REPORT OF THE INDEPENDENT REVIEW OF THE COMPULSORY
ACQUISITION OF LAND AT CHARLESLAND, COUNTY WICKLOW, BY
WICKLOW COUNTY COUNCIL
SEAMUS WOULFE S.C.
8th February 2013.
2
Chapter 1
1.01
Introduction and Background
On or about the 20th June 2012 the Minister for the Environment, Community and
Local Government, Mr. Phil Hogan T.D., appointed me to carry out an independent
review into the compulsory acquisition of land at Charlesland, County Wicklow, by
Wicklow County Council (“the Council”) and to report thereon to him.
This
independent review follows on from my earlier review of the management by the
Department of the Environment, Community and Local Government (“the
Department”) of an application by the Council for loan approval in respect of the said
compulsory purchase, and I refer to my report of that review dated the 12th March
2012 (“my first report”). Before setting out the Terms of Reference for this second
independent review it might be helpful to set out the general background to this
matter. Some of the general background was already set out in Chapter 1 of my first
report, but it is proposed to repeat same hereunder, with appropriate modifications, for
ease of reference.
1.02
The provision of social and, more recently, affordable housing has long been a feature
of housing policy at central government level, although it is a matter for individual
local authorities to develop housing strategies for their own areas. While decisions on
housing strategy are matters for local government, local authorities would have been
influenced over the past decade by the general concern to ensure that there was
sufficient land in public ownership to underpin the social and affordable investment
housing programmes. This general concern is well captured in a report on housing
issued by the National Economic and Social Council in 2004 (“Housing in Ireland:
Performance and Policy”, Report No. 112, December 2004). At page 171 of that
report it is stated as follows:
“In framing their local action plans for the provision of social and
affordable housing, individual local authorities are required to indicate
if there is sufficient supply of land in their ownership for future house
building requirements. Where land availability arises as a particular
3
constraint to the supply of social and affordable housing, it is
recommended that local authorities, in conjunction with central
government, should take a more proactive role in setting targets for the
acquisition and/or development of land for social and affordable housing
including the development of adequate land banks for future supply
(including the possibility of rezoning where appropriate). Where
significant shortfalls in supply are projected or arise due to scarcity of
land, the use of measures such as compulsory acquisition should be
considered …”.
1.03
As regards the funding mechanism used to purchase land, in recent years the most
common way for local authorities to fund the creation of land banks for social and
affordable housing purposes was to obtain loan finance from the Housing Finance
Agency. Loans obtained in this way could be redeemed, including the rolled up
interest for a period of up to seven years, when the land was later used for a social
housing project for which 100% Exchequer funding was normally provided under the
Social Housing Investment Programme (“SHIP”). This capital funding was subject to
the Department being satisfied with the project brief and having regard to the
availability of funding under that programme.
1.04
In or about 2004 the Council decided to acquire certain land in Greystones for the
purpose of accommodating social and affordable housing. The detailed history of this
acquisition process will be set out in Chapter 3 below, but for the purposes of this
introduction the history of same may be summarised as follows. On the 6th December
2004 the Council served a Compulsory Purchase Order (“CPO”) on the owner and on
the occupier of this land, being 1.4022 hectares of land at Three Trouts, Charlesland,
Greystones. This CPO was confirmed, without modification, by An Bord Pleanála on
the 25th April 2006. A Notice to Treat was served on the 12th July 2006 on the above
parties. The occupier of the land delivered a Notice of Claim on or about the 16th
August 2006 giving details of the compensation claimed, and the owner delivered a
Notice of Claim on or about the 17th August 2006. Under the relevant legislative
provisions, once six weeks had expired from the date of the delivery of a Notice of
Claim the local authority was not legally entitled to withdraw the Notice to Treat.
4
Therefore, in the present case, by around the end of September 2006 the Council were
legally committed to proceed with the purchase of this land, and had no legal
entitlement to withdraw from the compulsory acquisition process, irrespective of any
future change in circumstances, including any change in the value of the land. As
regards value, in assessing compensation for the acquisition of this land by this CPO,
the date of service of the Notice to Treat was the relevant date by reference to which
the market value of the property to be acquired had to be assessed.
1.05
After September 2006 the compulsory purchase process took its course, with efforts
by valuers for both sides to negotiate an agreed amount of compensation. After a lot
of discussions between all parties over the years the matter was ultimately referred to
the Property Arbitrator, and a hearing was listed for the 1st November 2010 but was
adjourned ultimately to the 24th March 2011, and on that date a settlement was
reached whereby the Council agreed to pay compensation of €3m together with costs.
1.06
In the meantime, after September 2006 the Council began to engage with the
Department regarding the land which it was now legally committed to purchase, and
this engagement arose by way of the Council seeking two separate approvals pursuant
to two distinct processes of approval. Firstly, the Council sought approval for capital
funding under SHIP for a proposed housing project on the land being acquired, and
the first communication from the Council to the Department was dated the 6th
December 2006. This approval process took its course until around the middle of
2008, when it was effectively put on hold because of the lack of any further
Exchequer funding for new housing schemes. Secondly, on or about the 19th August
2008 the Council sought the Department’s approval to raise a loan totalling €26m for
land purchase and other purposes, on foot of a resolution by the Members of the
Council dated the 18th August 2008. This application for sanction to borrow was
made pursuant to Section 106 of the Local Government Act, 2001 (“the 2001 Act”)
and the total figure of €26m included a slice of €5m in respect of the CPO land at
Charlesland.
1.07
The application for sanction was under consideration by the Department after receipt
of the letter dated the 19th August 2008, but was effectively put on hold in late 2008
5
while the amount of compensation under the CPO process had not yet been agreed. In
2009 the application for sanction was revived and ultimately the Council was granted
approval to borrow €5m for the land at Charlesland by letter dated the 29th July 2009.
However, the Council did not draw down any such loan from the Housing Finance
Agency by the end of 2009 as the CPO compensation amount was still not agreed, and
the sanction lapsed at the end of 2009. No fresh application was made for sanction in
2010, but by letter dated the 20th July 2011 the Council made a fresh application to the
Department to sanction the borrowing of the sum of €3m for the acquisition of the
land at Charlesland, on foot of a resolution of the Members dated the 18th July 2011.
In advance of passing that resolution a number of Council Members expressed certain
reservations about the compulsory purchase process, and the amount of compensation
payable by the Council to complete the purchase.
1.08
Shortly after receipt of the application for sanction to borrow, the Department became
aware of these reservations, after it received correspondence in relation to the matter
from the Committee of Public Accounts by letter dated the 22nd July 2011. This
application for sanction to borrow was then effectively put on hold, pending the
receipt of legal advice from the Attorney General’s Office. This legal advice was
received by the Department in the middle of October 2011, and it confirmed, inter
alia, that under the CPO legislation one had to assess compensation by reference to
the value of the land at the date the Notice to Treat was served, i.e. July 2006, and not
by reference to any later date, even if the value of land had fallen sharply since the
date of the Notice to Treat. In late October 2011 the Department was considering
whether to grant Wicklow County Council the sanction to borrow as sought back in
July, but before a decision was made the matter was the subject of representations by
three Wicklow public representatives (Councillor James O’Shaughnessy, Councillor
Thomas Cullen and Councillor Barry Nevin) to the former Minister for Housing and
Planning, Mr. Willie Penrose T.D. The Minister’s Special Adviser met with these
public representatives at the request of the Minister on the 3rd November 2011, and he
was at that meeting given a document dated the 3 rd November 2011, which document
set out a list of allegations or issues of public concern regarding the manner in which
this land acquisition was dealt with by the Council, and also regarding the
Department’s management of the loan applications by the Council to fund the
6
acquisition. He was subsequently sent a further document dated the 7th November
2011 regarding the CPO and valuation of the land. The two documents from the three
Councillors are annexed to the Terms of Reference which are attached at Appendix 1
hereto.
1.09
Following receipt of these documents by the Department the Secretary General wrote
to the Office of the Attorney General by letter dated the 16th November 2011 and
stated that, in light of the serious issues raised in the documents submitted to Minister
Penrose, the Department would not be further processing the application for loan
sanction pending an examination of the validity, or otherwise, of the claims made in
respect of the actions of the Department and the Council. She stated that independent
review of the actions of the Department since the making of the original loan
application by the Council was now necessary before final consideration would be
given to the current loan application, and such a review should also be enabled to
pursue any associated inquiry which might be necessary in respect of the manner in
which the Council has itself dealt with this land acquisition. She commented that, in
undertaking this review, it would be necessary to address the specific concerns of the
public representatives and to consider whether the Department was fully compliant
with relevant statutory and public policy obligations. A copy of this letter is attached
at Appendix 2 hereto.
1.10
After this letter consideration was given to the nature and scope of the proposed
independent review, and it was decided to proceed in the first instance with a review
of the actions of the Department and to postpone further consideration of any
associated review that might be necessary in respect of the manner in which the
Council dealt with the land acquisition. I was subsequently appointed to carry out the
first independent review by letter dated the 31st January 2012 and this led to my first
report dated the 12th March 2012.
1.11
As stated at paragraph 1.01 above, I was appointed to carry out this second
independent review by letter dated the 20th June 2012. It should be noted that as on
the first occasion my appointment was to carry out this independent review on a parttime basis, and I began work on the review in early July 2012 when I had a
7
preliminary meeting with the Council on the 3rd July 2012. I also carried out a
preliminary site visit to the subject site on that date. In order to ensure that the review
was conducted by reference to all relevant materials, copies of all of the relevant files
were obtained from the Council during July 2012. During September and October
2012 I reviewed the voluminous documentation, and after that I consulted with and
met with both the Council officials and the public representatives to clarify the history
of this matter, the specific concerns of the public representatives regarding the role of
the Council and the response of the Council. Subsequent correspondence with both
continued up until the middle of December 2012.
1.12
In conducting this review I did not have the benefit of any statutory powers, whether
to compel the production of documents or otherwise. However, it is appropriate to
record that I obtained the full cooperation of the Council and the public
representatives and of the Department, and I am grateful for the prompt and detailed
assistance which was given to me. It is important also to note that I have no statutory
power to make any binding determinations of facts and that my review was essentially
a documents review, albeit supplemented by detailed oral and written consultation
with the Council and with the public representatives and any findings or conclusions
made by me should be viewed in that context.
1.13
During the course of my oral and written consultation with the public representative a
number of new issues were raised by the Councillors, such as an issue as to the
potential overlooking of the proposed houses on the CPO site from the Charlesland
estate. In my opinion these new issues went beyond the specific concerns of the public
representatives in the documents annexed to my Terms of Reference, and were
therefore outside my Terms of Reference. For this reason I have not dealt with these
new issues in this report.
1.14
On a similar note I was also furnished with information regarding flooding incidents
in recent years in the Greystones area, including details of a flooding incident on the
24th January 2013 at the Burnaby Lawns estate, which estate is on the other side of the
Three Trout Stream from the CPO lands. It seems to me that the assessment of the
8
role of the Council must relate primarily to the information available to the Council
officials and their state of mind at the time of the oral hearing conducted by An Bord
Pleanála in March 2005 and March 2006. While any information regarding recent
flooding could possibly cast some retrospective light on those matters, any such
information would have to relate to the CPO site itself or else to other lands which
have identical characteristics to the CPO lands. In my opinion, the recent information
did not satisfy this test and therefore I have not dealt with same in this report.
9
Chapter 2
2.01
The Relevant Legal Requirements and Administrative Requirements or
Practices regarding Compulsory Acquisition of Land by Local Authorities
The vehicle generally used by local authorities when carrying out compulsory
acquisitions of land is Part V of the Housing Act, 1966 (“the 1966 Act”) and the Third
Schedule to that Act.
In McDermott and Woulfe “Compulsory Purchase and
Compensation: Law and Practice in Ireland” the authors set out in helpful tabular
form the 18 steps which they suggest are required for a valid compulsory acquisition
under the 1966 Act as follows (at p.56):
“Steps in Acquisition under Housing Act 1966:
1.
Identification of empowering statute after establishing the objects for which the
lands are required.
2.
Making of CPO by Local Authority after careful identification, description,
categorisation and mapping of the lands, identification and accurate listing of
various owners, lessees and occupiers.
3.
Service of Notices by Local Authority on owners and lessees; publication in
press.
4.
Lodgement of objections (if any).
5.
Local inquiry (if objections made).
6.
Minister’s decision - confirmation with or without alteration.
7.
Possible challenge in High Court.
8.
CPO becomes operative.
9.
Decision to serve and service of Notice to Treat.
10.
Notice of entry – entry.
11.
Preparation and lodgement of claim.
12.
Agreement on claim.
13.
In event of disagreement on claim, steps to appoint property arbitrator at
instance of the :
a.
Claimant;
b.
Local authority.
10
14.
Service of Notice etc. by Local Authority in accordance with Article 6, Second
Schedule Housing of the Working Classes Act 1890.
15.
Arbitration hearing.
16.
Arbitration award.
17.
Adducing and taking of title by
18.
2.02
a.
Conveyance or transfer.
b.
Vesting order.
c.
Deed Poll.
Payment of award, costs (and interest)”.
Some further comments might be made in relation to the 18 steps set out above. As
regards step 1, it is important for a local authority to establish the objects or purposes
for which the lands are required, and then to identify the statutory provision which
empowers it to acquire the lands compulsorily for those objects or purposes. A local
authority is by definition an artificial legal person, and in general can only do that
which is permitted by a statute. As regards step 2, the first paragraph of the Third
Schedule to the 1966 Act requires that a CPO shall in the prescribed form, and the
prescribed forms are to be found under the Housing Act, 1966 (Acquisition of Land)
Regulations 2000. As regards step 3, Article 4 of the Third Schedule specifies the
notice procedure and the purpose of same is to enable the person affected to consider
whether or not to make an objection to what the Supreme Court has described as an
invasion of his constitutionally protected property rights.
2.03
As regards steps 4 and 5, the legislation provides for the making of an objection by
any notified party after a CPO has been submitted to the confirming authority for
confirmation.
