The High Court has set aside a Property Services Appeal Board decision directing the Property Services Regulatory Authority to pay Thady Kelly €5,000 from the Property Services Compensation Fund. The court held that the relevant provisions did not allow compensation for a loss allegedly caused by a firm that was no longer a licensee when the alleged dishonesty occurred.
Mr Justice Kelly, President of the High Court, delivered the judgment on 23 January 2020 on the Authority’s appeal on a question of law under section 75 of the Property Services (Regulation) Act 2011. Mr Kelly did not participate in the High Court hearing, but filed an affidavit.
Mr Kelly said he paid a €5,000 booking deposit to Edward Paul Nugent Ltd in February 2018 for the purchase of land in Castleblayney, County Monaghan. The deposit was repayable but was not returned. Nugent entered liquidation the following month. The company’s licence had expired in February 2017, and it had not obtained a new licence.
The Authority refused Mr Kelly’s compensation application in December 2018 because Nugent was not licensed when it allegedly withheld the money. The Appeal Board later allowed his appeal and directed payment of €5,000, relying on sections 78(3)(a) and 78(4) of the Act.
Mr Kelly’s appeal to the Board had also raised claims about the Authority’s response to Nugent’s continued unlicensed trading, including alleged failures to impose sanctions or alert the public. The High Court said those matters did not determine eligibility under the compensation scheme, which concerned dishonesty by a licensee.
The court found that section 78 did not extend the term “licensee” to a former licensee. It held that section 78(3)(a) addressed a different situation: where a person was a licensee but did not hold a licence covering the property service connected to the loss. Section 78(4), the court said, applied where a licensee died or ceased to be licensed after the alleged dishonest act. Neither provision allowed a grant on the facts of Mr Kelly’s claim.
The judgment also noted serious defects concerning the Appeal Board’s chairperson, who had ceased to be a practising solicitor in 2018 but continued to act on the Board, including in this appeal. The Authority did not ask the High Court to quash the Board’s decision on that basis, and the court proceeded to decide the legal question, while noting considerable legal doubt over decisions involving the disqualified chairperson.
The High Court allowed the Authority’s appeal and set aside the Appeal Board’s 26 March 2019 decision under section 75(2)(b). It did not direct payment from the Fund. The judgment said the same legal issue affected numerous other pending cases; it did not determine those claims.