Irish Court of Criminal Appeal

Judgment Title: Smith -v- Nardone

Neutral Citation: [2009] IECC 2


:

Date of Delivery: 13 July 2009

Court: Circuit Court

This is an Appeal from the Decision of Brigid McCaffrey, Registrar of Titles (as Arbitrator) of the 5th day of June, 2007 granting the right to the Respondents Raymond Nardone and Claire Nardone to acquire the Fee Simple in the property at Inglewood, Mill Lane, Leixlip, Co. Kildare. A Notice of Motion was issued on the 16th July, 2007 originally returnable for the 18th October, 2007. . An outline of Appeal was filed by the Appellant, which set out the Grounds of Appeal.

The appeal was heard at Naas Circuit Court on the 20th May, 2009. The Court heard sworn evidence from Claire Nardone, Declan McKeown,Legal Submissions and Judgement was reserved.

TITLE TO THE SUBJECT PROPERTY
The Respondents acquired the property for valuable consideration by Indenture of Conveyance of Fee Farm Grant made on the 25th day of August, 2000. The Root of Title was an Indenture of Fee Farm Grant dated the 1st day of February, 1972 and made between Mary Stewart Lyle of the One Part and James McLaren Smith and Lila Hepburn Smith of the Other Part. The property was conveyed to the Respondents subject to the covenants in the said Fee Farm Grant.

The Fee Farm Grant of the 1st February, 1972 conveyed a plot of ground comprising 2 roods and 38 square perches statute measure delineated on a Map attached to the said Grant, with a specific covenant that the Grantees would erect a bungalow type dwellinghouse.

Paragraph 4 of the said Fee Farm Grant states

“that the Grantees will not at any time without the licence in writing of the Grantor first had and obtained, erect or suffer to be erected any buildings on the piece or plot of land hereby granted or make any alterations or additions whatsoever in or to the buildings which may be erected pursuant to the foregoing covenants or with such licence as aforesaid or make any alterations in any boundary wall”.

FINDINGS OF FACT
For the purpose of determining the issues between the parties, the Court has to determine issues of fact.

An Bord Pleanala by Planning Register Reference Number 03/419 granted Planning Permission to the Respondents for the construction of a terrace of three No. 2 bedroom and one No. 3 bedroom dormer dwellings and associated site works at the subject property Inglewood, Mill Lane, Leixlip, Co. Kildare. Construction work at the property in respect of these four dwellinghouses commenced on the 9th April, 2005. The Respondents had not sought Permission pursuant to the Fee Farm Grant, to erect these dwellinghouses. The Appellant was an objector to the proposed development. At the time of the commencement of the construction work, both the Appellant and the Respondents were not aware of the covenants set out at Paragraph 4 of the original Fee Farm Grant. Claire Nardone first became aware of the problem on the 12th May, 2005 from her then Solicitors Niall O’Brien & Company. The Appellant also became aware of the covenant. There was contact between Claire Nardone and the Appellant both directly and through Solicitors, for the purposes of acquisition of the the Fee Simple in the property. There were other issues between the parties in respect of their boundary, which is not relevant to the matters in issue in this Appeal. Construction work on the four new dwellinghouses ceased in or around the 19th May, 2005. Work continued on the construction of a retaining wall, which had to be finished for safety reasons.

Subsequently once the Fee Simple could not be acquired by agreement William Fry, Solicitors for the Respondents served Notice of Intention to acquire the Fee Simple on the 20th October, 2006 pursuant to the provisions of the Landlord & Tenant (Ground Rents) (No. 2) Act 1978.

In the correspondence between the Solicitors for the parties, and also in correspondence with the Land Registry (now the Property Registration Authority), there was a serious dispute as to the condition of the portion of the subject property, on which construction had commenced.

By letter of the 9th November, 2006 from Matheson Ormsby Prentice, Solicitors to William Fry, Solicitors it was alleged as follows:-

“Last week we understand that these foundations were covered by top soil and we cannot help but feel that was in a late attempt by your client to suggest these lands are now subsidiary and ancillary and fall within the terms of Section 9(1)(a)”

“Rather than incur the expense of removing the foundations, the area of the garden in question, at the behest of the Local Authority because it was low lying and prone to flooding, was raised slightly and has now been landscaped and planted with shrubs and has been fully reconstituted as an integral part of the garden as such”.