The confirmation function conferred on the Minister for the
Environment under the 1966 Act was transferred to An Bord Pleanála (“the Board”)
by Section 214 of the Planning and Development Act 2000 (“the 2000 Act”). If an
objection is made to the CPO the Board must hold an oral hearing in relation to the
matter, and since the 2000 Act this has replaced the previous requirement for the
Minister to call for a public local inquiry to be held, as referred to in step 5 of
McDermott and Woulfe’s table above. As regards step 6, the Board now has the
power to confirm a CPO or any part thereof with or without conditions or
11
modifications, or to annul a CPO or any part thereof. As regards the exercise of that
power, Simons, “Planning and Development Law” (2nd Edition, 2007) states as
follows (at paragraph 8 - 419):
“One of the greatest mysteries of compulsory purchase law is as to
what precisely it is that An Bord Pleanála must be satisfied of before
it confirms a compulsory purchase order. In particular, there is little
guidance as to the nature and extent of the considerations which An
Bord Pleanála is to take into account in reaching its decision.”
2.04
As regards step 7, Section 78 of the 1966 Act permitted any person aggrieved by a
CPO which had been confirmed to challenge the validity of the CPO in the High
Court, and this is now governed by Section 50 of the 2000 Act. Any challenge must
be mounted by way of an application for judicial review under Order 84 of the Rules
of the Superior Courts and a strict time limit of eight weeks applies, with limited
scope for extension of that period in exceptional circumstances. As regards step 8, a
CPO becomes operative three weeks from the date on which notice of the Board’s
decision is first published, in the absence of any High Court challenge, in accordance
with Section 217(7)(a) of the 2000 Act.
2.05
As regards step 9, once the CPO has been confirmed and has become operative, the
acquiring authority is then at liberty to embark on the next step of the acquisition
procedure, i.e. to serve a Notice to Treat pursuant to Section 79 of the 1966 Act. As
stated at page 80 of McDermott and Woulfe, the expression “Notice to Treat” has an
antique ring to it. It is a notice asking the party notified, usually the owner, to
negotiate terms with the acquiring authority.
A Notice to Treat is a formal
commitment by the acquiring authority to proceed with the acquisition, which it is not
obliged to do until the Notice to Treat is served. The date of service of the Notice to
Treat is an extremely significant event in the entire CPO process, as Section 84 of
1966 Act provides that the value of the land acquired shall be set by reference to the
date of service of the Notice to Treat.
This provision is obviously of crucial
significance in times of a falling market and in circumstances where there may be a
12
significant delay between service of the Notice to Treat and the date that
compensation is assessed.
2.06
As regards step 10, under Section 80 of the 1966 Act the acquiring authority can serve
a Notice of Entry on any owner and others at any time after serving a Notice to Treat,
and, after 14 days can take possession of the land even though no compensation has
yet been paid or even agreed. The drawback is that when compensation is ultimately
agreed or determined by the Property Arbitrator, the acquiring authority must then
pay interest on the compensation from the date of actual entry to the date of payment.
For this reason, exercise of the power of entry is likely to be unattractive in most
cases.
2.07
As regards steps 11 to 13, these steps deal with claiming for compensation and the
method of resolving same. Under Section 79 of the 1966 Act the Notice to Treat
requires each owner and occupier to state within a specified period the exact nature of
the interest in the land in respect of which compensation is claimed by him, and
details of the compensation claimed. This is generally referred to as a Notice of
Claim. After delivery of the Notice of Claim the parties can seek to agree the amount
of compensation payable, and in default of agreement either side can take steps to
have an arbitrator appointed to assess the claim, in accordance with the provisions of
the Acquisition of Land (Assessment of Compensation) Act, 1919 (“the 1919 Act”).
2.08
As regards step 14, there is a provision in old legislation known as the Housing of the
Working Classes Act, 1890 requiring the publication of certain notices where an
application for the nomination of a Property Arbitrator is made by a local authority,
but these requirements do not apply where the Arbitrator has been nominated on the
application of the claimant. As regards step 15, the procedure about these type of
arbitrations is governed mainly by the 1919 Act and Rules made under that Act,
known as the Acquisition of Land (Assessment of Compensation) Rules 1920.
Article 5(3) of the 1920 Rules provides that the proceedings before the Arbitrator
shall be such as the Arbitrator may in his discretion see fit, subject to the provisions of
the 1919 Act and the said Rules. Section 3(5) of the 1919 Act provides that hearings
before the Property Arbitrator shall be in public. In fact hearings before the Property
13
Arbitrator tend to be quite formal arbitrations and tend to follow the formal procedure
of a hearing of a civil action in Court.
The parties will generally be legally
represented, often by Counsel, and witnesses will be examined under oath. The
Arbitrator will normally inspect the subject property and will tend to pay particular
attention to evidence relating to the valuations of comparable property put on the
market in the previous few years. As regards step 16, at the end of the hearing the
Arbitrator will generally reserve his decision and in due course will issue an award.
Section 6 of the 1919 Act provides that the decision of the Property Arbitrator upon
any question of fact is final and binding on the party.
2.09
As regards step 17, McDermott and Woulfe are referring here to different methods of
the acquiring authority getting in title. The most simplest method appears to be by
way of a conveyance or transfer, and in such cases there can be a formal
contemporaneous closing whereby payment of the award or agreed compensation
takes place at the same time. As regards step 18, in some cases payment of interest
may also arise at the same time. Payment of costs will generally happen at a later
stage, often following a separate taxation of costs process.
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Chapter 3
3.01
The Process followed by the Council in regard to the Compulsory
Acquisition of the Land including its consistency with the Relevant Legal
Requirements and Administrative Requirements or Practices
In my Terms of Reference I have been requested to establish the process followed by
the Council in regard to the compulsory acquisition of the land including its
consistency with the relevant legal requirements and administrative requirements or
practices, and also to identify any deviation from such requirements and practices.
The relevant legal requirements and administrative requirements or practices have
been set out in Chapter 2. It is now necessary to set out the process followed by the
Council in regard to this compulsory acquisition, and it is convenient to examine the
constituent parts of this process in the context of the 18 required steps set out in
Chapter 2 above. Before commencing that examination however it is important to
consider the preliminary issue of site selection.
Site Selection:
3.02
It appears that the subject lands were first identified on behalf of the Council by Mr.
Tony O’Neill, Economic Development Executive on or about the 18th November
2003. The Council files contain a note of Mr. O’Neill dated the 18th November 2003
wherein he states that he met with Mr. William Irwin, Mr. John Nolan, and a third
party, and that Mr. Irwin owned 4½ acres south of the Three Trout Stream, on which
Mr. Nolan keeps horses, and that Mr. Irwin has had many offers but won’t sell. It
appears that Mr. O’Neill had the task of trying to source suitable lands in Greystones
for the Council in order to meet the Council’s statutory obligation of providing social
and affordable housing. It appears that at the meeting on the 18th November 2003
there was also some reference to a second property owned by Mr. Irwin, a derelict
large house on over 1 acre known as Killincarrig Lodge. The files record that Mr.
O’Neill then discussed both of the sites with Mr. Des O’Brien, Director of Services,
Housing and Corporate Estate on the 21st November 2003 and that his instructions
were to “negotiation further and CPO if going nowhere”. On the 4th December 2003
Mr. O’Neill again asked Mr. Irwin to sell the Council the two sites previously
identified. On the 18th December 2003 Mr. O’Neill told Mr. Nolan that Mr. Irwin was
15
worried about selling the subject lands to the Council because of Mr. Nolan’s horses
on the lands, and he asked Mr. Nolan to encourage Mr. Irwin to sell either the subject
lands or the other site. On the 14th January 2004 Mr. O’Neill visited Mr. Irwin and
asked him again would he sell either site but he said no, that he was not interested.
Mr. O’Neill told him that the Council was very anxious to buy and might consider a
CPO and that the pressure was on Mr. O’Neill and the Council. Mr. O’Neill made a
further unsuccessful attempt to visit Mr. Irwin on the 30th March 2004.
By
memorandum dated the 31st March 2004 to Mr. O’Brien, Mr. O’Neill described his
efforts over recent months to progress the purchase of the two sites in the area owned
by Mr. Irwin but stated that he felt he was getting nowhere in the negotiations. He
recommended that the Council would establish, as best they could, title to the two
sites and proceed to the compulsory purchase of either one or both of the sites.
3.03
The files suggest that on receipt of this memorandum Mr. O’Brien wrote a note to Ms.
Lorraine Gallagher, Senior Executive Officer, Housing and Corporate Estate, dated
the 6th April 2004 to “please progress to CPO”. It appears that Ms. Gallagher then
discussed the matter with Mr. Eddie Murphy, Executive Technician on the 16th April
2004, and it was noted that Mr. Murphy would discuss with Mr. O’Neill with a view
to preparing a map and verifying title. There is then a Memo from Mr. O’Neill to Ms.
Gallagher dated the 5th May 2004 wherein Mr. Murphy states that the subject lands
are registered to Mr. Irwin under Folio 2915, and he encloses a copy of the Folio and
a map prepared by him showing the site and the area involved. The Council’s files
suggest that there was then a gap of approximately three months until a report dated
the 13th August 2004 from Mr. Michael Mangan, Senior Engineer, Housing and
Corporate Estate. This report is significant as it comprised the principal element of
any site selection procedure carried out by the Council at the time, given that Mr.
O’Neill had simply identified the site as a potential site for purchase in the most
general way. In his report Mr. Mangan stated that it was proposed to acquire these
lands for residential development of social housing units, along with the provision of
a section of a proposed linear park. He referred to the relevant provisions of the
Greystones-Delgany Development Plan 1999 (“the 1999 Local Area Plan”) and stated
that the need for social housing in the north-east of Wicklow and in the Greystones
area in particular had been identified in the Social and Affordable Housing Plan 200416
2008 of May 2004. The number of units that could be provided on the site depended
upon detailed design of the units and the layout of the site. However, for the purposes
of assessing the servicing of the lands it was necessary to estimate the likely
maximum level of development and he estimated that there were likely to be in the
order of 30 units on this site. Vehicular access to the development would be via
Burnaby Lawns and Mr. Mangan felt that the addition of 30 units would be well
within the capacity of the main estate road. The proposed access would entail the
construction of a bridge over Three Trout Stream and approximately 30 meters of new
carriageway over the existing open space. Foul sewerage could be provided by the
existing main sewer in Burnaby Lawns and Mr. Mangan felt there was more than
sufficient capacity for 30 houses to be connected by crossing of the Three Trout
Stream. Other services (water, gas, telephone) were available in the existing road,
and Mr. Mangan’s opinion was that it would be possible for these to be extended over
the proposed bridge and to serve the new development. It is noteworthy that Mr.
Mangan does not appear to have considered that there was any issue of risk of
flooding affecting these lands, as he makes no reference to same in his report.
3.04
Following this report the Council wrote to Mr. Irwin by letter dated the 19th August
2004 referring to his meetings with Mr. O’Neill regarding the possible purchase of his
lands. The letter pointed out that the Council had an obligation to provide housing
and that they considered Mr. Irwin’s land suitable for that purpose, and accordingly
notified Mr. Irwin that the Council intended to proceed to compulsorily purchase
these lands. There was then a further note from Mr. O’Brien dated the 6th September
2004 with a direction to “proceed to CPO”. The next substantive step in terms of any
site selection procedure was a report from Mr. Paddy Hooper, Senior Planner, dated
the 30th November 2004. In this report Mr. Hooper certified that the acquisition of the
subject lands was in conformity with the Wicklow County Development Plan 2004 –
2010, the 1999 Local Area Plan and the proper planning and sustainable development
of the area. The report is very bare in that there is a lack of any supporting detail.
The above elements of a site selection procedure were cited in the Manager’s Order
dated the 30th November 2004 as discussed below.
17
Compliance with the Relevant Legal Requirements and Administrative Requirements
or Practices:
3.05
The process followed by the Council in carrying out the compulsory acquisition of
this site can be described and analysed within the umbrella of the 18 required steps set
out and discussed in Chapter 2 above.
Step One – Identification of Statutory Powers:
As regards Step 1, it is clear from the Council’s files that the Council felt these lands
were required for social housing purposes and they identify the statutory power to do
so derived from s. 10 of the Local Government (Ireland) Act, 1898 (as amended), the
provisions of Part V of the Housing Act 1966 and Section 213 of the Planning and
Development Act 2000.
Step Two – Making of CPO:
3.06
As discussed above, it appears from the Council’s files that Mr. Tony O’Neill first
identified the subject lands for potential purchase in or about November 2003, and he
recommended that the Council proceed to compulsory purchase by memorandum
dated the 31st March 2004. Over subsequent months the matter went through an
internal procedure which included the more precise identification and mapping of the
lands and the establishment of Mr. Irwin’s title to the lands under Folio 2915 County
Wicklow. Along the way the Council officials sought advice from the Law Agent
regarding the form of the draft Compulsory Purchase Order. As of September 2004,
the Law Agent advised that Mr. John Nolan should be listed in the Schedule as an
occupier of the lands, on the basis that he might have a compensatable interest in the
lands. Ultimately the making of the CPO was approved by a Manager’s Order dated
the 30th November 2004. The actual Compulsory Purchase Order was then made by
the Council on the 6th December 2004 when the official seal of the local authority was
affixed thereto, and was entitled the “Wicklow County Council Compulsory Purchase
(Lands at Charlesland, Greystones) Number 6 Order 2004”. A copy of the said Order
is attached at Appendix 3 hereto.
18
Step Three – Service of Notices:
3.07
The Council complied with the requirements for service of notices and press
publication as follows. They served notice on Mr. William Irwin, as registered owner
of the lands, by letter dated the 8th December 2004. A similar notice was served on
Mr. John Nolan, as occupier of the lands, by letter bearing the same date. As regards
press publication, the Council published notice in the prescribed form of the making
of the CPO in the Wicklow People on Thursday the 9th December 2004.
