High Court of Ireland Decisions

Judgment Title: Digital Hub Development Agency -v- Keane & Ors

Neutral Citation: [2008] IEHC 22


High Court Record Number: 2004 168 CA

Date of Delivery: 31 January 2008

Court: High Court

“ALL THAT AND THOSE the heraditaments and premises known as Nos. 10, 11 and 12 Rainsford Street in the Parish of St. Catherine and City of Dublin and more particularly described in an indenture of lease dated the 8th of October, 1958 and made between Arthur Guinness & Son and Company (Dublin) Ltd of the one part and A Millar & Co Ltd of the other part.”

“…all that and those two dwelling houses or tenements together with the ground in the rear thereof known as Nos. 10 and 11 Rainsford Street formally in the possession of the said James Vose together with the liberty of the gateway on the Westside of said houses bounded on the East by the late widowed Downes holding on the West by the late Michael Bardins holding on the North by Goldmans Brook on the South by Rainsford Street containing in breadth in front exclusive of said gateway 37 feet 9 inches and in rear 44 feet and in depth from front to rear 141 feet be the same several admeasurements more or less which said several houses were lately in the tenure or occupation of George Eastwood and also all that and those the dwelling house, tenement and premises known as No.12 Rainsford Street with the liberty of the gateway on the East side of said house, bounded on the East side by the late Thomas Mitchells Holding, on the West by Church ground, on the North by Goldmans Brook and on the South by Rainsford Street containing in breadth in the front to Rainsford Street 25 feet exclusive of the gateway and in the rear 25 feet 6 inches and in depth from front to rear 138 feet be the said admeasurements or any of the more or less which said last mentioned house and premises were formally in possession of Michael Bardin and lately in the occupation of Patrick Adams Dairyman all of which said premises are situated lying and being in the liberties of Thomas Court and Donore in the Parish of St. Catherine in the City of Dublin together with the appurtenances and all rights of way, rights of passing and easements whatsoever belonging thereto or enjoyed therewith…”

“(1) Objection: these respondents claim that the applicant does not hold under a lease as the lease relied upon has been forfeited for breach of covenant by re-entry by the issue and service of proceedings for ejectment.
(2) These respondents await proof that the applicant has succeeded to the tenants’ interest in the lease dated the 8th October, 1958.
(3) The applicant has no legal entitlement to acquire the lesser’s interest by virtue of s. 4 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978.
(4) The applicants are not entitled to acquire the fee simple as they do not comply with the conditions of ss. 9 and 10 of the Act of 1978…”

1. That the appellants were by virtue of s. 4 of the Landlord and Tenant (Ground Rents) (No.2) Act, 1978 precluded from availing of the provisions of that Act and hence the Notice of Intention to Acquire the Fee Simple dated the 14th February, 2003 was invalid.
2. That the appellants did not comply with the conditions of ss. 9 and 10 of the Landlord and Tenant (Ground Rents) (no 2) Act, 1978 [the Act of 1978] and hence were not entitled to acquire the fee simple.
3. That in the event that the court should hold that the appellants were entitled to acquire the fee simple that the County Registrar had erred in the computation of the purchase price in failing to have regard, pursuant to s. 7(3)(d) of the Landlord and Tenant (Amendment) Act, 1984, [the Act of 1984] to the development value or potential of the premises.

“4. - This Act shall not bind a Minister of the Government, the Commissioners of Public Works in Ireland or the Irish Land Commission.”

4. - (1) This Act shall not bind -
(a) a Minister of the Government,
(b) the Commissioner of Public Works in Ireland,
(c) Industrial Development Agency (Ireland),
(d) Shannon Free Airport Development Company, or
(e) Udarás na Gaeltachta.
(2) Subsection (1) is in addition to any other enactment imposing a restriction on the application of this Act.”

“9. - (1) This Part applies to a lessee who holds land under a lease, if the following conditions are complied with:
(a) that there are permanent buildings on the land and that the portion of the land not covered by those buildings is subsidiary and ancillary to them;
(b) that the permanent buildings are not an improvement within the meaning of subsection (2);
(c) that the permanent buildings were not erected in contravention of a covenant in the lease; and
(d) one of the alternative conditions set out in s. 10.
(2) In subsection (1)(b) “improvement” in relation to buildings means any addition to or alteration of the buildings and includes any structure which is ancillary or subsidiary to those buildings, but does not include any alteration or reconstruction of the buildings so that they lose their original identity…”