The Court finds as a matter of fact the following:

Declan McKeown, the Building Contractor commenced construction work at the property in or around the 9th April, 2005. Foundations were dug for the outline of all four dwellinghouses, together with foundations for the internal load bearing rising walls. This consisted of a trench being dug which was 1 metre wide and 1 metre deep. Concrete strip foundation reinforced with steel approximately 1 foot deep, was poured into the said foundations. Standard concrete blocks were then laid on the concrete strip foundation to a height of no more than a metre. Soil on the inside of the foundations was removed, and hardcore and stone was spread, for the purposes of subsequently pouring a concrete slab throughout the ground floors of the four dwellinghouses. The concrete slab was not in fact poured. Apart from the retaining wall I have already referred to construction work stopped on the 19th May, 2005. Mr. McKeown continued to make the site safe and he backfilled the foundations, put in more stone and left it as safe as he could. At that time when he left the site, there was a top layer of concrete blocks visible about 9-10 inches high over the other levels. For the period of time from the 19th May, 2005 up until mid June 2006 Claire Nardone, sought a solution to the specific problem,of having Planning Permission for four dwellinghouses, but a covenant in the Fee Farm Grant preventing their construction. The uncontroverted evidence of Mrs. Nardone is that when the situation reached an impasse she decided to reconstitute this area and make it part of the garden again. She said she started this work in June 2006 and worked on this area of the garden in July, August, September and October 2006. She stated she retained the services of Declan McKeown again for the purposes of bringing further soil and gravel into the area and spreading this over the area where the foundations were placed. By the 9th May 2007, this area had been completely reconstituted as garden area as is clear from photographs furnished by William Fry, Solicitors to Brigid McCaffrey, Arbitrator on that date.

There was also a separate structure, placed on the grounds of Inglewood by the Respondents, which was a steel shed. In respect of this shed the Respondent received an Architect’s Certificate of Compliance from T.G. Gallagher & Company dated the 4th July, 2005 certifying that the shed was exempt development under the Planning Acts.

The condition of the area where the foundations were laid is a fundamental issue in this Appeal, as the Appellant contends that the Respondents are in breach of Section 9 (1) (a) of the Landlord & Tenant (Ground Rents) (No. 2) Act 1978, which is a pre condition for acquiring the Fee Simple and states:-

“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”.

The Appellant also contends that the Arbitrator did not act in accordance with law, when she received further evidence in or around the 9th May, 2007 in respect of the reconstitution of the garden area over these foundations. The Appellant contends that the relevant date for the consideration of the matter set out at Section 9 (1)(A) of the Act is the date of service of the Notice of Intention to Acquire the Fee Simple that is the 20th October, 2006.

LEGISLATION
The relevant legislation for the acquisition of the Fee Simple is very helpfully set out by Peart J in the High Court Judgement A O’Gorman & Company Limited –v- JES Holdings Limited (2005) 1EHC 168 as follows:-

Outline of the statutory scheme

The general right to acquire the fee simple interest is contained in s. 8 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 (“the 1978 Act”). That section provides:

“8. –A person to whom this Part applies shall, subject to the provisions of this Part, have the right as incident to his existing interest in land to enlarge that interest into a fee simple, and for that purpose to acquire by purchase the fee simple in the land and any intermediate interests in it and the Act of 1967 shall apply accordingly,” (my emphasis)

The persons referred to in s. 8 and to whom the right to acquire the fee simple attaches are those described in s. 9(1) of that Act, as follows:

“9(1) – This Part applies to a person who holds land under a lease of the following conditions are complied with:

(a) there are permanent buildings on the land and that the portion of the land not covered by those building 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 section 10”.

The alternative conditions in s. 10, one of which must be fulfilled for the purpose of s. 9(1)(d) above are set out in s. 10 as follows:

“10. - ………

1. that the permanent buildings were erected by the person who at the time of their 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 buildings;

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 (whether 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 service under section 4 of the Act of 1967 of notice of intention to acquire the fee simple, or that 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.

For the purposes of the condition provided for in s.9(1)(b) of the 1978 Act as set forth above, the term “improvement” is defined in s. 9(2) as follows:

“9(2) – In subsection (1) (b) ‘improvement’ in relation to buildings means any addition to or alteration of 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”.

Section 9(5) of the Act is important in relation to the condition to be fulfilled under s.9(1)1 namely that the permanent buildings were not erected in contravention of a covenant in the lease. Section 9(5) provides:

“9 (5) – The arbitrator may declare a person to be a person to whom this Part applies notwithstanding that the buildings were, in whole or in part, erected in contravention of a covenant, if he is of opinion that it would be unreasonable to order otherwise”.

The above statutory provisions embrace conveniently the various hurdles which the tenant must successfully clear in order to be entitled to require the landlord to convey the fee simple interest in the premises to him. I will in due course set forth the provisions of the legislation which deal with the method by which a consideration for that conveyance is arrived at. Those of course do not come into play until such time as the tenant has been found to enjoy the right to acquire the fee simple.