Steps Four and Five – Lodgement of Objection and Oral Hearing:
3.08
The CPO was submitted by the Council to An Bord Pleanála for confirmation by
letter dated the 9th December 2004. A written objection to the CPO was made by Mr.
John Nolan dated the 10th January 2005. In this objection Mr. Nolan queried the
suitability of the site for housing and stated that the entire river valley in which this
field is situated had flooded as recently as November 2002. He referred to his use of
the field for keeping horses, the long term history of use of the field by his family, and
he claimed that Mr. Irwin had told him in 1980 that he had paid enough rent and that
he could have the field. By letter dated the 9th February 2005 the Council responded
as follows in relation to site suitability:
“The lands in question are zoned within the 1999 Greystones/Delgany
Development Plan Area Z1- “Provide for a comprehensive phased
residential and public open space development on 53 Hectares at a gross
density of 15.7 dwellings per hectare to accord with Action Area Plan
Z1” (Shown on Map No. 2, Page 40). It is the Council’s intention to use
these lands for housing along with public open space adjacent to the
Three Trout Stream incorporating cycle and pedestrian ways.
With regards to the issue of flooding of the adjacent Three Trout Stream,
this has been investigated by J. B. Barry & Partners. Their report
“Storm Water Review – Three Trout Stream” dated May 1996 (revised
19
February 1997) addressed the issue of capacity of this stream.
Its
recommendations are that the stream channel be upgraded to cater for a
storm with 30 year return period (preferred method open channel – earth
lined trapezoidal channel). In addition, floor levels shall be a minimum
1.0 m above the design top water level. Both of these recommendations
can be complied with in the development of this site.”
3.09
The Board was required under Section 218 of the 2000 Act to hold an oral hearing
into the objection made by Mr. Nolan and the Board arranged for Ms. Oznur Yucel –
Finn, a Senior Inspector with the Board, to conduct an oral hearing on the 15th March
2005. The Council obtained copies of the transcripts of the oral hearing from An
Bord Pleanála and made same available to me. The following is a summary of some
of the salient evidence given at the oral hearing.
3.10
Mr. Michael Mangan, Senior Engineer in the Housing and Corporate Estate
Department of the Council, was the first witness to give evidence. As regards the
nature and extent of the site, he explained this site was located on the south side of the
Three Trout Stream, south of the existing Council housing development at Burnaby
Lawns which is on the north side of the stream. It was proposed that road access
would be via Burnaby Lawns, and the proposed development on the subject site
would entail the construction of a bridge over the Three Trout Stream. He explained
how various services could be extended to provide services to the proposed new
development. As regards the number of units that could be provided on the site, this
would depend upon the detailed design of the units and the layout of the site.
However, based upon standard figures it was likely that 34 units could be provided on
the site. He noted how the site sloped slightly upwards in a southerly direction from
the Three Trout Stream.
3.11
The next witness on behalf of the Council was Ms. Lorraine Gallagher, Senior
Executive Officer in Housing and Corporate Estate. The functions of her department
included the maintenance of the Council’s housing lists and assessing the housing
needs of housing applicants in various areas of the County on an on-going basis. She
explained how the Council historically has had approximately 1,800 people on its
20
housing list, and most recently 515 applicants had expressed a preference to live in
Greystones and its environs. Of those 219 housing applicants who had expressed a
first preference for Greystones, some 112 had expressed a first preference to live in
the area of Greystones quite close to the subject site. Ms. Gallagher felt it was
reasonably evident from these figures that there was a substantial housing need in
Greystones and its immediate environs and if this CPO was confirmed it would enable
the Council to construct 30 housing units to satisfy part of that need.
3.12
The last witness for the Council was Mr. Paddy Hooper, Senior Planner with the
Council.
He explained certain matters regarding the Greystones/Delgany
development plan which was adopted by the Council in March 1999 and how the site
is located to the north western corner of an area zoned Action Area Plan Z1, which
was an action area plan adopted with the objective of providing phased residential and
public open space development on approximately 53 hectares at a gross density of
15.7 dwellings per hectare. This would include up to 822 dwellings, and it was
anticipated that a minimum of 14% of the total dwelling units would be social housing
in accordance with the Council’s then housing strategy. It was further anticipated that
there would be 12 hectares of public open space for active recreation, and cycling and
pedestrian walkways were to be included particularly along the Three Trout Stream.
While no detailed phasing or designs had been prepared for the Action Area Plan Z1,
Mr. Hooper was of the view that the CPO would enable the Council to provide
additional housing in accordance with the proper planning and sustainable
development of the area generally, and would enable the Council to secure a
reasonable level of social housing for the area in accordance with its housing strategy
and the need to provide housing in the area.
3.13
The next witness was Mr. Alan Nolan, a nephew of Mr. John Nolan, and he read a
written submission which had been sent into the Board by Mr. John Nolan. This
submission was very similar to the written objection made by Mr. Nolan in his letter
dated the 10th January 2005, as summarised at paragraph 3.08 above. As regards
suitability and risk of flooding, he now added that during the 1930s the field had
contained a lake which was reputed to be 30 foot deep and that this had been filled in
for safety reasons after a pony, three calves and a cow were drowned there in 1934.
21
He mentioned that the Council had built houses in the adjoining field approximately
ten years ago and that these had been flooded.
3.14
Mr. Mangan later responded on behalf of the Council in relation to the issues of
suitability of the lands for housing and in particular risk of flooding. He stated that he
carried out a visual inspection of the field as part of the CPO process. The lands as
purchased were proposed for both residential development along with the provision of
a linear park adjacent to the Three Trout Stream as required in the Action Area Plan
or the zoning in the Development Plan. In this regard any proposed development
would take place on the higher southern side of the field away from the stream,
allowing the linear park to run along as required within the area adjacent to the
stream. He acknowledged that there had been a history of flooding in the area and
referred to a report carried out by J. B. Barry & Partners in 1996/1997 (“the Barry
Report”) which made certain recommendations regarding works to the Three Trout
Stream. In the area of the stream adjacent to the subject site the recommendations
were that the channel should be excavated and widened forming an earth lined open
channel. Mr. Mangan was informed that certain of those works were carried out at
the time of construction of Burnaby Lawns when the channel was widened, and
further works would be required downstream on adjoining landowners’ properties.
The area that would be prone to flooding would be at the level of the housing on
Burnaby Lawns, but the proposed housing development on the subject site would be
accommodated in the higher part of the site adjacent to a development which was then
taking place on adjoining property to the south, and away from the flood zone.
3.15
In response to the Inspector Mr. Mangan stated that there had been no further update
to the Barry Report since 1997. The last flooding of which he was aware was 1997 he
thought, and he wasn’t aware of flooding in 2002. He had checked with the Sanitary
Services Section and the Local Area Engineer who would have been aware, and they
had not informed him of anything.
3.16
At this point in the hearing Mr. Al Nolan intervened and stated that the whole area
was definitely flooded in November 2000, which perhaps is an error in the transcript
and should have been a reference to November 2002 as per the written submission
22
made by Mr. John Nolan. He referred again to the fact that the housing in Burnaby
Lawns had been flooded, and Mr. Mangan confirmed that there had been an incident
of those houses flooding soon after construction in 1997, and that works were carried
out to the stream subsequent to that. Mr. Nolan maintained that the stream flooded
since those works and that there were more works carried out after the 2002 flooding.
The inspector suggested to Mr. Nolan that the subject site was at a higher level than
the Burnaby Lawns development, and that the Council intended to put the proposed
housing development on the higher section of the site because the site slopes down.
Mr. John Nolan in response referred to a general problem regarding flooding in the
area. In response to a question from the Inspector as to whether the flooding was
more on the Burnaby Lawns side rather than the field, Mr. John Nolan responded that
it was all down along his field, that it came in there as well down at the bottom of his
field.
3.17
The hearing then moved on to deal with certain other issues. The Inspector raised the
question as to what other sites the planning authority was acquiring in the Greystones
area. In response Ms. Gallagher referred to the Social Housing Action Plan 20042008, which outlined the amount of land needed over the next four years in the
Greystones area to be 7 hectares to deal with the first preferences for that area. She
stated that the Council found it extremely difficult to acquire land in the north east of
the County, both in terms of the availability and the cost of such land. She confirmed
that there were no other sites being acquired by CPO in Greystones at that time. In
addition the Council was not acquiring any land in the Greystones area by way of
negotiations.
3.18
Mr. Mangan then gave evidence of having done a study of lands in the Greystones
area which were in the ownership of the Council and which were zoned for housing in
the current development plan. There was one site immediately to the north of the
subject site which was zoned for a school within Burnaby Lawns.
There was
approximately 25 acres (approximately 10 hectares) to the east of the site which now
had the dual carriageway servicing this area coming through.
There was
approximately 7 acres (it may be this is again a transcript error and should read 7
hectares) left there in the ownership of the Council which could accommodate around
23
160 units but that it was not the Council policy to provide 160 units in one block for
social housing, but rather to integrate social and private housing together, so the
maximum potential number of houses there would be in the order of 100 social
houses. During further discussion with the Inspector Mr. Mangan stated that parts of
the site to the east of the new dual carriageway were indicated as being suitable for a
proposed hotel, and therefore the whole of the 10 hectares would not be available for
residential development, but rather it would be approximately 100 housing units that
could be provided there. While the transcript records Mr. Mangan as stating that this
would represent probably less than “15%” of the needs of the area, it may be again
that this is a transcript error and that he actually said that it would represent probably
less than 50%, given that the total expressions of first preference to live in Greystones
was a figure of 219.
3.19
The next section of the oral hearing dealt with the position of Mr. William Irwin, the
registered owner of the land. The inspector had received a fax from Felton McKnight
& Co., Solicitors stating that they were in the process of initiating Wardship
proceedings relevant to Mr. Irwin, who was suffering from dementia. Once the
Wardship application had been processed and an order made taking Mr. Irwin into
Wardship, his Committee would then be able to deal with his affairs on behalf. In the
meantime, they requested that no further steps be taken to process the CPO. They
warned that otherwise they would have no option but to issue proceedings to have any
CPO set aside until their client could be represented. The Inspector asked the Council
for their position on the matter, and the Law Agent suggested that in the interests of
fair procedures the Inspector might adjourn the hearing rather than conclude it. The
Inspector decided to follow that course of action, and he adjourned the hearing for ten
weeks to allow the Wardship application take place.
3.20
Ultimately the Wardship process took much longer than anticipated and as a result the
second session of the oral hearing did not take place until the 21st March 2006, over a
year since the first session. In the intervening period Mr. Irwin had been made a
Ward of Court and his Committee in Wardship was now represented by Mr. Mark
Felton of Felton McKnight Solicitors, and also by Mr. Gordon Lennox of Lennox
24
Estates, Auctioneers and Valuers. A copy of the transcript of the first session had
been forwarded to representatives of Mr. Irwin in advance of the second session.
3.21
At the resumed hearing the Council’s representatives confirmed that there had been
no changes in development plan policies or in housing policies since the first session.
The Inspector queried whether the Council had purchased any lands since March 2005
for housing purposes, and Mr. Des O’Brien, Director of Services responded that the
Council had purchased just under two acres of land at the edge of Greystones by
agreement. The Inspector referred to some discrepancies in the previous evidence as
to whether the last flooding had taken place in 2002 or 2000 or 1997, and Mr. Mangan
stated that he had no further information on the issue.
3.22
Mr. Alan Nolan then made a small additional presentation on behalf of the Nolan
family. He stated that the land beside John Nolan’s field, a little over three acres, had
recently been bought by one of the developers involved in the nearby Zapi
development. He referred to access issues and stated that this land appeared to be
more suited to the Council’s needs than the developer’s needs. He queried whether
the Council had considered purchasing this land or whether there was a possibility
that the Council were planning to do a land swap with the developer and give them
the CPO land in return for the field which the developer had bought. He asked why
other lands owned by the Council which was closer to Greystones could not be used
for housing. He suggested that the proposed housing on the subject site would not be
in Greystones, but would be almost two miles from the town. He suggested that there
had been evidence at the previous hearing of a huge land bank between Charlesland
and Greystones owned by the Council which was being retailed for a hotel, and he
asked was that more important than housing. In conclusion he stated that there was
more than adequate land in Greystones which could be used to satisfy the Council’s
housing requirements, without spending a fortune developing this unsuitable site.
3.23
In response on behalf of the Council Mr. Sweetman, the Law Agent, said it was the
Council’s view that this land was reasonably suitable for housing, and reasonably
conveniently adjacent to the Burnaby Lawns development. The other field which Mr.
Nolan mentioned was less suitable because it had access problems via a church
25
property. In any event what the Council had decided was that the site in question was
reasonably suitable for housing, and they had shown on the last occasion that there
was a demand and a reasonable public need for housing in and around Greystones.
3.24
The next witness was Mr. Felton, who confirmed that he appeared on behalf of Mr.
Irwin’s Committee in Wardship. He explained that the reason why they had objected
to the CPO in the first instance was that at that time Mr. Irwin was not mentally
capable of being in a position to deal with it himself, and the objection was made in
order to facilitate the proper procedures being put in place culminating with the recent
High Court Order. There was no longer any reason for the family to object to the
CPO and the objection as originally lodged was now being withdrawn. The oral
hearing then concluded.
3.25
Following the oral hearing the Inspector then submitted a detailed Report to the Board
which appears undated. In Section 6 of the Report she dealt with her assessment of
the issues arising. As regards the issue of need, the Inspector was satisfied that there
was indeed a public need for provision of housing within the County and in the
Greystones area, based on the figures provided by the Council. She referred to the
objector’s question as to why such housing was not being provided in other lands
owned by the Council and the Council’s evidence regarding their lands of ten hectares
(25 acres) to the north of the Three Trout Stream, and how some of these lands would
be severed by the construction of the new road and being located next to business uses
would be more suitable for a hotel.
While the remaining seven hectares could
accommodate 160 units, it was not the Council policy to accommodate such an
amount in one block for social housing, and so the maximum number of houses that
could be provided there would be 100.
