

Claimant

and

The Electricity Supply Board

Respondent

[2021] IEHC 501

[2020/1071 SS]

THE HIGH COURT

Case stated – Unconditional offer – Acquisition of Land (Assessment) of Compensation Act 1919 s. 5(1) – Property Arbitrator directed to state a special case on a question of law – Whether a letter constituted a valid unconditional offer for the purposes of s. 5(1) of the Acquisition of Land (Assessment) of Compensation Act 1919

Facts: The respondent, the Electricity Supply Board (the ESB), on the 21st of March 2016, served a wayleave notice on the claimant, Mr McCarthy, pursuant to s. 53 of the Electricity (Supply) Act 1927. Mr McCarthy submitted a claim for compensation to the ESB on the 9th of September 2016. On the 24th of September 2016 Mr McCarthy sought the appointment of a property arbitrator to assess the level of compensation. Mr Boyle was nominated to act as the Property Arbitrator in this dispute on the 21st November 2017. On the 8th of February 2017 the ESB made an offer to Mr McCarthy, in writing. This offer was not accepted by Mr McCarthy. By letter dated 21st of June 2017, the ESB made a further offer to Mr McCarthy. The hearing before the Property Arbitrator (to include evidence and submissions) took place on the 29th of June 2017, the 30th of June 2017, the 11th of September 2017, the 25th of September 2017 and the 26th of September 2017. On the 4th of January 2018, the Property Arbitrator awarded Mr McCarthy the sum of €65,102.50 in compensation. The sum offered by the ESB in the letter of the 21st of June 2017 in respect of compensation was higher than the sum ultimately awarded by the Property Arbitrator. By Order of the 18th of January 2019 (and having delivered a reserved judgment on the 14th of December 2018) Quinn J directed the Property Arbitrator to state a special case on the following question of law: “Does the letter dated the 21st day of June 2017 constitute a valid unconditional offer for the purposes of Section 5(1) of the Acquisition of Land (Assessment) of Compensation Act 1919?”

Held by the High Court (O’Moore J) that, having considered the letter of the 21st of June 2017, it was an unconditional offer within the meaning of s. 5 of the 1919 Act. O’Moore J decided that the letter of the 21st of June 2017 was an unconditional offer without deciding the underlying submission made on behalf of the ESB, namely that, where a specific sum is offered unconditionally in respect of the compensation sought by the landowner, there is no need to address issues of costs in the letter of offer. O’Moore J held that, while he had sympathy for that submission as a matter of construction of the subsection, it was unnecessary for him to decide the matter in the light of the views he had formed about the specific objections raised on behalf of Mr McCarthy.

O’Moore J answered the question in the special case stated in the affirmative.

Case stated.

JUDGMENT of Mr. Justice Brian O'Moore delivered on the 16th day of July, 2021.

1 Somewhat surprisingly, prior to the decision of the Supreme Court in ESB v. Gormley [1985] IR 129 the Electricity Supply Board (“the ESB”) was able to exercise a statutory power to place any electric line above or below ground across private land, and to attach to “any wall, house, or other building any bracket or other fixture required for the carrying or support of an electric line or any electrical apparatus” without the private landowner having any statutory right to compensation for these activities. Sometimes these works by the ESB could significantly affect the enjoyment by the private landowner of his or her land. For example, in Gormley the ESB intended to erect an electric line and three electricity pylons on Ms. Gormley's land, and to lop or cut tree shrubs and/or hedges which obstructed or interfered with the electric line or with the erection of the line. While ex-gratia compensation (in an amount determined by the ESB) was available to Ms. Gormley, the Supreme Court held that she had an entitlement to compensation in “an amount assessed by an independent arbiter or tribunal”. The fact that the ESB had agreed rates of ex-gratia payment with the Irish Farmers Association was no substitute for an entitlement to statutory compensation, independently assessed and taking into account the circumstances of each case.

