The Supreme Court has said the landlord of Carrick House in Carrickmacross could have resisted a tenant’s application to buy the property’s freehold under a broader interpretation of the ground-rent legislation. Justice Fennelly would dismiss the landlord’s constitutional appeal because, on that interpretation, it was not affected by the provision it challenged and lacked standing to contest its constitutionality.
The judgment, delivered on 2 February 2012, concerned two related High Court proceedings. In the ground-rent case, the High Court had upheld A. O’Gorman & Company Limited’s entitlement to acquire the fee simple in premises owned by JES Holdings Limited, and set a price of €30,000. In a separate constitutional action, it rejected JES Holdings’ challenge to provisions allowing lessees to acquire a landlord’s freehold. The Supreme Court appeal was from the constitutional decision only; Justice Fennelly stressed that no appeal lay from the High Court’s decision in the Circuit Court appeal.
The premises had originally included Carrick House, a substantial residence with gardens and outhouses. After extensive alterations and retail development from the 1970s onward, the house and grounds became part of a much larger supermarket site. The 1945 lease ran for 50 years from 1951, and the annual rent had risen to £75. When O’Gorman served notice to acquire the freehold in 1998, the rateable valuation was £211.50. The legislation’s eligibility test also presumed that the permanent buildings had not been erected by the lessor or its predecessors in title.
Justice Fennelly said “permanent buildings” meant all the permanent buildings on the land. He also concluded that “predecessors in title” could include all earlier owners, whether they had held as lessors or lessees, where the Shirley predecessor owned all interests by the time the leases were granted. On the evidence, Carrick House had been built around 1800, before the 1919 lease, and must have been built by one of those earlier owners. The landlord could rely on inference to rebut the statutory presumption; the standard was the balance of probabilities, not the more demanding test applied in the earlier ground-rent decision.
Justice Fennelly said that, under this reading, JES Holdings could have rebutted the presumption and defeated O’Gorman’s application. He would therefore dismiss the constitutional appeal for lack of standing, rather than because the challenged provisions were constitutional. He emphasised that his conclusion did not alter the High Court’s decision in the ground-rent proceedings; what effect it might have was for the parties and the High Court judge to consider.