There was no provision for social and
affordable housing in the nearby Zapi development at Charlesland, and as a result the
Council were actively looking for additional land. It would not have been possible for
the Council to acquire other nearby lands which the objector had suggested, because
of problems of access via church property. The Council had managed to acquire
approximately two acres at the southern end of Greystones during the intervening year
between the two sessions of the oral hearing. The Inspector then concluded on this
issue as follows:
26
“Based on the above, and on the information provided during the
hearing, while I do consider the argument put forward by the objector in
relation to possible provision of social housing on other lands in the
immediate vicinity of the subject site to be plausible, I am also satisfied
that any need arising is in excess of the lands in the ownership of the
Local Authority and social housing that would be provided through Part
V requirement of development permitted in the immediate area, and the
housing that can be provided in the recently purchased land at the
southern end (Prettybush). Therefore, I am satisfied that there is a need
for the Local Authority to acquire additional lands to meet the public
need for housing through purchase of additional lands, whether by way
of agreement or by way of CPO.”
3.26
The Inspector then dealt with the issue of the suitability of the site for provision of
housing. She referred to the objector’s argument that the field is prone to flooding
and was not suitable for housing, and to the evidence of the Council which
acknowledged that the Three Trout Stream had indeed flooded soon after construction
of the houses in 1997 but remedial action was then carried out on the basis of
recommendations of a consultant’s report. She noted that in the vicinity of the Three
Trout Bridge the stream goes through a rather narrow channel and in this section
while some of the land remains at levels close to the stream the lands to the South of
the stream rise quite steeply after a while. There was a wider area to the north that
remained at lower levels. While she noted the channel was widened as one moved in
the easterly direction, as recommended in the consultant’s report, she was satisfied
that flooding could indeed incur in the lower levels which were immediately adjacent
to the river. She referred to the evidence of the Council that the houses would be
located on the higher ground near the houses in the Charlesland development, and a
riverside walkway would be provided in the lower section of the site, and the
Inspector was satisfied that this would indeed be possible based on her observation
during her inspection. She drew the Board’s attention to a drawing presented at the
oral hearing showing the Charlesland housing development and in particular the
parkland at the northern end of that development along the Three Trout Stream.
27
Provision of a linear park and walkway in the northern section of the subject site
would continue this in the westerly direction and would be in accordance with the
objective indicated in the Action Plan and with the proper planning and sustainable
development of the area. The Inspector was satisfied that detailed flood prevention
measures could be introduced at the design stage by the Council to safe guard the
public walkway. It seemed quite plausible to her that a road and services located at
levels close to the river might be flooded. She was, however, satisfied that the
Council in their detailed plans, would include necessary measures to counteract such a
possibility.
3.27
At Section 7 of her report the Inspector recommended to the Board that the CPO be
confirmed as proposed by the Council. Having regard to the submissions made by the
Council and the objection to the CPO both prior to and at the oral hearing, and to the
report of the person who conducted the oral hearing into the objections and to the
purpose of the acquisition as set out in the CPO, it was considered that the acquisition
by the Council of the lands referred to in the CPO was necessary for the purposes
stated and the objections could not be sustained having regard to that necessity.
Step 6 – Decision of the Board:
3.28
The Board accepted the Inspector’s recommendation and decided to confirm the CPO
without modification, by Order dated the 25th April 2006. The Order stated that the
Board’s decision to confirm was based on the reasons and considerations set out as
follows:
“Having considered the objections made to the Compulsory Purchase
Order and the report of the person who conducted the oral hearing into
the objections and having regard to the purposes of the compulsory
acquisition as set out in the Compulsory Purchase Order, it is
considered that the acquisition by the local authority of the lands in
question is necessary for the purpose stated in the Order and the
objections cannot be sustained having regard to the said necessity.”
28
Steps 7 and 8 – Possible Challenge / CPO Operative:
3.29
The Council notified Mr. Felton (on behalf of Mr. Irwin’s Committee) and Mr. Nolan
of confirmation of the CPO by letters dated the 10th May 2006. Notice of the
confirmation was also published in the Wicklow People on the 11th May 2006. The
letters and the newspaper notice stated that an application for Judicial Review of the
Board’s decision to the confirm the CPO could be made to the High Court within
eight weeks in accordance with Section 50 of the 2000 Act. No application for
Judicial Review was made to the High Court. In the absence of same this CPO
became operative three weeks from the date on which the notice of the Board’s
decision was first published.
Step 9 – Notice to Treat:
3.30
The Council served a Notice to Treat on Mr. Felton (on behalf of Mr. Irwin’s
Committee) and on Mr. Nolan under cover of letters dated the 12th July 2006 and
these letters appear to have been sent by registered post on the 13th July 2006. Service
of the Notice to Treat was done pursuant to Manager’s Order dated the 12th July 2006.
The Notices stated that the CPO was now operative and that the Council had decided
to acquire and was willing to treat for the purchase of the several interests in the
lands. The Notice required the person notified to furnish a signed statement to the
Council on or before the 18th August 2006 dealing with certain matters. These were
firstly the exact nature of the interest in the lands in respect of which compensation
was claimed by the person notified, and secondly details of the amount of
compensation claimed by that person for his interest in the land and setting out how
such amount had been calculated. As stated earlier, the date of service of the Notice
to Treat is an extremely significant event in the entire CPO process, as Section 84 of
the 1966 Act provides that the value of the land acquired shall be set by reference to
the date of service of the Notice to Treat. In the present case, the Council were stuck
with the fact that the value of the land acquired was set by reference to the value at the
height of the market in July 2006.
29
Step 10 - Entry:
3.31
In the present case the Council did not exercise the power of entry prior to payment of
compensation. If it had done so it would have been liable for interest on the
compensation from the date of entry to the date of payment of compensation.
Therefore it made no sense to serve a Notice of Entry in relation to this CPO, and
vacant possession was later received by the Council at the closing of the transaction
on the 31st August 2011.
Steps 11 to 13 – Claims for Compensation and Arbitration:
3.32
A Notice to Treat dated the 17th August 2006 was furnished to the Council by Lennox
Estates on behalf of Mr. Irwin. The Notice stated that Mr. Irwin was the freehold
owner of the lands, and claimed an amount of €10,425,000 for compensation for the
purchase of Mr. Irwin’s interest in the lands. As regards setting out how such amount
had been calculated, the Notice stated that the valuer’s opinion as to a reasonable
amount was calculated having regard to three comparable sales of land in the area,
and details of these three comparables were set out and a weighted average of these
comparables was relied upon.
3.33
A Notice to Treat dated the 16th August 2006 was furnished to the Council by Ganly
Walters on behalf of Mr. Nolan. As regards showing the exact nature of Mr. Nolan’s
interest in the lands, Ganly Walters stated that they had been advised that Mr. Nolan
remained the sole and exclusive occupier of the lands, and had had the beneficial use
of the property effectively for his lifetime and more particularly on a rent-free basis
upwards and over for the past 25 years. They understood that the claimant’s title was
possessory. The Notice claimed compensation in the total amount of €6,349,325,
being €5,608,800 for the value of the lands being compulsorily acquired and an
amount of €640,525 for temporary disturbance. As regards setting out such amount
had been calculated, no comparables were set out as in the case of the other Notice to
Treat. There was simply a general description of the subject property, and a statement
that this type of holding would command a serious premium if brought to the market.
30
There was also a reference to the main effects of compulsory purchase on Mr. Nolan,
and a statement that the acquisition would render the present agricultural enterprise
carried on by Mr. Nolan inoperable, thus requiring the acquisition of alternative land
or the destruction of livestock.
3.34
In the present case there was no agreement on the claims for compensation prior to
arbitration. After receipt of the Notices to Treat the Council initially asked Remax
Garden County Auctioneers (“Remax”) in November 2006 to carry out a valuation of
the CPO lands on behalf of the Council. The Remax Valuation dated the 11th January
2007 valued the lands at €7m, having referred in a very general way to comparable
sales of similar zoned lands in the area. There was also reference to access to the
lands being limited and a certain discount was allowed for same. No reference was
made to any issue of risk of flooding.
3.35
Following receipt of the Remax valuation the Council decided to get an alternative
valuation done. There is a note on file dated the 9th March 2007 recording this
decision, and the note also records that Ms. Catherine Halligan, Senior Executive
Officer, Housing Directorate of the Council spoke with Mr. Ray Hanley of G.V.A.
Donal O’Buachalla (“O’Buachallas”) , regarding this alternative valuation. However,
a letter of instructions did not issue to Mr. Hanley until the 30th January 2008, and this
was prompted by a reminder letter from Lennox Estates dated the 21st January 2008
stating that the Wards of Court Office had requested a report as to progress with
resolving this CPO. This delay from March 2007 to January 2008 may be partly
explained by the fact that Mr. Hanley had left the firm during the intervening period.
By letter dated the 4th April 2008 Mr. Jack Devlin of O’Buachallas sought further
information from the Council regarding various matters. Further communications
between Mr. Devlin and the Council followed, leading ultimately to Mr. Devlin’s
Report and Valuation dated the 30th June 2008 (“the O’Buachallas Valuation”).
3.36
As regards basis of valuation, under the heading “special assumptions” Mr. Devlin
stated that for the purposes of the report O’Buchallas had to provide two separate
valuations, one on the basis that the property was held freehold by Mr. Irwin and that
access was limited to the track off the R761, and the second on the basis that Mr.
31
Nolan had acquired ownership of the property through adverse possession and that
access could be provided through his adjoining property. The relevant valuation date
was the 12th July 2006, i.e. the date of the covering letters which accompanied the
notices to treat. The description of the subject property mentioned that the site sloped
gently to a west-east direction towards Three Trout Stream. As regards ground
conditions, it was stated that O’Buachallas had assumed “that there were no adverse
ground conditions such as flooding”, in considering their valuation. The report
discusses the planning situation regarding the lands, and how the subject plot was
actually zoned for open space development as part of the area zoned Action Area Plan
Z1, as referred to above. The report noted that at the date of the Notice to Treat the
draft Greystones/Delgany Local Area Plan 2006 (“the LAP 2006”) was on display and
the subject lands were zoned R2 “to preserve and improve residential amenity, max
17.3 units/hectare” which draft plan was subsequently adopted with this zoning
provision in December 2006. The report then set out some of the planning history of
certain adjoining lands and also noted that under the LAP 2006 a portion of the
subject lands adjacent to the Three Trout Stream was also zoned green corridor “to
protect the biodiversity value of the Three Trout Stream and associated habitat areas,
preserve ecological buffer areas either side of the stream free of development, protect
the flood plain of the stream, provide a green route (pedestrian and cycle linkages)
along the course of the stream from the coast to Delgany village and westwards to the
Glen of the Downs”.
3.37
Section 11 of the report dealt with valuation considerations. As regards location, the
subject property was located in an area where there had been considerable
development in recent years. As regards development potential, the subject property
had no frontage and the existing access was via a narrow track leading off the R761.
However, alternative access could in theory be provided from three locations. It was
necessary to have regard to the local planning history and the reasons set out in the
refusals of previous planning applications which highlighted the issues of poor access
and traffic hazard. If the subject property was owned by Mr. Irwin, the property’s
access to the R761 was confined to a long, three-metre wide laneway, totally unsuited
to development. It appeared that the most suitable option for the provision of access
for the development of the subject site (ignoring access via Burnaby Lawns) was via
32
the
adjoining
Zapi/Ballymore
development.
Under
the
heading
“Market
Commentary” Mr. Devlin noted that the property market was particularly buoyant in
July 2006 with strong demand for new homes in Greystones, however the subject site
was severely disadvantaged in terms of access. He concluded that, aside from the
Council, the most likely party interested in acquiring the plot would have been
Zapi/Ballymore for incorporation into the Charlesland development.
He did not
believe that any third party developers would compete for the acquisition of these
lands, given the deficiencies in access. It was his opinion that Zapi/Ballymore would
offer a price reflecting the unsuitability of the access to the lands and the fact that the
potential for housing development could only be realised through development via
Charlesland. In the circumstances, therefore, the developer would not pay a price
equating to the value of zoned and serviced development land, which was capable of
independent and immediate development, but rather would pay a price reflecting the
fact that they controlled the only access suitable for development and offer a discount
price accordingly. Having regard to all of these valuation considerations Mr. Devlin
estimated compensation in the event that the lands were owned by Mr. Irwin at
€4,580,000, or in the event that the lands were owned by Mr. Nolan at €5,215,000.
3.38
Following receipt of the O’Buachallas Valuation on the 1st July 2008 it appears that
the proposed social housing scheme on these lands was effectively “mothballed”, as it
appears to have come clear around this time that this scheme was not likely to proceed
in the near future because of the collapse of the national finances and the lack of any
further funding for new social housing projects, as set out at paragraph 3.08 of my
first report. The Council did make an application to the Department for sanction to
borrow a potential compensation figure of €5,000,000 in respect of the CPO lands in
August 2008, which approval was ultimately granted by the Department in July 2009.
However the Council did not drawdown any such loan from the Housing Finance
Agency by the end of 2009 as the CPO compensation figure was still not agreed, and
the sanction lapsed at the end of 2009. All of this is set out in detail in my first report.
In the meantime there was very slow progress with seeking to agree the claims for
compensation, and the position continued to be complicated by the competing claims
to ownership.
By email dated the 5th December 2008 Ms. Halligan informed
O’Buachallas that Mr. Irwin and Mr. Nolan had both died recently, and that their
33
respective estates were anxious to try to move the process on as the beneficiaries of
Mr. Irwin’s estate were anxious to bring closure to this CPO. By further email dated
the 10th December 2008 Ms. Halligan asked Mr. Devlin of O’Buachallas to speak to
Mr. Gordon Lennox of Lennox Estates on the Council’s behalf regarding the CPO, in
the light of the contents of her previous emails. It appears from a document on file
that Mr. Devlin spoke with Mr. Lennox in January 2009 but both parties were busy at
the time and decided to leave this issue over for a little while, and that the matter then
went dormant during the rest of 2009. There were, however, certain internal
communications during 2009 which suggest to me that the Council had lost its
appetite for proceeding with the CPO by this time. Ms. Halligan sent a memo to the
Law Agent dated the 4th March 2009 stating therein as follows:
“A Notice to Enter was not served in this instance and I wonder is the
Council legally obliged to proceed with this CPO. It would suit us now
at this point not to have to purchase this land, as we are not in a
financial position to do so. We would have to borrow the money and as
you know there are restrictions on this at present.
