The Gazette 1976

GAZETTE

J UNE /J U LY 1976

RECENT IRISH CASES

Folio 9792 only. Although there were 3 Folios involved in the lands belonging to Tractasales the plain- tiff, in putting up these lands for sale by auction, only mentioned two of them, and forgot to mention Folio 12386, Co. Longford. The auction was held on 26th February, 1974, and the defendant bought the lands for £30,500, and paid a deposit of £7,625. Two further Judgment Mortgages against the lands com- prised in the three Folios were regis- tered by Peter Doggett and Henry Smith before the contract for sale had been signed. After the contract was signed, further Judgment Mort- gages were registered in respect of the lands by Foster Finance Ltd. and the Longford Arms Motor Works Ltd. In buying the premises, the de- fendant thought he could get finance to develop it, but he was unable to do so. As a result of searches in the Land Registry, in January, 1975, he discovered the existence of the mis- sing Folio 12386 relating, to the lands. There was a meeting at the Four Courts on 18th March, 1975 when the defendant refused to close the sale unless £4,500 was paid to him immediately. The plaintiff re- fused to comply, and proceeded with his action for specific performance to carry out the terms of his contract. Finlay P. duly dismissed this action, mainly because he thought that the title shown by the plaintiff would involve the defendant in litigation with the post-contract judgment mortgages. It was contended on behalf of the plaintiff that, when the contract for sale was signed, that Tractasales be- came a Trustee for the defendant, who became the owner of the whole beneficial interest in the lands. Con- sequently Tractasales could not own any estate or interest on which the two judgment mortgages of Foster Finance and of Longford Motor Works could operate. The position is that a vendor who signs a contract with a purchaser for the sale of land becomes a trustee to the extent that he is bound to take reasonable care of the property until the sale is com- pleted. However the vendor becomes a trustee of the beneficial interest merely because he signs a contract. Consequently, until the whole pur- chase money is paid, the vendor has a beneficial interest in the land which may be charged by a Judgment Mortgage. Furthermore, when a contract for sale has been signed, the vendor becomes a trustee of the beneficial interest only to the extent that the purchase money has been paid. This contention is therefore 21

and The Holiday Motor Inns Ltd., the order had not become operative. In the latter proceedings, the High Court, on February 19th, 1975, suspended the operation of the order, on the application of the Council, insofar as it affected the property belonging to Mr. Fuller and The Holiday Motor Inns. These proceedings were later dismissed, by consent. Arbitrator sought Mr. Justice McMahon said that on April 14th, 1975, the Council served a second notice to treat on Green Dale Building Co. Ltd. who, in the meantime, asked to have an Arbitrator appointed. At the subsequent inquiry, Green Dale Building Go. Ltd. made the case that the value of the lands for the purpose of determining com- pensation should be taken at the time when the first notice to treat was served. Mr. Justice McMahon held that the services of the first notice to treat was not merely irregular but ultra vires the powers of the County Council which could not, by serving such notice before the order had be- come operative, make itself liable to pay compensation based on the value of the land at that time. As a statutory body with limited powers, the Council could not be bound by estoppel to do what was ultra vires its powers, or to refrain from doing what it was its duty to do, and therefore it could not be estopped from relying on the invalidity of the first notice to treat. Accordingly, he held that the relevant time was April 14th, 1951. The Court made no order as to costs. Fuller and Holiday Inns Ltd. v. Green Dale Building Go. Ltd. — McMahon J. — unreported — June 1976. VENDOR AND PURCHASER Sale of registered land subject to registered judgment mortgages— Conditions under which order for specific performance will be granted. The complicated facts of this case were stated in the December Gazette, 1975, at page 297. It will be re- called that the plaintiff Tempany, was the receiver of two debentures, the first one of September, 1949 between Tractasales (Longford) and United Dominions Trust which re- lated solely to a loan of £25,000 in respect of the lands contained on

COMPULSORY PURCHASE High Court says property firm should be paid lower compensation for compulsory purchase. In a reserved judgement in the High Court Mr. Justice McMahon held that the compensation to be paid to a Dublin firm of developers in respect of lands in the Bray road area acquired by Dublin County Council should be deter- mined in relation to an order served on the developers on April 14th, 1975—not in relation to an earlier compulsory purchase order served on December 14th, 1972. The effect of the judgment is that the company, Green Dale Building Company Ltd., of Burlington Road, Dublin, is to be paid £60,000 com- pensation instead of £90,000 com- pensation as would have been the case under the earlier order. The matter came before the Court by way of a case stated by Mr. Owen McCarthy, BE, who had acted as arbitrator, and who asked the Court to determine which com- pulsory purchase order he should act upon. The lands are situated at Galloping Green South. Mr. Justice McMahon said that the value of the land which was sub- ject to a compulsory purchase order had been falling since the order was confirmed in 1972, thereby giving rise to a dispute as to the proper time for assessing compensation. The order, under the 1966 Housing Act, had been made by the County Council on November 11th, 1968, and was confirmed, with amend- ments, on August 25th, 1972. Within the statutory three weeks, Mr. William Fuller and The Holi- day Motor Inns Ltd., owners of part of the property affected, instituted High Court proceedings, claiming that the order was invalid in its en- tirety or, alternatively, insofar as affected their property. The Green Dale Building Co. Ltd. did not question the validity of the order and, on December 14th, 1972, the County Council served what purported to be a notice to treat on the company. The com- pany's case was that the compensa- tion payable was to be based on the value of the land at the time when this notice was served. Mr. Justice McMahon said that the County Council contended that it was not a valid notice because by reason of the pending proceedings in the High Court by Mr. Fuller