The Gazette 1983

GAZETTE

JULY/AUGUST

1983

precluding the Arbitrator from awarding

compensation.

The Court held: It was clearly

demonstrated that if the Undertaking to

grant Permission were to be equated to a

grant of permission, it would not be

possible to give the expression a sensible

construction consistent with the other

provisions and regulations ofthe Planning

Acts. The function of the Court when

presented with the statutory requirements

of the Oireachtas is to accept them, inept

though they may be, and so far as possible

to give them effect in a sensible manner in

accordance with the manifest intention of

the statute as shown by its provisions.

It is not intended that the Undertaking

to grant Permission, is to be equated to a

grant of Permission, nor is it necessary

that they should be equated. Section 57

can be construed despite the demon-

strated weakness of expression, and can

only be construed as meaning that Section

57 precludes an award ofcompensation to

a Claimant, such as the Claimant in this

case, who has land capable of being

developed in a manner indicated in sub-

section 4 of Section 57 if the Planning

Authority expressly states that it under-

takes that it will grant permission for some

such development. Accordingly, the

questions submitted by the Arbitrator

were answered to the effect that the

Respondents had power to and did give a

valid Undertaking, that the Undertaking

was in force for the purposes of Section 57

and was given in time to preclude the

Arbitrator from awarding compensation

as aforesaid.

Ignatius Byrne

Dublin Co. Council.

(High Court (per Gannon J.) — 29 July

1982 unreported.

William Dundon

CONTRACT — INSURANCE

Fire — building destroyed — no

reinstatement clause In policy. Whether

insured entitled to indemnity against

loss or cost of reinstatement —

negotiations presumed to be conducted

on basis of brokers knowledge of policy

conditions.

The Plaintiff Company entered into

associated Contracts of Insurance in

respect of property situate at Maxwell

Street, Glasgow, purchased in May 1977,

with other adjoining property, for

approximately £25,000.00. Of this price

£15,000 approximately was apportioned

to the property with which this case was

concerned. Having purchased the

property the Plaintiff employed afirm of

Brokers to arrange to have it insured

against fire risks. The Brokers sought

cover from the second named Defendants

('Provincial') for £30,000.00. By letter

dated 24 May 1977 to the Brokers

Provincial confirmed cover for £30,000

and went on to state "thefloor area of the

building is about 4,000 square feet so that

the total floor area is some 20,000 square

feet. The present sum insured of £30,000

therefore affords a rebuilding cover of

£1.50 per square foot. A realistic figure

should befixed; but please note that whilst

the building remains unoccupied our

maximum acceptance would be £50,000

so that we should expect you to find co-

insurers for the balance above this

amount". The Brokers then approached

the first named Defendant ('Sun

Alliance') and by letter dated 23 June

1977 they wrote to Atlantic as follows:

"Dear Sirs,

Fire Proposal

... St. Albans

Investment Company Limited, 69

Highfield Road, Rathgar. With reference

to your recent conversation with ourMr.

Murphy regarding the premises No. 85

Maxwell Street, Glasgow, we confirm

holding cover for a sum of £250,000 for

Fire Perils only. We understand the

premises will shortly be occupied and we

will then arrange to have the risk

surveyed. As soon as our Surveyors

Report is available we will contact you

again."

During June and July the proprietor of

the PlaintiffCompany consultedArchitects

and Quantity Surveyors for the

preparation of plans for converting part of

the premises into a public house and the

preparation of the necessary documents

for an application for a liquor licence.

Before any Policy was issued and before

any further step had been taken the

property was destroyed by fire dn 15

August. A short time later Policies were

issued by both Defendants in the standard

Policy form which provided for payment

to the insured of the value of the property

at the time of the happening of its

destruction' with an option to the

Company to reinstate the property.

Evidence was given that where the

reinstatement of property is required by

an insured, the Policy will contain what is

described as a "reinstatement clause".

No such clause was contained in these

Policies.

As a result ofthefire the building had to

be taken down at a cost estimated by the

Court at £9,000. The value of the site

after demolition was estimated at

£20,000.00. The Plaintiff claimed

entitlement to the sum of £300,000.00,

the cost of rebuilding being considerably

more than this.

Both Defendants denied that they

insured the premises on the basis of

rebuilding or reinstating them and

evidence was given that such cover was

not sought and that the Policies issued

after the fire were in accordance with the

original agreement between the parties.

They explained the reference to rebuild-

ing in the letter of 24 May 1977 as an

indication to the Brokers that in the case

of partial damage a clause as to "general

average" would apply and that in the case

of partial destruction the Insured would

only recover such proportion ofthe cost of

repair as the total sum insured would bear

to the cost of rebuilding the entire

premises if totally destroyed. They

claimed, therefore, that the Plaintiff was

entitled to compensation only on the basis

of the market value of the premises at the

time of the fire less the site value after

deduction of the cost of demolition. They

relied very strongly on the fact that the

Plaintiff placed its insurance through a

Broker who should have been fully aware

that an agreement to indemnify the cost of

rebuilding would require a reinstatement

clause in the Policy and should have been

fully aware of the application of general

average provisions.

The Court held that on the facts, the

Policies did not cover the cost ofreinstate-

ment. The Plaintiff originally proposed to

insure on the basis of being compensated

for loss in accordance with the value ofthe

property and it is a reasonable proposition

that negotiations must be presumed to

have been conducted on the basis of the

Brokers' knowledge of the position about

reinstatement Clauses. The Plaintiff was

awarded £54,000.00 calculated on the

value of the property at £65,000.00 from

which must be deducted the value of the

site, less the cost of the demolition.

St. Albans Investment Company v. Sun

Alliance & London Insurance Limited

and Provincial Insurance Company

Limited.

The High Court (per McWUliam

J.) 30 April 1982 — unreported.

Franklin J. O'Sullivan

CONSTITUTIONAL/

ADMINISTRATIVE LAW

Constitutionality of Sections 29 and 30,

Turf Development Act, 1946 —

Articles 40 and 43 — Compulsory

Acquisition — Natural and Con-

stitutional Justice.

In November, 1978 Bord Na Mona

(BNM) published advertisements in the

newspapers indicating their intention to

acquire certain lands, including 132 acres

the property of the Plaintiff, pursuant to

their powers under Section 29 and 30 of

the TurfDevelopment Act, 1946. Section

29 empowers BNM to acquire land per-

manently or temporarily by agreement or

compulsorily and to acquire various rights

in or over land. Section 30 empowers

BNM prior to agreement on compensation

to enter and take possession of any land or

exercise any right in land. The Plaintiff

objected in writing through his Solicitor on

1 December, 1979. The Plaintiffwith other

affected landowners then wrote to BNM

setting out general objections to the

proposed acquisitions applicable to all the

owners of the lands in question. At a