I should be obliged to have your advice on this matter.”
3.39
In his replying Memorandum dated the 9th March 2009 the Law Agent referred to
Section 5 of the Acquisition of Land (Assessment of Compensation) Act, 1919
whereby an acquiring authority may withdraw any Notice to Treat served on a
claimant within six weeks after the delivery of a Notice of Claim and in effect walk
away from their confirmed CPO. In the present case the Council had not exercised
any such power within the stipulated period, and therefore it seemed to Mr. Sweetman
“that the Local Authority now has no way out of this particular CPO”. At the end of
his memo Mr. Sweetman made the following pertinent comment:
“I regret that this is not what you want to hear but unfortunately, the
provisions of the 1919 Act in a falling market work out against the
acquiring Authority, in this case, ourselves.”
34
After this advice from the Law Agent Ms. Halligan then discussed the matter with Mr.
Devlin on the 6th May 2009 and at that point Mr. Devlin was of the opinion that the
Council should ascertain who was the rightful owner of the lands and deal with that
party alone, as opposed to instructing a valuer to deal with both parties as only one
could own the property. Ms. Halligan sought the further advice of the Law Agent on
how to proceed, and by memorandum dated the 12th May 2009 the Law Agent
suggested that the Council should take its own expert advice from Senior Counsel. It
did seem to him however, that the ultimate resolution of the ownership dispute would
be for the reputed owner to bring Court proceedings seeking a declaration that he, as
reputed owner, was in fact the owner whom the local authority should deal with and
to whom the relevant compensation should ultimately be paid.
While a draft
Manager’s Order for the appointment of Senior Counsel was prepared nothing further
was done at that point and the matter lay dormant for the remainder of 2009.
3.40
Mr. Lennox revived the matter with Ms. Halligan in January 2010 and Ms. Halligan
then asked Mr. Devlin to contact Mr. Lennox on the Council’s behalf to try to sort out
the valuations for this land. Mr. Devlin’s replying email dated the 2nd February 2010
is interesting as he states therein that he had delayed taking up with Mr. Lennox as he
believed that the Council “didn’t wish to proceed with the acquisition (even though
the Notice to Treat has been served)”. By letter dated the 9th March 2010 Mr. Lennox
wrote to Ms. Halligan and referred to the lack of any further news of progress. He
asked whether he might reasonably expect to have the Council’s response to Mr.
Irwin’s claim for compensation, or failing which was it the Council’s position that
they wished to abandon this CPO process? This letter is further evidence of the
Council displaying a lack of appetite for progressing with this CPO by this time, and
of Mr. Lennox detecting same. On receipt of this letter Ms. Halligan again sought
advice from the Law Agent as to how to proceed and by memorandum dated the 22nd
March 2010 Mr. Sweetman stated that he would require more information from
Felton McKnight Solicitors before he could advise further.
3.41
In the meantime, Mr. Devlin met with Mr. Lennox on the 29th March 2010 to discuss
the matter, and reported back to Ms. Halligan by letter dated the 1st April 2010. Mr.
Devlin outlined to Mr. Lennox at the outset that the Council’s preference would be
35
not to proceed with the acquisition of the lands and that funding would not be
available. Mr. Lennox pointed out that the Council could not withdraw from the
purchase at this stage without the landowners’ consent and he doubted that this would
be forthcoming. For the purposes of opening negotiations, Mr. Devlin advised Mr.
Lennox that in O’Buachalla’s opinion the lands were of little value, given the
deficiency in access and accordingly the maximum figure which they were prepared
to recommend for the Council’s acceptance was €200,000 per acre. Mr. Lennox
advised Mr. Devlin that he could not possibly recommend his clients to consider an
offer at the proposed levels, but he agreed to take instructions and revert to Mr.
Devlin. In his report back to Ms. Halligan, Mr. Devlin pointed out that the Notice to
Treat in this case was at the peak of the property boom and sales of residential zoned
land at that time suggested values of up to €3.85m per acre. He advised Ms. Halligan
that the stated figure of €200,000 per acre would clearly not be sustainable at
arbitration, but if the Council were to be forced to acquire this property, then
O’Buachallas had endeavoured to reduce the claimant’s expectations by making an
offer at the lowest possible level.
3.42
The above meeting appeared to mark the end of any efforts to seek agreement on the
claim made by Mr. Irwin, and by application dated the 5th May 2010 the beneficiaries
of Mr. Irwin’s estate applied to a body known as the Reference Committee for the
nomination of a Property Arbitrator to determine the question of compensation, in
accordance with the relevant legislation. By Notice dated the 18th June 2010 the
Reference Committee nominated Mr. Eoin O’Buachalla as Arbitrator to determine the
said question.
Step 14 - Service of Notices:
3.43
As regards Step 14, the requirements in the relevant legislation for the publication of
certain notices, subsequent to nomination of a Property Arbitrator, did not apply in the
present case as the Arbitrator was nominated on the application of the claimants.
36
Step 15 - Arbitration:
3.44
The next phase of this saga was preparation for the arbitration hearing which was
ultimately to take place the following year on the 24th March 2011. By letter dated
the 24th June 2010 the Arbitrator notified the parties that he proposed to hold the
arbitration hearing on the 24th September 2010 and he gave directions regarding
various matters, including the submission of pleadings and the exchange of expert
reports etc. The Solicitors for the claimants delivered a Statement of Claim on or
about the 5th August 2010 and claimed that the lands were valued at approximately
€10,425,000 as of the date of the Notice to Treat, as per the claim in the Notice to
Treat dated the 17th August 2006. The Law Agent sent a copy of the Statement of
Claim to Mr. Devlin when he received it and by letter dated the 24th August 2010 he
sent him on a draft Reply and asked him for his views. The Law Agent made
reference to issues such as planning, access and access to services. He noted that Mr.
Lennox had put forward comparables in the Notice to Treat and as regards
Killincarrig Lodge he commented that this property may have easier services and no
risk of flooding etc. The draft Reply awaited the input of Mr. Devlin as regards
certain points, in particular the Council’s position regarding the value of the lands as
of the date of the Notice to Treat.
3.45
By a memorandum of the same date to Ms. Halligan the Law Agent referred to Mr.
Devlin’s view that the biggest reduction in value was the fact that the subject property
was in fact land locked by a third party property between it and the R761, in
circumstances where the R761 was untenable at that point in that in its present state
no permission for development would be given fronting out on to the present road
formation. The Law Agent sent a preliminary brief to Esmonde Keane S.C. by letter
dated the 27th August 2010. The history of the matter was set out and references
made to issues of access and road frontage, but one might note that no reference was
made to any issue of flooding at this juncture. Mr. Devlin reverted to the Law Agent
by letter dated the 27th August 2010 and suggested a number of amendments to the
draft Reply, including references to zoning, lack of services and access problems. As
regards values, Mr. Devlin suggested pleading a figure of €697,000, based on the
37
figure discussed with Mr. Lennox some months previously. However, Mr. Devlin
added the following important rider:
“As you will be aware from previous discussions with Mr. Lennox, we
indicated our willingness to recommend a settlement of compensation at
a rate of €200,000 per acre. However, you will appreciate that this was
purely for negotiation purposes and that we believe that the date of
valuation coincides with the height of the market and the comparable
evidence will in all likelihood result in a substantially higher award from
the arbitrator.”
3.46
Mr. Keane S.C. wrote back to the Law Agent by letter dated the 31st August 2010
having settled the draft Reply, and he noted that it did not appear as if the Arbitrator
had been appointed to determine the claim of Mr. Nolan in addition to the claim of
Mr. Irwin’s estate. Around this time the proposed hearing date was changed to the 1st
November 2010.
3.47
A consultation was arranged by the Law Agent with Mr. Keane S.C. for the 11th
October 2010. In advance of same a draft précis of his proposed evidence was
prepared by Mr. Mark Devereux, Senior Engineer in the Housing Section of the
Council. Paragraph 4 noted that the property presently consisted of a field which
varied in levels from approximately 17 meters above ordnance datum on the north
eastern corner adjacent to the Three Trout Stream to approximately 25 meters above
ordnance datum at the south western corner adjacent to the existing substandard
entrance laneway and the back of the adjacent Charlesland development. Paragraph 9
is also worth noting, wherein Mr. Devereux stated that any development which would
be carried out on the site would be constrained by the proximity of the Three Trout
Stream and the proposed pedestrian/amenity corridor which would make up to 30% of
the site incapable of development, and also that in addition a reasonable protection
zone would be included so as to ensure that the development would not be subjected
to flooding even in an extreme flooding event. The consultation went ahead on the
11th October 2010, and it is clear from the Law Agent’s notes that among the issues
discussed was the flooding issue, and the potential for works to raise ground levels
38
pursuant to the Barry Report recommendations. After the consultation the Law Agent
sent a memorandum to Ms. Halligan dated the 12th October 2010, and this
memorandum is a useful illustration of the uncertainty regarding the compensation
which the Arbitrator might award. Mr. Keane had mentioned to the Law Agent that
the Council should give serious thought to preparing and filing an unconditional offer
at around €600,000 - €650,000 and on the day be in a position to offer €1.2m / €1.3m
to purchase these lands. At the same time Mr. Devlin indicated that he would be
concerned that the Arbitrator might, quite simply, take values generally in the area
based on comparables put forward by Mr. Lennox and quite simply take one third or
possibly one half of that value off because of the poor quality access etc. While this
would be a formulaic approach and not necessarily in accordance with appropriate
valuation principles, nevertheless it was something that an Arbitrator might quite
reasonably do and this could land the Council with a bill of perhaps €4m / €5m,
depending on the view the Arbitrator would take of the comparison evidence. In those
circumstances the Law Agent felt that the Council should give serious thought to the
unconditional offer suggested by Mr. Keane.
3.48
By letter dated the 19th October 2010 the Law Agent furnished the Arbitrator with a
booklet containing the précis of evidence of the Council’s valuer, Mr. Devlin, the
Council’s Engineer, Mr. Devereux, and the Council’s Engineer, Mr. Fergal Keogh,
Senior Engineer in the Planning Department of the Council. On the same date the
Law Agent delivered copies of the same booklet to the Solicitors for the Claimants,
and requested in exchange a set of their clients’ précis of evidence. The contents of
the précis of evidence merits some mention, as they illustrate the attitude of the
various experts towards these lands as of mid-October 2010 with the arbitration
hearing due to commence on the 1st November 2010. The précis of evidence of Mr.
Devereux was similar to the draft précis referred to above with the references to the
rising levels of the field as one moved in a south western direction away from the
Three Trout Stream, and to the constraints on development arising from the proposed
pedestrian/amenity corridor and a reasonable flood protection zone. The précis of
evidence of Mr. Keogh was dated the 18th October 2010 and dealt with the
development potential of the subject site, having regard to the recent planning history
and some other relevant applications in the area. Various points were noted in
39
relation to the development potential of the site and Mr. Keogh referred to the
flooding issue as follows:
“The existence of a flooding problem was indicated in submissions to the
Board at the time of the CPO hearing. Furthermore, flooding has been
an issue along the Three Trout Stream historically. A report in this
regard was prepared for the Council by the Consultants JB Barry &
Partners entitled “Storm Water Review – Three Trout Stream”, in
February 1997. Any restrictions that were identified due to flooding
would impact on the development potential…”.
Mr. Keogh’s conclusion was that were the zoning objective of public open space to be
disregarded then the site could be developed, subject to the principles of good design.
The quantum of the development could be limited by the requirements for a green
area along the Three Trout Stream and any potential flooding issues. Access was a
serious difficulty for this site, and without adequate access permission for
development would not be granted.
3.49
As regards the précis of evidence of Mr. Devlin, while he again emphasised the issue
of inadequate access as he had done in his June 2008 report, he now highlighted also
the alleged additional deficiencies of open space zoning and risk of flooding on a
portion of the lands. As regards comparables, he focused on the purchase by Zapi
Developments of adjoining lands in July 2005 for €3.2m, equating to €2,133,330 per
hectare. Allowing for an increase in the market of 20% between July 2005 and July
2006, but also allowing for a deduction for the alleged deficiencies of the subject site
at 60%, leaving a net reduction of 40%, he arrived at a valuation of €1,436,000.
.
3.50
By memorandum dated the 20th October 2010 the Law Agent suggested to Ms.
Halligan that the Council should consider making an unconditional offer of roughly
€1.5m in this case.
This was clearly a substantial increase in the suggested
unconditional offer figure mentioned by the Law Agent in his previous memorandum
dated the 12th October 2010, just over a week beforehand, but was roughly in line
40
with the most recent valuation furnished by Mr. Devlin in his précis of evidence dated
the 18th October 2010, and was presumably arrived at on that basis.
3.51
By letters dated the 20th October 2010 the Law Agent furnished Mr. Keane and Mr.
Devlin with copy of the précis of evidence of the other side and the following points
might be mentioned in relation to same. The first précis of evidence was in the form
of an expert report from Mr. Frank O’Gallachoir, Planning and Development
Consultant dated the 13th October 2010. In his report Mr. O’Gallachoir focused on
the planning history of the relevant area and on the general planning policy affecting
the acquired land. While he mentioned that the Three Trout Stream runs along the
northern boundary of the subject lands and separates it from Burnaby Lawns and that
the ground levels of the property fall gently from the south – west corner to the north
– east, no reference was made to any issue of risk of flooding. Mr. O’Gallachoir’s
conclusions were that the lands form part of the Z1 Action Area which was
specifically designated for development in the 1999 Local Area Plan and he felt that
adjacent developments which were permitted in the area prior to July 2006 established
a precedent for the density, site layout and servicing of the subject lands. A second
précis of evidence was in the form of an expert report from Mr. Michael Browne,
Chartered Structural Engineer, dated the 14th October 2010. His report dealt with the
availability of services and potential access to the subject lands and in his opinion the
lands could be accessed via the existing Burnaby Lawns estate, by means of a bridge
over the Three Trout Stream, or alternatively there could also be access from the
Charlesland Estate to the South. His conclusion was that this was an excellent site in
a prime location capable of being easily and readily serviced to provide valuable
housing units. The most significant précis of evidence was probably that of Mr.