The seminal Judgement on the issue “ancillary and subsidiary” is that of Killeen V Baron Talbot De Malahide The Irish Jurist Reports 1951. The relevant extracts are as follows:-

“I agree that the period to which I have to have regard in determining the character of the field in relation to the house is the present time. I have to say whether the field is now ancillary and subsidiary to the house …………..The terms must be interpreted having regard to the facts in each case.

The main answer to the submission for the Applicant, in my view, is that the words “ancillary and subsidiary” require the giving or doing of something actively benefiting the house and are not satisfied by proof that the land is aesthetically advantageous to the building”.

It was held by the Supreme Court that a concrete well for a petrol storage tank although roofless and sunk below ground may be a building within the meaning of the Landlord & Tenant Acts.

In Terry -v- Stokes 1993 1 LR. Page 204 it was held by O’Hanlon J

“that the question of whether or not a structure was a building or whether the surrounding land was “subsidiary and ancillary” to it was a matter of fact to be determined by the Court.

That it was not the size of the structure relative to the rest of the yard, nor the value of the structure relative to the rest of the yard which were the crucial questions to be asked, but rather regard should be had to the use made by the tenant of the property and the significance of the structure for those purposes”.

Mr. Justice Peart interpreted the words “ancillary and subsidiary” as follows:-

“Given the cardinal rule of statutory construction that words contained in a Statute must be given their ordinary meaning, it is helpful to refer to the meaning of these words as set forth in The Concise Oxford Dictionary of Current English, (Clarendon Press Oxford 1990).

The word “ancillary” when followed by the word “to” is defined as “subordinate, subservient”. The former in turn being defined as “of inferior importance of 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 the terms.

Prior to any construction work taking place, all the lands the subject matter of the Fee Farm Grant of 1972, were ancillary and subsidiary to the bungalow constructed therein.

If the Respondents had proceeded to complete the construction of the four dwellinghouses, that portion of the subject property the subject of the Grant of Planning Permission and their immediate surrounds would no longer be ancillary and subsidiary to the main dwellinghouse, and the Respondents would not have been entitled to acquire the Fee Simple, and would also have been in breach of the relevant covenant in the Fee Farm Grant.

As soon as the Respondents became aware of the covenant in the Fee Farm Grant, they immediately halted construction of the relevant dwellinghouses. Some backfilling was immediately carried out in May 2005. Commencing from May 2006 the Respondents commenced reconstituting the construction area as a garden. Substantial work was carried out in or around May 2006 when Declan McKeown was back on the site and when topsoil and some gravel was brought on to the property and spread over this area. I accept the evidence of Mrs. Nardone that she was working in this area through the summer months of 2006. The allegation by the Appellant that nothing had been done in relation to the construction works until after the Notice of Intention to Claim Relief is incorrect. By the 20th October 2006, I am satisfied that the original works which I have already described in detail were covered by topsoil. At that point in time in Mr. McKeown’s opinion it would not have been appropriate to use those foundations to proceed to construct the dwellinghouses.

At the date of service of the Notice of Intention to Acquire the Fee Simple on the 20th October, 2006 there existed concrete foundations, some rising walls not less than a metre in height and hardcore, which had been completely covered by topsoil. The facts in this case can be distinguished from the Mason –v- Leavy case where the concrete structure was installed for the purposes of petrol tanks and equipment to set up a petrol supply and motor service station.

In this case the Respondents made a genuine error of fact in not realising that there was a covenant in the original Fee Farm Grant, which prevented the construction of any buildings without the consent of the Grantor. As soon as that mistake was realised the Respondents made every effort to rectify the situation. They acted quite properly in stopping construction, and over a period of 16 months began to reinstate the garden. That reinstatement was clearly not completed at the 20th October, 2006 but it had been commenced, and substantial reinstatement works had been carried out by that date.

I accordingly find that at the 20th October, 2006 the date of the Notice of Intention to Claim Relief under the Act, that portion of the property where the four dwellinghouses were intended to be constructed was ancillary and subsidiary to the main dwellinghouse.

In respect of the shed constructed by the Respondents on the property, this was clearly a shed constructed for the purposes of storing garden and household material. I do not regard it as a separate and distinct structure and it is clearly ancillary and subsidiary to the dwellinghouse.

The Court therefore affirms the Order of the Arbitrator and Directs that the Respondents are entitled to acquire the Fee Simple Interest in the property at Inglewood, Mill Lane, Leixlip, Co. Kildare, the extent of which is set out on the Map attached to the Fee Farm Grant of the 1st February, 1972.