“10. – The following are alternative conditions one of which must be complied with in a case to which section 9 relates:
1. that the permanent buildings were erected by the person who at the time of the erection was entitled to the lessee’s interest under the lease or were erected in pursuance of an agreement for the grant of the lease upon the erection of the permanent building;
2. that the lease is for a term of not less than fifty years and the yearly amount of the rent or the greatest rent reserved thereunder (either redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of services under section 4 of the Act of 1967 of notice of intention to acquire the fee simple or the date of an application under Part III of this Act, as the case may be, and that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title:
provided that it shall be presumed until the contrary is proved, that the buildings were not so erected;
…
5. that the lease was granted, either at the time of the expiration or surrender of a previous lease or subsequent to such expiration or surrender –
(a) at a rent less than the rateable valuation of the property at the date of the grant of the lease, or
(b) to the person entitled to the lessee’s interest under the previous lease,
provided that the previous lease expired or was surrendered before the 31st day of March, 1931 and that it would have been a lease to which this Part applied had this Act then been in force and provided that it shall be presumed, until the contrary is proved, that the person to whom the lease was granted was so entitled;
6. that the lease is a reversionary lease granted on or after the 31st day of March, 1931 to a person entitled thereto under Part V of the Act of 1931 or the Act of 1958, whether granted on terms settled by the Court or negotiated between the parties;…”

A starting point in an analysis of the history of the buildings that stood on the lands demised as Nos. 10, 11 and 12 Rainsford Street is the recital in the Memorial of the Deed of 1860. Insofar as No.12 is concerned as, quoted above this premises was described as “ALL THAT AND THOSE the dwelling house, tenement and premises”. Nos. 10 and 11 are similarly described in the Memorial.

The 1847 ordinance survey map was put in evidence. Although this map is dated as of 1847 the evidence was that it described the picture on the ground as of 1838. The earliest reliable survey of property in this part of the city was agreed in evidence to be John Rocques Survey of 1756. The picture demonstrated on this map insofar as the buildings at Nos. 10, 11 and 12 Rainsford Street now fronting onto the street are concerned is by and large similar to that shown in the 1847 Ordinance Survey. Undoubtedly there are changes towards the rear of these properties. A feature of the 1847 Ordinance Survey map is it that it shows steps leading to the fronts of Nos. 10 and 11 but no steps at the front of No. 12. The valuation records for 1853 for these properties described No. 10 as house and yard in common, no. 11 as house and rooms over gateway and no. 12 as house and yard. There is a no. 11a which is described as a dairy yard.