Gordon Lennox dated the 13th October 2010, and this was really an expanded version
of the Irwin Notice to Treat set out above. In describing the location Mr. Lennox
mentioned that the lands were bounded in part by the Burnaby Lawns estate and
separated from same by the Three Trout Stream, but again no reference was made to
any issue of risk of flooding. The key aspect of his précis of evidence was his
detailed treatment of eight comparable sales of land in the area, and his stated opinion
of the open market value of the subject lands as of the 12th July 2006 in a figure of
€10,425,000. He stated that his opinion was shaped primarily by the first three
41
comparables in his schedule of comparables, being the same three comparables relied
upon in the Notice to Treat and he concluded that a weighted average of these three
comparables yielded a figure per acre/per hectare leading to an amount of
€10,426,236 which he had rounded to €10,425,000 as stated. Four of the other
comparables were set out in order to further illustrate the background to speculative
land purchases by consortia of investors and residential developers, in the year or so
prior to the Notice to Treat, and the eighth comparable was added for the purpose of
grounding a figure for the most conservative category of land to transact locally
within two years of the Notice to Treat in a “cooling” market.
Mr. Lennox’s
conclusion was that if the subject land had been brought to open market in 2006, in
common with his first three comparables, then the very competitive bidding evident in
the other transactions would in all probability have produced a sale price in excess of
€10,000,000 and he reiterated his stated opinion of open market value as of the 12th of
July 2006 in the figure of €10,425,000.
3.52
On or about the 27th October 2010 the claimants’ Solicitors sent an email to the Law
Agent containing some comments from Mr. Lennox, the claimants’ valuer, on the
recent précis of evidence of Mr. Devlin. In response to Mr. Devlin’s section on
ground conditions, Mr. Lennox commented as follows:
“Why, if the land is allegedly prone to flood, do Wicklow County
Council’s own Reports from the time of the CPO hearing describe the
land as being suitable for housing? Equally, would not the County
Council Estate (Burnaby Lawns etc.) as built be equally prone?”
Mr. Lennox went on to strongly dispute Mr. Devlin’s treatment of valuation
considerations and he disagreed absolutely with Mr. Devlin’s assertion that his
comparables were of no assistance in determining the market value of the subject
lands. He criticised Mr. Devlin’s reasoning on price, in terms of Mr. Devlin having
allegedly selected just two comparables at the lowest achieved rate per hectare/acre
instead of taking a more representative “basket” of transactions within a reasonable
radius of the subject lands and under the auspices of the same section of the County
Development Plan governed by the Greystones/Delgany area proposals.
42
3.53
These comments from Mr. Lennox were sent on to Esmonde Keane S.C. and to Mr.
Devlin in advance of a meeting with them later that day, and may have had an impact
upon potential values or settlement terms then under consideration, not necessarily in
terms of acceptance of the comments of Mr. Lennox but in terms of displaying the
serious conflict of evidence which was looming before the Arbitrator. A lengthy
consultation was held with Esmonde Keane S.C. and Mr. Devlin on the 27th October
2010, and following this consultation the Law Agent sent an important memorandum
to Ms. Halligan and to Mr. Michael Nicholson, Director of Services, Housing and
Corporate Estate dated the 28th October 2010. This Memorandum is particularly
important as it shows the crystallised thinking of the Council’s principal advisors as to
potential settlement immediately prior to the scheduled hearing date of the 1st
November 2010, and it appeared that this thinking eventually carried through to the
ultimate hearing date in March 2011. In his memorandum the Law Agent pointed out
the difference between the valuations of Mr. Devlin and the claimants’ valuer, Mr.
Lennox, whereby Mr. Devlin considered that the property was worth somewhere
between €800,000 and €1m per acre whereas Mr. Lennox was taking comparisons of
about 2½ times that, i.e. €2m to €2,500,000 per acre or thereabouts. He noted that Mr.
O’Buachalla had a reputation of being more generous to claimants than some former
Arbitrators. He mentioned that Mr. Devlin and Mr. Keane were both very concerned
that if the claimants’ figures were, with some deductions, accepted by the Arbitrator
and even if he then made an allowance of 1/3 because of the difficulty in gaining
access, an award might still be made of something of the order of €5,500,000 to
€6,500,000. Mr. Devlin’s best comparison would provide a purchase price of €3.08m
in round figures. Mr. Keane had asked that the Council consider the possibility of
settlement and, while Mr. Devlin’s valuation was at roughly €1.5m in round figures,
Mr. Devlin and Mr. Keane had asked for authority to approach the Irwin’s Senior
Counsel to see if the matter could be resolved without the necessity for taking the risk
of running the arbitration. The figure that Mr. Keane was likely to have to discuss
with the other side was of the order of €2.7m in his view, and Mr. Sweetman asked
the Council officials to consider whether or not they were in a position to instruct Mr.
Keane and give him a total of €3m to negotiate with.
Mr. Sweetman felt it
appropriate to put this proposition to the Council officials in writing so that they were
43
aware “that there is, in the view of both Jack Devlin and Esmonde Keane, a
significant risk that if the matter goes to arbitration, the Arbitrator may make an
award somewhat higher and possibly of the order of €5,500,000 to €6,500,000 as
mentioned above”. The Law Agent regretted that this was not an exact science but he
thought it might well be wise to see if the matter could be resolved. Any agreed
payment would be conditional on the Irwins eliminating the potential claim from Mr.
Nolan’s estate.
3.54
By a further memorandum dated 28th October 2010 the Law Agent raised certain
matters with Mr. Devereux, and in particular raised the issue of the area liable to
flooding in the context of amending a map which was then in existence. He asked
Mr. Devereux to send a map showing the proposed roadway that Mr. Devereux had
sketched out for purposes of access and his costing because, in particular, that map
also showed the area that was liable to flooding. It appears that Esmonde Keane S.C.
had seen this map which Mr. Devereux had sent to Mr. Devlin, and Mr. Keane had
suggested that the area liable to flooding would be amended slightly by being
crosshatched or shaded, and that it would also be helpful that the area, or approximate
area, could be calculated. It appears that the map being referred to here may be a draft
drawing dated October 2010 entitled “Lay Out Proposed New Roadway”, which draft
drawing also shows the area of the subject site over 17.50 metres contour as 2.27
acres outlined and shaded in red.
A copy of this draft drawing is attached at
Appendix 4 hereto. The clear implication of this draft drawing is that the Council
regarded the area outlined and shaded in red as not liable to flooding, on the basis that
the ground levels in this area were over 17.50 metres, which compared with the
maximum predicted flood level of 17.27 metres O.D. for a 100 year fluvial five year
tide, as per Table 4.1 at page 10 of a September 2009 update to the Barry Report. The
draft drawing also shows the area that is liable to flooding, in the sense that it shows
the remaining area of the subject site which is not outlined and shaded in red. In my
review of the voluminous Council’s files I have not seen an amended version of this
“map” or draft drawing which shows the area liable to flooding crosshatched or
shaded, as requested by Mr. Sweetman in the said memorandum.
As regards
calculating that area, Mr. Devlin did state in his précis of evidence dated the 18th
October 2010 that he had been advised by the Council that approximately 0.53
44
hectares of the subject area was below the 17.50 metre flood level, and this would be
0.53 acres of approximately 1.4022 hectares in total, or approximately one third of the
total area of the site. This would tie in with the draft précis of evidence of Mr.
Devereux referred to above. What is important about all of this is that it demonstrates
the Council’s belief that only approximately one third of the subject site was in any
way at risk of any flooding, and this area was adjacent to the Three Trout Stream
where there would be a green corridor and a flood protection zone.
3.55
The next event which arose was the adjournment of the arbitration hearing which was
scheduled for the 1st November 2006.
On the 28th October 2010 Rutherfords
Solicitors, on behalf of the personal representative of John Nolan, deceased, wrote to
the Law Agent proposing that the arbitration procedure initiated by Felton McKnight
Solicitors (on behalf of the Irwin estate), be deferred until the title issue was resolved.
They said that they had only very recently received notice of the arbitration procedure
and that the title issues between the Irwin estate and the Nolan estate could only be
resolved by the issue of High Court proceedings which were currently in the course of
issue. Rutherfords Solicitors then wrote to the Arbitrator the following day, the 29th
October 2010, along similar lines. They pointed out that on foot of advices received
from Senior Counsel they were that day issuing High Court proceedings seeking
declarations as to their client’s interest in the lands, together with necessary ancillary
orders, and enclosing a copy of the Plenary Summons. They claimed that their client
would be fundamentally prejudiced in his ability to effectually present his claim for
compensation, if the arbitration hearing were to proceed on the following Monday.
Given the nature of the proceedings about to be issued on his behalf, it was their
respectful view that the arbitration issue should be adjourned until such time as the
High Court proceedings had been determined. By letter dated the 29th October 2010,
the Law Agent informed the Arbitrator that the Council in the circumstances would
not oppose any application for an adjournment which might be made to him by
Rutherfords Solicitors.
The outcome of this entry into the fray by Rutherfords
Solicitors was that the matter did not proceed in any substantive way on the 1st
November 2010.
It appears that before the hearing commenced the legal
representatives of the Nolan estate agreed with the representatives of the Irwin estate
that they would meet and discuss their respective claims over the next few weeks.
45
Accordingly an application for an adjournment was made by Senior Counsel on
behalf of the Irwin estate, and it was agreed on consent that the matter be put back to
the 10th December 2010, for mention only in the first instance. Any progress in
relation to the title issue would then be reviewed and the fixing of a new hearing date
would then be considered. The Arbitrator had to reschedule the resumed hearing due
to unforeseen circumstances, and ultimately the arbitration hearing was rescheduled to
resume on the 24th March 2011.
3.56
As the resumed hearing day approached it was clear from the Law Agent’s file that
the substantive issues remained pretty much where they had been the previous
October, immediately in advance of the original hearing date of the 1st November
2010. The Council intended to rely upon the précis of evidence prepared earlier on
behalf of their witnesses in October 2010. By memorandum dated the 10th March
2011 the Law Agent gave certain directions to the Council representatives and
advised that by way of general preparation they should read the Council’s own précis
of evidence and those received from the other side, and also the letter from Mr.
Lennox dated the 22nd October 2010 with his comments on the précis of evidence of
Mr. Devlin as discussed above. The question of authorising Mr. Keane S.C. to
negotiate a settlement to a total figure of €3m as discussed previously in October 2010
appears to have gone into cold storage while the matter stood adjourned. The Law
Agent returned to this issue in a memorandum dated the 23rd March 2011 to Ms.
Halligan. He stated that Mr. Devlin considered that if the Arbitrator were advised that
the Nolan and Irwin sides were now united i.e. that they had resolved their
differences, the Arbitrator might choose to make a substantial award on the basis of
an unencumbered freehold title. In that regard Mr. Devlin considered that the Council
team should seek authority to negotiate and the sort of figure he was looking at was
between €3m and €3.5m. This might or might not be sufficient to settle the case but if
the Council team were to negotiate with anything resembling serious intent, then they
would have to have that sort of figure available.
3.57
It appears that as a result of this memorandum Ms. Halligan did discuss the issue of a
settlement figure with Mr. Nicholson, and that Mr. Nicholson gave the Council team
authority to go to €3/€3.5m to settle the matter. This is recorded in the Law Agent’s
46
attendance note of the pre-hearing consultation with Mr. Keane S.C. and the Council
witnesses on the 24th March 2011. It is noted that while Mr. Devlin expressed the
view that his valuation was on a reasonably correct basis, he felt the Arbitrator would
probably give a significantly higher award, and after discussing the matter it was
agreed that the authority which Ms. Halligan had received from Mr. Nicholson to go
to €3 / €3.5m to settle the matter was reasonable. It was possible, however, according
to Mr. Devlin that the Arbitrator would award as much as perhaps €5m depending on
the view he took of Mr. Lennox’s comparison.
3.58
The Arbitration hearing then commenced later the same morning. At the outset the
legal representatives for the Irwin Estate and the Nolan Estate confirmed to the
Arbitrator that the title issue had now been resolved, by agreement between the Irwin
Estate and the Nolan Estate, and it was now acknowledged that there was no claim to
the subject property by the Nolan Estate. The first and ultimately the only witness
who gave evidence was Mr. O’Gallachoir on behalf of the Claimants. He first read
into the record his précis of evidence, and then answered a couple of questions from
his own Senior Counsel. After this he was cross-examined by Mr. Keane S.C. on
behalf of the Council. Mr. Keane first challenged Mr. O’Gallachoir in relation to the
availability of services to service the subject lands and then in relation to his
calculations as to the density of the development. At page 33 of the transcript Mr.
Keane moved on to the issue of flooding, and suggested to Mr. O’Gallachoir that he
had not considered the impact of flood risk in relation to his densities. The witness
accepted that it hadn’t been considered explicitly but he was not aware of any
significant flooding problems in the area. From his understanding and from his
personal knowledge he thought flooding would not be a significant issue, particularly
in the form of layout that he thought most people agreed would be likely for this site.
Mr. Keane then put to the witness the evidence given by Mr. Nolan at the oral hearing
into the CPO regarding flooding in this field in the past, and in particular flooding of a
number of houses in the Burnaby Lawns estate in 2002. There was then a dispute
about Mr. Keane seeking to rely upon hearsay evidence, and the Arbitrator directed
that Mr. Keane would have to produce engineering evidence if he wanted to rely upon
the point that the site was subject to flooding. Mr. Keane accepted that requirement
for engineering evidence in due course, but in the meantime he suggested to Mr.