2 The Oireachtas acted quickly to pass amending legislation, and the Electricity (Supply) (Amendment) Act 1985 introduced such a statutory entitlement. Section 53 of the Electricity (Supply) Act 1927 provided the ESB with the power to require that electric lines be placed across land, including private land. Section 53(5) of the 1927 Act was amended by the 1985 Act, to read as follows:-

“(5) If the owner or occupier of such land or building fails within the seven days aforesaid to give his consent in accordance with the foregoing subsection, the Board or the authorised undertaker with the consent of the Board but not otherwise may place such line across such land or attach such fixture to such building in the position and manner stated in the said notice, subject to the entitlement of such owner or occupier to be paid compensation in respect of the exercise by the Board or authorised undertaker of the powers conferred by this subsection and of the powers conferred by subsection (9) of this section, such compensation to be assessed in default of agreement under the provisions of the Acquisition of Land (Assessment of Compensation) Act, 1919, the Board for this purpose being deemed to be a public authority.”

3 The 1919 Act, to which Section 53 (5) of the 1927 Act (in its amended form) refers, is a very brief piece of legislation by modern standards. Including the provisions applying the Act to Scotland and Ireland, and the commencement and interpretation provisions, it runs to twelve sections.

4 Section 2 of the 1919 Act set out the rules for the assessment of compensation:-

“2. In assessing compensation, an official arbitrator the assess- shall act in accordance with the following rules:-

• (1) No allowance shall be made on account of the acquisition being compulsory

• (2) The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: Provided always that the arbitrator shall be entitled to consider all returns and assessments of capital value for taxation made or acquiesced in by the claimant:

• (3) The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any Government Department or any local or public authority: Provided that any fide offer for the purchase of the land made before the passing of this Act which may be brought to the notice of the arbitrator shall be taken into consideration:

• (4) Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, or is detrimental to the health of the inmates of the premises or to the public health, the amount of that increase shall not be taken into account

• (5) Where the land is, and but for the compulsory acquisition would continue to be, devoted to a purpose of such a nature that there is no general demand or market for land for that purpose, the compensation may, if the official arbitrator is satisfied that reinstatement in some other place is bonâ, fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement:

• (6) The provisions of Rule (2) shall not affect the assessment of compensation for disturbance or any other matter not directly based on the value of land.

For the purposes of this section an official arbitrator shall be entitled to be furnished with such returns and assessments as he may require.”

5 Section 6 of 1919 Act provides for the finality of the award of the Official Arbitrator but also enables (and occasionally requires) the Official Arbitrator to state a special case for the opinion of this Court. Section 6 reads as follows:-

• “6.—(1) The decision of an official arbitrator upon any question of fact, shall be final and binding on the parties, and the persons claiming under them respectively, but the official arbitrator may, and shall, if the High Court so directs, state at any stage of the proceedings, in the form of a special case for the opinion of the High Court, any question of law arising in the course of the proceedings, and may state his award as to the whole or part thereof in the form of a special case for the opinion of the High Court.

• (2) The decision of the High Court upon any case so stated shall be final and conclusive, and shall not be subject to appeal to any other Court.”

6 In fact, of recent times there has been a spate of decisions requiring a number of arbitrators to state cases to this Court on a variety of issues arising during the course of proceedings before those arbitrators. They include the following:-

• (i) ESB v. Good & Kelleher (Quinn J.);

• (ii) ESB v. Boyle & Payne (Twomey J.); and

• (iii) Rossmore Property Ltd. v. Ffrench O'Carroll & ESB (Quinn J.).

7 The current special case is also one which the High Court has directed be stated by Mr. Boyle, the Property Arbitrator in the claim taken by Mr. McCarthy. It concerns solely the operation of Section 5 of the 1919 Act. This section relates to the costs of an arbitration. I will set it out in full:-

• “5.—(1) Where the acquiring authority has made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by an official arbitrator to that claimant does not exceed the...