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GAZETTE
SEPTEMBER 1985
Recent
Irish
Cases
Edited by
Gary Byrne, Solicitor
SOLICITORS
Negligence — Whether following accepted
practice of the Profession defence to a
Claim.
The Plaintiffs engaged the Defendant
to act as their solicitors in a house
purchase transaction. The nature of the
transaction was that the vendors of the
site, who were also a firm of house
builders, entered into an agreement for
the lease of the site and into a building
contract with the Plaintiffs for the
erection of a house on the site. Under the
term of the building contract the
Plaintiffs were obliged to make payments
of £1,000 by way of booking deposit,
£2,500 when the house reached first floor
level, £2,000 when the house reached roof
plate level, £2,500 when the internal
plastering was completed and £1,450 on
completion. The site was part of the lands
comprised in a freehold registered folio.
The Defendants warned the Plaintiffs
of the risk that by making periodic
payments during the course of the
building they were likely to lose them if
the builders became insolvent. They did
not, however, make any searches in the
Land Registry or the Companies Office
with a view to ascertaining if there were
any incumbrances on the builders'
interest in the site. After the Plaintiffs had
paid the builders £8,000 by way of stage
payments the builders went into
liquidation. The site was in fact the
subject of an equitable mortgage effected
by the deposit of the Land Certificate
with a Merchant Bank, which mortgage
was registered as a charge against the
builders in the Companies Office.
The liquidator of the builders was
willing to execute a lease of the site to the
plaintiffs but the Bank sought a payment
of £6,000 before they would release the
site from their incumbrance.
It was argued for the Plaintiffs that the
financial loss incurred by them was
caused by the failure to search for and
discover the charge in favour of the Bank
and that before they were allowed to enter
into a contractual relationship with the
building company the Defendants should
have ascertained the Bank's interest in the
site and warned the Plaintiffs of the
financial risk involved in proceeding with
the transaction when the building
company had not an unincumbered title.
The Defendants having established in
evidence that it was not the practice of
conveyancers at the time to make pre-
contract searches argued that they had
discharged their duty to the Plaintiffs by
following the widely accepted practice of
their colleagues.
The Cou rt HE L D , f o l l o w i ng
O'Donovan
-v-
Cork County Council
[1967] IR 173, that there was an inherent
defect in the common practice and that
the Defendants, if they had given the
matter due consideration, would have
realised that it was incompatible with
their client's interest and (per Walsh J.)
that "no solicitor can permit his client to
purchase lands or to commit himself
irrevocably financially in the purchase or
development of lands unless he has first
of all ascertained whether or not the land
is free from incumbrances". The Court
held the Defendants were therefore
negligent.
Roche
-v-
Peilow - Supreme Court, 17May
1985 - unreported.
John F. Buckley
LICENSING
Issue of Restaurant Certificate for
Licensed Premises — Premises struc-
turally adapted for use and
bona fide
used
as Restaurant — Contained large bar and
snooker room — whether premises were
"mainly" used as a Restaurant.
In November, 1983, the Applicant, a
Company Nominee, applied to the
Circuit Court for an Ordinary Seven
Days Publican's Licence for a premises
adjoining another premises in respect of
which he already held such a licence and,
at the same time applied under the
provisions of Section 12 of the Intoxica-
ting Liquor Act, 1927, as amended, for a
Certificate that the premises were a
Restaurant for the purposes of the
Intoxicating Liquor acts. The Certificate
for an Ordinary Seven Days Publican's
Licence was granted by the Circuit Court
on 6 December, 1983 and the Certificate
that the premises were a restaurant for the
purposes of the Intoxicating Liquor Acts
was granted by the Circuit Court on 29
February, 1984.
The Superintendent of the Garda
Siochana appealed against the Order
granting the Restaurant Certificate on the
grounds that to be entitled to such a
Certificate the entire premises must be
both structurally adapted for a restaurant
and mainly used for such. In this case it
was contended that because a large
portion of the premises consisted of a bar
and the upper floor consisted of a bar and
snooker room with no real restaurant
facilities, it could not be said that the
premises was mainly used as a restaurant.
The premises in question was a two
story building in which a large area of the
ground floor was given over to dining
tables with a substantial bar counter at
one end and a small dance floor at the
other. It was possible to close off portion
of the dining area and the dance floor
from the area containing the bar counter.
The first floor consisted of a room
containing seven snooker tables and a bar
which also served tea, coffee and light
snacks.
It was possible to gain access to the first
floor room without entering the room on
the ground floor. A good restaurant trade
in lunches and evening meals had been
built up on the ground floor and the
restaurant was considered to be the main
part of the business there, particularly in
the tourist season. The Restaurant Certi-
ficate was required to enable the
Applicant to apply for Special Exemption
Orders as there was a demand in the area
for function, which would avail of such
exemptions.
The Court reviewed the relevant
legislation and went on to consider the
effect of the word "mainly" as it is used in
Section 12 of the 1927 Act.
Section 1 of the Intoxicating Liquor
Act, 1927 defines an on-licence as a
licence for the sale of intoxicating liquor
for consumption on or off the premises.
S. 12 of the same Act provides, that
where on occasion of any Application for
a new on-licence or a Certificate for the
Transfer or renewal of an on-licence, the
Applicant requests the Court to certify
that the premises in respect of which the
Certificate is sought are a restaurant for
the purposes of the Act, the Court, if
satisfied, after hearing the officer in
charge of the Garda Siochana for the
Licensing Area, that such a premises are
structurally adapted for use
bona fide
and
mainly used as a restaurant, refreshment
house or other place for supplying
substantial meals to the public, shall
grant such person a Certificate (in the
section referred to as a Restaurant
Certificate) certifying that such premises
are a restaurant for the purposes of the
Act.
S.5 of the Intoxicating Liquor Act,
1927 as amended by s.6 of the 1943 Act is
the section which provides that the holder
of an on-licence for premises which are a
hotel or restaurant may obtain from the
District Justice a Special Exemption
Order.
The High Court in dealing with the use
of the word "mainly" in s. 12, was of the
view that it had to be construed in the
context that a person can only apply for a
Restaurant Certificate if he is already the
holder of an on-licence or is applying for
one. Therefore the presence of a bar,
unless it is out of all proportion to the
restaurant area, should not restrict the
right to obtain a Restaurant Certificate.
Although on a literal interpretation of the
Section, the presence of the snooker room
upstairs would preclude the Court from
holding that the premises were used
mainly as a restaurant, the fact that the
snooker room is open only from 5 p.m. to
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