47
O’Gallachoir that keeping out of the floodplain would act as a restriction in relation to
the extent of development on the subject site. The witness repeated that he wasn’t
aware specifically of flooding in this area, but he thought it was obvious that the kind
of site layout for the development of this land would provide a buffer between any
housing development and the stream.
3.59
Mr. Keane asked would this be by virtue of setting back the development on the site
away from the stream, and the witness confirmed that it would be to ensure that a
sufficiently wide public open space was available in case of any flooding. Mr. Keane
then moved on to suggest that there were certain other potential restrictions on
development such as the objective in the 1999 Local Area Plan for the provision of
cycle and pedestrian ways in an east-east/west access along the stream, and the fact
that the subject lands appeared to be within the area zoned for public open space in
the Z1 Action Area Plan in the 1999 Local Area Plan. At the end of the crossexamination the Arbitrator asked Mr. O’Gallachoir would he reconsider his figure for
density of development of 28 houses per hectare, “having heard and having
mentioned some of the difficulties with this site yourself”. After some delay the
witness said that 28 was the maximum but given the constraints on the site and there
were a reasonable number of constraints on the site, he would think it was likely to be
lower than that and he thought maybe 24 houses per hectare. The hearing then broke
up for lunch at the conclusion of Mr. O’Gallachoir’s evidence.
3.60
After the luncheon adjournment Senior Counsel for the Irwin Estate informed the
Arbitrator that the parties had reached an agreement which had been reduced to
writing and signed by the parties. Under the settlement agreement the Irwin claimants
agreed to convey good marketable unencumbered fee simple registered title to the
subject lands, and the Council agreed to pay the sum of €3m in consideration of the
said conveyance, such sale to close on the 31st August 2011. The Council also agreed
to pay the pre-reference costs and the costs of the reference to arbitration of the Irwin
Claimants, such costs to be taxed in default of agreement. It was noted and confirmed
that the Nolan Claimant had reached an agreement with the Irwin Claimants and he
acknowledged in his capacity as legal personal representative of the estate of John
Nolan deceased that he would execute all necessary documentation to confirm a good
48
marketable title, in consideration of the matters set out in the settlement agreement.
There were some other miscellaneous provisions and finally there was a term that the
arbitration would be adjourned generally with an Order for taxation of costs in default
of agreement, and with liberty to apply in relation to the terms of the settlement.
Step 16 – Arbitration Award:
3.61
In the present case it appears that no formal award was ultimately required from the
Arbitrator. An award by an Arbitrator resembles an Order made a Court when it
decides a case. It appears from the transcript that Counsel debated the possible form
of any award that the Arbitrator might make, after the settlement was announced. The
Arbitrator suggested that any award would cite that the compensation amount was
agreed, and the order which he would make would be in relation to costs. However,
the Arbitrator noted that there would be stamp duty payable on the award which
would be payable by the Council, and for that reason the parties indicated that they
probably would not need a formal award and they could implement the terms of
settlement without requiring same.
Steps 17 and 18 – Taking Title and Payment:
3.62
In the present cast the Council acquired title to the subject lands by virtue of a Deed
of Transfer dated the 31st August 2011. Pursuant to this Deed of Transfer Mr. Edwin
Irwin and Mr. Herbert Irwin as personal representatives of Mr. William Irwin
deceased, the registered full owner, in consideration of the sum of €3m transferred all
of the property comprised in Folio 2915 of the Register of Freeholders, County
Wicklow to the Council. The Council also received a Deed of Waiver dated the 31 st
August 2011 executed by Mr. Thomas Alphonsus Nolan, the legal personal
representative of John Nolan deceased, whereby Mr. Nolan waived any claim of the
deceased over the property. A formal contemporaneous closing took place on the 31st
August 2011 whereby the Council gave the Solicitors for the Irwin Estate a cheque for
the €3m agreed compensation. No interest was payable in relation to the CPO, in
circumstance where the Council had not entered the lands prior to payment of the
49
compensation. As regards payment of costs, the process of submitting invoices and
seeking to agree costs has proceeded subsequent to the 31st August 2001.
50
Chapter 4
4.01
The Specific Concerns of the Public Representatives regarding the Role of
the Council
In my Terms of Reference I have been requested to address the specific concerns of
the public representatives in the annexed documents regarding the role of the Council
and to consult as necessary with these public representatives. Some of the specific
concerns of the public representatives in the annexed documents relate to the role of
the Department rather than the role of the Council, and I have already addressed those
concerns at Chapter 4 of my first report, and I do not propose to address same again
unless there is some additional aspect arising relating to the role of the Council. As
mentioned at paragraph 1.11 above, I consulted and met with these public
representatives on a number of occasions during the course of my review in order to
clarify certain aspects of the concerns raised by them. Before dealing with the
specific concerns of the public representatives individually it is necessary to examine
some earlier matters raised by the Councillors in their report dated the 3rd November
2011.
Preliminary Matters
4.02
Under the heading “Background”, the Councillors refer to the fact that both Mr. Irwin
and Mr. Nolan were claiming title separately to the same property, i.e. the CPO lands,
“in a clear conflict of ownership”. Technically speaking there were conflicting claims
to ownership rather than a conflict of ownership, as there could only have been one
owner of the fee simple interest, to whom compensation would be payable.
If
necessary these conflicting claims would ultimately have had to be decided by the
Courts as the Property Arbitrator had no jurisdiction to determine same, but as
discussed in Chapter 3 the claim by the Nolan estate was ultimately compromised and
withdrawn. However, prior to this compromise the conflicting claims undoubtedly
added an extra layer of complication to this CPO and this complication was increased
when Mr. Irwin was made a Ward of Court along the way, and all of this gave rise to
delay and a lot of additional paperwork.
51
4.03
Under the heading “Council’s Valuation”, the Councillors suggest that the Council
employed valuation consultants GVA Donal O’Buachalla to carry out a market
evaluation of this land in 2008. In fact Mr. Devlin of O’Buachallas was originally
retained by the Council by letter dated the 1st March 2006, and in that letter Ms.
Gallagher stated that she was enclosing therewith “all documentation in relation to the
CPO procedure so far”. At that stage Mr. Devlin’s brief was to contact Mr. Lennox
with a view to entering into preliminary discussions regarding land valuations rather
than to do a formal valuation as such. The Council’s files show that O’Buachallas
were again briefed by the Council on 30th January 2008, and on this occasion they
were furnished with copies of three other valuations carried out to date, a copy extract
from the Local Area Plan 1999 and other relevant documentation. By letter dated the
8th May 2008 O’Buachallas were also furnished with a copy of the planning report
prepared by Mr. Fergal Keogh, Senior Engineer, Planning and Development Section
of the Council. I will return to this issue of the information furnished to O’Buachallas
when dealing with the 10th stated “issue of public concern” below.
4.04
Under the same heading the Councillors state that in 2011 “the O’Buachalla valuation
was once again used when the County Manager sought loan approval to raise a sum of
€3m by a vote of the Council on 18/7/11”. The Council are referring here to a report
prepared by Ms. Halligan of the Council dated the 29th June 2011 which report was
prepared for the information of the Council members pending the Council meeting on
the 18th July 2011. While the report dated the 29th June 2011 did make reference to
the O’Buachalla valuation dated the 30th June 2008, the request for approval for the
borrowing of €3m was ultimately based upon the settlement figure of €3m as agreed
in March 2011 and not on the June 2008 valuation figures. I will return to this issue
below.
4.05
Under the heading “Special Assumptions of the 2008 Report” the Councillors suggest
that Mr. Devlin of O’Buachallas made two incorrect assumptions in his 2008 Report,
firstly, that this property was held freehold by one or other of the Claimants, and
secondly that no ground adverse conditions such as flooding was present on the land.
As regards the first matter, it is clear that Mr. Devlin made an assumption along these
lines in Section 2 of his report under the heading “Special Assumptions”, and then
52
proceeded to provide two separate valuations to take account of this assumption as to
two alternative scenarios, but it is equally clear that this assumption was entirely
correct and in line with his instructions.
4.06
As regards the second matter, at Section 7 of his report under the heading “Ground
Conditions” Mr. Devlin stated that in considering our valuation “we have assumed
that there are no adverse ground conditions such as flooding…”. On the face of it this
assumption was clearly incorrect, as the issue of risk of flooding had featured during
the CPO confirmation procedure, albeit with a dispute as to the extent and
significance of the said risk. During the course of my review I consulted with Mr.
Devlin to clarify this apparent error and he furnished me with a detailed explanation
by letter dated the 7th December 2012. Mr. Devlin first confirmed that in preparing
his valuation in June 2008 he was fully aware of the potential of that portion of the
site along the Three Trout Stream to flood, and that the relevant information to this
effect was provided to him by the Council prior to undertaking the valuation. His
valuation was informed by his inspection of the site where he noted that its principle
inadequacy in terms of development potential was the lack of a suitable independent
access, and he also noted that a portion of the lands along the Three Trout Stream,
particularly in the north western corner, were low-lying and potentially liable to
flooding. He had reviewed all of the information provided to him by the Council,
including the submission regarding flooding made by Mr. Nolan to An Bord Pleanála
in 2005, and the response by Ms. Gallagher of the Council dated the 9th of February
2005, which included reference to the two principal recommendations of the Barry
Report, namely that the stream channel be upgraded to cater for a storm within the 30year return period, and that floor levels should be a minimum of 1metre above the
design topwater level. On the basis of his inspection and the information supplied,
Mr. Devlin had concluded that the questions of suitability of the site and flooding
raised by Mr. Nolan were not accepted by An Bord Pleanála in confirming the CPO.
He had concluded that the value of the site would not be materially impacted by any
risk for flooding, but that a more significant shortcoming in terms of development was
the inadequacy of access. Later in his letter Mr. Devlin referred to his experience that
Local Authorities do not get a sympathetic hearing when arguing before the Property
Arbitrators that a site is unsuitable for development for any reason (in this case
53
flooding), when An Bord Pleanála have already heard evidence on the matter and
confirmed a CPO for a particular use (in this case, housing).
4.07
Overall, while this stated assumption was literally incorrect, this was in my opinion
due to slightly loose language employed by Mr. Devlin and was really a matter of
form rather than a matter of substance. It is clear that Mr. Devlin was aware of the
risk of flooding issue as potentially affecting a portion of the site, but his opinion was
that the value of the site would not be materially impacted by any such risk. Ideally
his stated assumption in Section 7 of his Report would have included that
amplification or clarification, but it seems to me that his somewhat incomplete or
ambiguous statement did not affect the substance of his valuation.
4.08
Under the heading “Revised Valuation 2010” the Councillors state that on the 27th
August 2010 O’Buachallas gave a new market value of the CPO lands, revising the
valuation downwards to a figure of €697,000 taking all factors into account. They
complain that the revaluation of the lands was never disclosed to the elected Council
members prior to the vote on loan sanction on the 18th July 2011. Two issues arise
here, firstly, whether there was a significant revised valuation by O’Buachallas in
2010, and secondly whether there was some element of non-disclosure to the Council
members in July 2011.
4.09
As regards revised valuations, I have set out in Chapter 3 how the figure of €697,000
arose in Mr. Devlin’s letter to the Law Agent dated the 27th August 2010, and the
background and context in which that figure arose. This figure first arose out of Mr.
Devlin’s opening negotiations with Mr. Lennox on the 29th March 2010, as outlined in
Mr. Devlin’s letter to Ms. Halligan dated the 1st April 2010 where he recorded that
“for the purposes of opening negotiations” he had advised Mr. Lennox that in the
opinion of O’Buachallas the lands were of little value, given the deficiency in access
and accordingly the maximum figure which they were prepared to recommend for the
Councils acceptance was €200,000 per acre. The stated area of 3.46 acres therefore
led to a value of in the region of approximately €692,000. However, it is clear from
the text of the letter that this figure was suggested by Mr. Devlin “for the purposes of
opening negotiations” and he confirmed this by adding the following rider:
54
“Clearly, this position would not be sustainable at arbitration, but if the
County Council are to be forced to acquire this property, we have
endeavoured to reduce the Claimant’s expectations by making an offer at
the lowest possible level”.
4.10
On the 27th August 2010 Mr. Devlin relied again upon his earlier suggested rate of
€200,000 per acre, in the context of suggesting a figure for compensation to be
inserted into the draft Reply to the Statement of Claim which had been delivered by
the Claimants. However, Mr. Devlin added a similar rider to the effect that this was
purely for negotiation purposes and that the comparable evidence would in all
likelihood result in a substantial higher award from the Arbitrator.
In those
circumstances the suggested value of €697,000 did not in substance amount to a
revised valuation by O’Buachallas in August 2010, and it is clear from their
correspondence that they were not revising the factors taken into account in the June
2008 valuation. However, there was a form of revised valuation contained in Mr.
Devlin’s précis of evidence dated the 18th October 2010, as described in Chapter 3
above. While Mr.Devlin again emphasised the issue of inadequate access as he had
done in his June 2008 report, he now highlighted also the alleged additional
deficiencies of open space zoning and risk of flooding on a portion of the lands. As
regards comparables, he focused on the purchase by Zapi Developments of adjoining
lands in July 2005 for €3.2m, equating to €2,133,330 per hectare. Allowing for an
increase in the market of 20% between July 2005 and July 2006, but also allowing for
a deduction for the alleged deficiencies of the subject site at 60%, leaving a net
reduction of 40%, he arrived at a valuation of €1,436,000
4.11
The valuation of €1,436,000 was the valuation which Mr. Devlin intended putting
forward at the arbitration hearing which was scheduled to take place on the 1st
November 2010. As described above in Chapter 3, this hearing did not ultimately
take place until the 24th March 2011. In his letter to me dated the 7th December 2012
Mr. Devlin explained that, in advance of the rescheduled hearing, he gave
consideration to amending the estimated value by reducing the “deductions” for
disabilities from 60% to 50%, as the latter would have been more sustainable with the
55
Arbitrator. On further reflection he decided that a more appropriate deduction was
50%, and amended versions of pages 10 and 11 of his précis of evidence were
prepared for the hearing on the 24th March 2011. It appears from page 5 of the
transcript that this was flagged by Mr. Keane at the outset of the hearing, and it
appears from page 56 of the transcript that the amended text was circulated by Mr.