It is apparent thereafter that significant change occurred in the nature of these properties. As of November 1863 the valuation record describes No. 10 as dilapidated and Nos. 11 and 12 as offices and yards. It is clear from the later Ordinance Survey Maps, that is to say the 1864 map, the 1887 map and the 1908 map, that considerable development took place on the site of these three properties thereafter. The 1864 map shows a long building where No. 12 was, extending right to the back of the site and indeed continuously on towards Thomas Street. Behind Nos. 10 and 11 there is also a new structure extending a considerable way back into the site. An L-shaped structure which is present on the 1847 map behind Nos. 10 and 11 and partially behind No. 12 has been removed. The 1887 map demonstrates that the building behind Nos. 10 and 11 has been extended back further into the site and part of a building extending back from Thomas Street encroaches into the site. The 1908 map demonstrates further development with the filling in of a gap between a long building at No. 12 and Nos. 10 and 11. The 1926 Ordinance Survey shows no change to that of the 1908 survey. The 2007 Ordinance Survey map demonstrates considerable change with a removal of all of the buildings where Nos. 10 and 11 stood and the presence of a new building, apparently built after 1979, a corner of which extends into the site occupied by 10, 11 and 12.
All of this development was carried out by Adam Millar or his Company who engaged in the business of rectifying distillers, together with other commercial enterprises over many years. This business would appear to have been conducted primarily from premises which fronted onto Thomas Street and the buildings developed on the site of Nos. 10, 11 and 12 Rainsford Street appear to have been developed as part of the enterprises conducted by Adam Millar or his Company.
The buildings which now stand on this site are, for convenience, divided into four parts described as A, B, C, and D. Building A is that part of No. 12 which fronts on to Rainsford Street. Building B is the block immediately behind this and building C is the block immediately behind building B. Building C extends onwards beyond the site and is part of the buildings extending backwards from Thomas Street. Building D is at the corner of a structure which was built post 1979 and is a warehouse type building used by Lee and Company for the purposes of a cash and carry business.
As far as the provenance of building C is concerned there was little or no controversy. I am satisfied from the evidence that this building was built between 1900 and 1910. The structure of this building is supported by RSJs and the brickwork is built into the supports and it was uncontested that this type of steel structural arrangement did not become available in Ireland until towards the end of the nineteenth century. More particularly the joinery work used in this building is typical of that used in the period in question, i.e. 1900 to 1910.
Building B can be reliably dated to not earlier than 1880. This is because the building is supported on cast iron columns which bear the manufacturers name, namely “J. Sharkey, Church Street”. This manufacturer was not in business prior to 1879. It is apparent from the evidence that these columns were an integral part of the construction of this building and as a matter of probability if not certainty were part of the original construction of the building rather than some later addition.
All the controversy in the evidence centred on building A.
Before dealing in particular with this I should observe that it was clear from the evidence, and indeed there was no contest on this, buildings A, B and C were part of an integral whole, in that the floors ran uninterrupted between all three and were all at the same level and the load bearing capacity of the floors was roughly similar throughout and this load bearing capacity was significantly greater than normal domestic loading but was well below normal industrial warehousing capacity, but may have been adequate and suitable for the particular enterprise carried on there.
I am satisfied from the records mentioned above that when the lease of this building was granted in 1860 No. 12 Rainsford Street was a dwelling house. There may indeed have been some form of lean-to structure in the rear garden of it but no more. It is quite clear from the evidence that the structure which is there now could never have been used as a dwelling and has absolutely none of the attributes of a dwelling house.
The façade of No. 12 onto Rainsford Street is particularly interesting. Mr. Myles, the expert witness called by the appellants, was adamantly of the view that this façade was built well before 1860. He placed particular emphasis on a finding by him of bricks at the side of No. 12 where the archway into the rear was, which he said, dated from an earlier period. He also compared the unusual appearance of the façade to some older buildings in that area of Dublin. He was of the view that the brick pattern used, namely the English Garden Wall Pattern, was commonly used in the early part of the nineteenth century.
Mr. Stewart, a conservation architect, gave evidence for the respondents, was of an entirely different view. His evidence was that the façade of No. 12 as it now stands had not been altered or interfered with since its original construction, save that the top storey was added on later, in his opinion after the construction of the Vat house next door by Arthur Guinness and Company. It was his opinion that the brick pattern used, namely the English Garden Wall Pattern, began to be used only in the later part of the nineteenth century and he was of the opinion that the bricks used in the construction of building A were similar to those used in building B. He was also of the opinion that because of the thickness of the walls in building A and in particular of the party wall with the Vat house next door, that building A was built after the Vat house was constructed in or about 1864 or 1865. In general it was his opinion that the thickness of the walls reflected a later period of building rather than early nineteen century or an eighteen century form of construction.
As said earlier the buildings as demonstrated on Rocques map of 1756 broadly correspond with the buildings depicted at Nos. 10, 11 and 12 fronting onto the street in the 1847 Ordinance Survey map. The evidence from Mr. Myles was that Rainsford Street was first laid out in the early years of the eighteenth century and thereafter plots were sold off and developed speculatively.
In my view it is probable that the buildings at Nos. 10, 11 and 12 which were depicted in 1847 were the same buildings as were shown on Rocques map. As indicated earlier when the lease was granted in 1860, Nos. 10, 11 and 12 were described as dwelling house tenements. It is highly probable, in my view therefore, that the buildings which stood on these premises when the lease was granted were old tenement dwellings. Valuation records confirm this insofar as in November 1863 No. 10 is described as dilapidated. It is clear also from these records the use of Nos. 11 and 12 had by then changed from being that of dwellings to office and yard.
It would seem to me to be improbable that the lessor of these premises, Mr. Corles who lived in England, undertook any development of them before granting the 1860 lease. On the other hand, the lessee, Adam Millar, had a substantial business based in Thomas Street and was clearly in expansion mode when he took this lease in 1860. On the balance of probabilities I would be quite satisfied that it was he who undertook all of the redevelopment that occurred on the sites of Nos. 10, 11 and 12 Rainsford Street.
I accept Mr. Stewart’s evidence that the façade of No. 12 on Rainsford Street, that is still there, was never constructed as the façade of a dwelling house and that this façade has not been interfered with since its original construction. It is quite clear that this façade simply bears no relation to that of a dwelling house. The apertures in it at the ground and first floor level are wholly inconsistent with it being a dwelling house. The fact that similar brick was used in construction of building A and building B suggests to me that it is probable that building B was built soon after building A.
I have come to the conclusion that it is probable that the dwelling structure which was on the site of No. 12 in 1860 was at some stage between 1860 and 1880 demolished and replaced with the structure that stands there to-day and that this new structure was built for the purposes of Mr. Millar’s business. It is not entirely clear exactly what was the original use of this building A. The openings to the side of it do suggest that it may have been used for the stabling of horses. This use is further suggested by the rendering on the walls at the lower level. What is absolutely clear, however, is that building A was never a dwelling house, could never have been a dwelling house.
I have come to the conclusion therefore that all of the permanent buildings now on the sites of Nos. 10, 11 and 12 were constructed by the person who was entitled to the lessee’s interest in the property.
This brings me to a consideration of compliance with ss. 9 and 10 of the Act of 1978.
It is quite clear that for the purposes of s. 9(1) that there are permanent buildings on the land and it was not seriously contested but that the portion of the land not covered by buildings was subsidiary and ancillary to these buildings.
The only alteration or addition is building D. Building D is the corner of a much larger warehouse building which extends considerably beyond the boundaries of the sites of Nos. 10, 11 and 12. This building was built after 1979 and a cash and carry business was carried out in it. On the evidence adduced in this case there is no way that this brand new substantial building could be regarded as subsidiary or ancillary to buildings A, B or C. When I speak of the terms “subsidiary and ancillary”, I accept the definition of them set out by Peart J. in the case of A. O’Gorman & Co. Ltd. v. JES Holdings Ltd. (judgment delivered 31st May, 2005) where he says:

