The Gazette 1982

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INCORPORATED LAW SOCIETY OF IRELAND GAZETTE \c
J r J f e •
4
Vol. 76 No. 6 July/August 1982
In this issue...
Executive Editor: Mary Buckley
Editorial Board: Charles R. M. Meredith, Chairman
John F. Buckley
Gary Byrne
William Earley
Michael V. O'Mahony
Maxwell Sweeney
Advertising: Liam Ó hOisin, Telephone 305236
The views expressed in this publication, save where
other-wise indicated, are the views of the contributors
and not necessarily the views of the Council of the
Society.
Published at Blackhall Place, Dublin 7.
Comment.. . Gallagher Bonds
ANEW difficulty for house owners and builders or
buyers of new houses on building estates owned by or
developed under Licence from Gallagher Group Com-
panies has now emerged, in that there may be no funds
available to secure the satisfactory completion and main-
tenance of the roads, footpaths and services on such
estates. It has been the practice in certain areas and in
Dublin City and County in particular, for Planning
Authorities to insert conditions in planning permissions
requiring the developer to lodge with the Planning
Authority "a cash deposit, a bond of an insurance
company, or other security to secure the satisfactory
completion and maintenance of roads and services until
taken in charge by the Local Authority". The practice has
been for bonds to be provided by insurance companies or,
more frequently, by the Construction Industry Federation.
This system appears to have worked reasonably well,
apart from complaints that inflation has eroded the value
of the security.
In the case of certain Gallagher Group estates, it
appears that Dublin County Council, in particular, has
accepted as security the deposit of monies with Merchant
Banking Limited, a company within the Gallagher Group,
now in liquidation. It is understood that Merchant Banking
Limited is seriously insolvent and that the value of any
deposit receipts issued by that Bank is extremely dubious.
Many innocent house owners and builders, operating
under licence from Gallagher Group Companies, now find
their houses difficult to sell.
It has been suggested that the Local Authority was
negligent in permitting the deposit to be made by a
Gallagher Group Company with a Bank which was also a
member of the Group of Companies; it has even been
supposed that persons who relied on letters issued by the
Planning Authority confirming the existence of such a
deposit as compliance with the appropriate condition in a
Planning Permission may have an action for negligence
against the Local Authority in respect of any loss which
they may suffer, under the "Hedley Byrne v Heller and
Partners" doctrine, recently extended to Local Authori-
ties by the High Court of Australia in the "Shaddock and
City of Parramatta" Case (High Court of Australia 28
October 1981, unreported). It is to be hoped that it will
not be necessary for this to be tested in the Irish Courts.
There must be a very strong argument for requiring
Local Authorities to meet the necessary costs of complet-
ing the roads and services on such estates, on the ground
that they represented to all enquiring parties that the
appropriate condition in the Planning Permission had
been complied with. In some cases, this may put a very
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