“The word ‘ancillary’ when followed by the word ‘to’ is defined as
‘subordinate, subservient’. The former in turn being defined as ‘of inferior importance or rank; secondary, subservient’, and the latter as ‘subordinate’. Clearly there is considerable overlap in these dictionary definitions.
The word ‘subsidiary’ is given the meaning ‘serving to assist or supplement’.
I find it helpful to regard ‘ancillary’ as meaning ‘of lesser importance or subordinate’ and ‘subsidiary’ as ‘serving to assist or supplement’. These meanings seem to me to accord with one’s ordinary usage of terms.”

“35. – Whenever a tenancy is continued or renewed or a new tenancy is created under this Act, in a tenement, such continued renewed or new tenancy shall for the purposes of this Act be deemed to be a continuation of the tenancy previously existing in such tenement and shall for all purposes be deemed to be a graft upon such previously existing tenancy and the interest of the tenant thereunder shall be subject to any rights or equities arising from it being such a graft.”

“(b) where land demised by a lease or held on a yearly tenancy does not on a particular day bear a separate rateable valuation, the Commissioner of Valuation shall have power for the purpose of this subsection to apportion the rateable valuation or valuations of the properties in which the land was comprised on that date and to charge a fee for the apportionment….”

“20. - (1) A county registrar conducting an arbitration under this Act may and, if so requested by any party concerned, shall cause to be sent to the Commissioner of Valuation a request for a valuation, estimate or statement in respect of any particular matter relevant to the determination of the purchase price of the fee simple in land being acquired under this Act or to the apportionment of a rent under this Act and may for the purpose adjourn the arbitration.”

Section 46(1) is in the following terms:
“46. - (1) In this part of the Act the expression ‘building lease’ means a lease in respect of which all the following conditions are complied with, that is to say: -
(a) the land demised by such lease is situated wholly in an urban area;
(b) there are permanent buildings on such land and the portion of such land not covered by such buildings is subsidiary and ancillary to such buildings;
(c) such permanent buildings are not an improvement within the meaning of this Act;
(d) such permanent buildings were erected by the person who at the time of such erection was entitled to the lessees interest under such lease;
(e) such permanent buildings were not erected in contravention of a covenant, condition or agreement contained in such lease.”

“47. – (1) At any time within seven years before the expiration of a building lease, any person in possession of the land or any part of the land comprised in such lease and holding the same under such building lease or under a proprietary lease shall, subject to the provisions of this Part of this Act and obtaining the consent (if any) required by this section, be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease, a reversionary lease on the terms fixed by or under this Part of this Act of the said land so possessed held for him as aforesaid.”

“(3) Subject to the provisions of this section, the purchase price shall be the sum which, in the opinion of the arbitrator, a willing purchaser would give and a willing vendor would accept for the fee simple or other interest at the relevant date having had regard to—
( a ) the rent payable for the land by the person acquiring the fee simple,

( b ) where, at the relevant date, the land is held under a lease which provides for an increased rent payable within fifteen years after that date, the amount of that increase and the time when it becomes payable,

( c ) the current interest yields on securities of the Government issued for subscription in the State,

( d ) if the land is used for the purposes of business, or exceeds one acre in area and is not used for the purposes of business, the area and nature of the land, its location and user and the state of repair of any buildings or structures thereon,

( e ) the price paid for the fee simple or any other interest in the land on a sale taking place on or after the 22nd day of May, 1964,

( f ) any mortgage or other charge on the interest in the land of any person from whom, mediately or immediately, the person acquiring the fee simple holds the land,

( g ) the costs and expenses which, in the opinion of the arbitrator, would be reasonably incurred by the persons from whom, mediately or immediately, the person acquiring the fee simple holds the land, in investing the purchase money payable in respect of the acquisition of the fee simple,

( h ) the costs and expenses which, in the opinion of the arbitrator, have been incurred by a person acquiring the fee simple who holds the land under a lease by reason of the failure of the lessor to maintain any amenities which he is required to maintain under a covenant in the lease,

( i ) the current price of the immediate lessor’s interest in land held under leases or yearly tenancies similar to the lease or yearly tenancy, as the case may be, under which the land is held by the person acquiring the fee simple, and

( j ) such other matters as are, in the opinion of the arbitrator, relevant to the determination of the purchase price.”