Keane just before the Arbitrator broke for lunch. The net effect of reducing the
deduction from 60% to 50% was that the valuation of the lands rose from €1,436,000
to €1,848,000.
4.12
While the documentary records show that O’Buchallas did furnish a revised valuation
of €1,436,000 in October 2010, which was later revised again upwards to €1,848,000
in March 2011, it must be borne in mind that this was in the context of presenting the
Council’s case in the most favourable light in order to secure the best possible result,
within the confines of the duty of an expert witness to give truthful and impartial
evidence. While Mr. Devlin was giving these revised valuations as his best
professional opinion, he was at the same time warning the Council that there was no
guarantee that the Arbitrator would accept his valuation and there was a significant
risk that the Arbitrator might make a much higher award, possibly of the order of
€5.5m to €6.5m.
4.13
As regards the alleged non-disclosure to the Council members, the position was as
follows. As set out in my first report, in recent years the most common way for local
authorities to fund the creation of land banks for social and affordable housing
purposes was to obtain loan finance from the Housing Finance Agency. In the present
case the settlement agreement arrived at on the 24th March 2011 required the Council
to pay the Claimants an agreed figure of €3m for compensation on or before the 31st
August 2011, and the Council wished to raise a loan for that amount. However,
pursuant to Section 106(7) of the Local Government Act, 2001 a decision to borrow
by a local authority is a reserved function, i.e. a function requiring a resolution of the
elected members as opposed to an executive function exercisable by the manager of
the local authority and those to whom he may delegate, and it was therefore necessary
to seek the approval of the elected members for the proposed borrowing. This
approval was sought at a special meeting of the Council on the 18th July 2011, and in
56
advance of same each member of the Council was notified about the matters arising
by letter from Ms. Halligan dated the 28th June 2011. The letter referred to the
arbitration hearing for the purpose of the CPO lands having concluded, the agreed
purchase price of €3m and the payment date of 31st August 2011, the up-to-date
zoning of the lands, and requested the approval of the Councillors for the borrowing
of the agreed sum of €3m. The Councillors were also furnished with an attached
report from Ms. Halligan dated the 29th June 2011, which set out some additional
details.
4.14
The attached report stated that the CPO had been issued on the basis of Mr. Mangan’s
report dated the 13th August 2004, as set out in Chapter 3. It referred to the claims for
compensation received on behalf of Mr. Irwin and Mr. Nolan, and the valuation of
these lands by O’Buachallas dated the 30th June 2008. It later concluded as follows:
“After a lot of detailed discussion and correspondence passing between
all parties the Irwin interest referred the matter to the Property
Arbitrator. This Hearing took place on the 24th March 2011 with a
settlement figure of €3m having been agreed between representatives of
the Irwin and Nolan Estates.
This amount has to be paid before the 31st August 2011 and your
approval is requested for the borrowing of €3m.”
4.15
As can be seen from the above, no reference was made in this report to the revised
valuation furnished by Mr. Devlin of O’Buachallas in his précis of evidence dated the
18th October 2010, nor to the amended version of same submitted to the arbitration
hearing on the 24th March 2011. On the one hand it could be argued that the revised
valuations were not all that relevant, as the bottom line was now the settlement figure
of €3m, and the net issue was whether the €3m was to be funded by the Council out of
its own resources or whether it should seek to borrow to pay for this land. On the
other hand the report did make reference to the original valuation of O’Buachallas
dated the 13th June 2008, and on balance it seems to me that an error was made in not
supplementing the information provided by referring also to the later revised
57
valuations of Mr. Devlin. The fact that Mr. Devlin had revised valuations at lower
levels, and at levels lower than the settlement figure of €3m, did not mean that there
was anything wrong with the settlement. In his letter to me dated the 7th December
2012 Mr. Devlin stated his opinion that this was an excellent settlement which would
not have been bettered by having the matter determined the Arbitrator, and in fact in
his opinion it was highly likely that the Arbitrator could have awarded compensation
well in excess of €3m for a number of reasons as set out by him. The report to the
Councillors could also have included some material along these lines regarding the
expert advice available to the Council in agreeing the settlement figure, and it seems
to me that it would have been in the interests of greater openness and transparency for
the report to have included this type of additional information, and it would have
saved some of the difficulties which later arose.
Issues of Public Concern:
4.16
The first stated concern which is relevant to this review is as follows:
“(1)
lt is now evident from documents disclosed subsequent to the Council
vote of the 18/7/11 that WCC were aware that the lands in question were
subject to serious flooding as outlined in the "Barry Report” of 1997 on
flooding in this area.
With this information why did WCC proceed to issue a CPO order on
lands that were subject to serious flooding, in fact a flood plain in
contradiction of national building policy and base common sense.”
4.17
It is necessary to examine carefully the component elements of this stated concern
which appear to be as follows. Firstly, that the Barry Report had outlined that the
lands in question were subject to serious flooding and were in fact a flood plain.
Secondly, that the Council were aware of this information at the time the CPO was
made on the 6th December 2004. Thirdly, that in so proceeding, the Council acted in
contradiction of national building policy and base common sense. As regards the first
matter, I have reviewed the Barry Report and it does not appear to me that this Report
outlined that the CPO lands were subject to serious flooding and were in fact a flood
58
plain. The Introduction stated that the report “assesses the capacity of the Three Trout
Stream and reports on the improvement works required to cater for future
developments within the stream’s catchment”.
So at the outset the context was
potential future development within the stream’s catchment, which catchment
includes the CPO lands the subject of this review. The report considers the capacity
of different sections of the Three Trout Stream, including the section shown between
Nodes 5A and 5B on an accompanying drawing, which section includes the CPO
lands. At paragraph 5.4.2 of the Report it states as follows:
“The capacity of this section of stream various considerably. Extensive
lengths of stream are inadequate to cater for a storm with a return
period of 5 years – Table 4.1. Some isolated short lengths of stream are
capable of carrying storms with a return period of 10 years and 50
respectively.”
4.18
The report goes on to make certain recommendations to upgrade the Three Trout
Stream in capacity terms in the context of future development within the stream
catchment, “in particular when development is contiguous to the stream itself” (see
paragraph 6.8.1) which would include the proposed development in the present case.
The principal recommendation was that the stream should be upgraded for a capacity
to cater for a storm with a 30 year return period. The recommended option for stream
improvement works in the area of the CPO lands was works to include the deepening,
widening, regrading and realignment of the existing stream, with the preferred option
being the open channel – earth lined (trapezoidal). In addition floor levels proposed
for developments adjacent to the stream should be pitched at a minimum 1.0 m above
the design top water level.
4.19
It appears to me from my review of the relevant files that the Council always believed
that both of the Barry recommendations could be complied with in the development
of this site, so as to avert the risk of flooding to the site. This was the essential
response of the Council from the outset to Mr. Nolan’s objection to the CPO in
relation to site suitability, as set out in the Council’s letter to An Bord Pleanála dated
the 9th February 2005. This was repeated and amplified in the evidence given by Mr.
Mangan on behalf of the Council at the oral hearing conducted by An Bord Pleanála
59
in March 2005. Mr. Mangan emphasised that any proposed development would take
place on the higher southern side of the field away from the stream, allowing the
linear park or green corridor to run along as required within the area adjacent to the
stream. It appears from Appendix 1 to the Inspector’s report that the Inspector had
sight of the Barry Report before completing his report. At page 21 of his report he
concluded that it seemed quite plausible that a road and services located at levels
close to the river might be flooded but he was, however, satisfied that the Local
Authority would in their detailed plans include necessary measures to counteract such
a possibility.
4.20
In conclusion on this issue, I think it is overstating the matter quite a bit suggest that
the Council were aware that the lands in question were subject to serious flooding or
were in fact a flood plain. At its height the Council were aware from the Barry Report
that there was a risk that flooding could occur in the lower levels of the field
immediately adjacent to the stream, and that this lower level area could constitute an
area of flood plain. However this area would be used for the provision of a linear
park and walkway in the northern section of the subject site, and detailed flood
prevention measures could be introduced at the design stage by the Council to
safeguard this area. In these circumstances, it does not appear to me correct to claim
that the Council was acting in contradiction of national building policy and base
common sense.
4.21
The second stated concern which is in part relevant to this review was as follows:
“(2)
In 2008, the Department of the Environment sanctioned a loan
approval of €5 million for the purchase of this land. However,
the Department had initially expressed in writing to WCC their
serious concerns at this funding application and have raised
issues surrounding the price being paid and the requirement of
the Council to purchase this land when they had adequate stock
of a land bank for social housing that remained un-used in the
area.
60
Who in the Department overruled these initial well founded
concerns by the Department and sanctioned the provision of the
€5m being the fund requested.”
4.22
I dealt with this stated concern at paragraph 4.02 of first report, insofar as this concern
related to the role of the Department. It is now necessary to consider this concern a
little further given that there are some underlying issues which relate to the role of the
Council. As stated at paragraph 4.02 of my first report, the files do not appear to
contain any document containing any such expression in writing of “serious
concerns” by the Department, or even raising issues in precisely the same terms as
stated by the Councillors. The closest documentary record of any such expression of
concern by the Department appears to be an internal Council memorandum from Ms.
Halligan to Mr. Nicholson dated the 25th July 2008. In that memorandum Ms.
Halligan states that she has not been dealing with the technical advisors in the
Department with regard to this CPO, but they have asked a Senior Engineer in the
Council to explain why we did this CPO as the Council had land next to this and that
the amount of the claims are also a big concern. It may be that the two underlying
issues of price and need flow from this document, but in any event the position
regarding these two issues is as follows. As regards the price being paid for the
amount of the claims, the position was that from approximately the end of September
2006 the Council was legally obliged to complete the CPO process, and it was stuck
with having to pay compensation by reference to the market value of the property as
of July 2006, close to the peak of the market. It would not be surprising if the amount
of the claims for compensation were a big concern for the Department in the same
way that they were a big concern for the Council, as the Department might have to
pick up the tab if the Council could not meet any award of compensation that might
ultimately be made by the Property Arbitrator. Trying to estimate what that ultimate
award might be was a matter which gave rise to a fair amount of speculation and
uncertainty, and in those circumstances there was a strong argument in favour of
trying to arrive at a reasonable settlement that was put forward. The files reviewed
by me suggest that a reasonable settlement was arrived at having regard to the best
expert advice available to the Council.
61
4.23
As regards the issue of issue of need, Ms. Halligan states in her memorandum that the
Department had asked the Council to explain why they did this CPO “as the Council
had land next to this”. This appears to be a reference to the Council lands of 10
hectares (approximately 25 acres) to the north east of the CPO lands, which lands
featured at the oral hearing conducted by An Bord Pleanála into the proposed CPO in
March 2005. As set out in Chapter 3, in his report the Inspector referred to the
evidence given by the Council that some of the 10 hectares would be severed by the
construction of the new road, and being located next to business uses would be more
suitable for a hotel. While the remaining 7 hectares (approximately 16 acres) could
accommodate 160 units, it was not the Council policy to accommodate such an
amount in one block for social housing, but rather to integrate social and private
housing so the maximum number of houses that could be provided would be 100. In
the light of the above and in the light of certain other information provided during the
hearing, the Inspector was satisfied that the need arising was in excess of the lands in
the ownership of the local authority and social housing that would be provided
through Part V requirement of development permitted in the immediate area, and the
housing that could be provided in the recently purchased lands at the southern end,
(Prettybush).
Notwithstanding the above I sought further clarification from the
Council in relation to this matter in the light of the reference in Ms. Halligan’s
memorandum to Mr. O’Brien having said that the Council had “to bankroll” this land.
The Council informed me that the 10 hectare or 25 acres was acquired from AMD in
1993, but was not available for social housing when the CPO was made in 2004. The
site was originally intended to guarantee or part-fund the development of Greystones
Harbour and both the Councillors and the Department were aware of these plans.
When it became clear from 2005 onwards that the Harbour project might be
developed as a self-funded PP Project, part of this site was earmarked for disposal to
finance the Greystones swimming pool and community centre. The site was also
earmarked for disposal to redeem the €9m loan for the acquisition and development of
Claremount College, Rathnew. All of this appears to be a matter of policy and of
course there could be legitimate arguments about the merits of this policy. However,
it papers from the confirmation procedure before An Bord Pleanála that even if the
remainder 7 hectares or 16 acres of this site had been available for social housing in
late 2004 this would not have been adequate to meet the existing need at that time, let
62
alone provide a land bank to meet future needs, and this appears to have been
accepted by the Inspector and by An Bord Pleanála itself.
4.24
The third stated concern relates to the Council not drawing down the loan finance of
€5m as originally approved before the end of 2009, and this has been dealt with at
paragraph 4.03 of my first report, and nothing further arises.
4.25
The fourth concern stated by the Councillors was as follows:
“(4)
Have WCC ever declared to the Department of Environment the
revised valuation report of Donal O’Buachalla of August 2010?.
What valuation report have WCC relied upon when seeking the
€3 million loan approval from the Department of Environment in
July 2011.”
4.26
This concern was already dealt with at paragraph 4.04 of my first report, but it may be
appropriate to address it further and to focus on the role of the Council as opposed to
the role of the Department. As stated earlier, in my opinion there was no revised
valuation report of O’Buachalla of August 2010 but there was a revised valuation in
Mr. Devlin’s précis of evidence dated the 18th October 2010 and later amended on the
24th March 2011. The Council do not appear to have furnished the Department with
any revised valuation of O’Buachallas after August 2010, but I would not expect them
to have done so, at least in the context of an application for loan approval. It might
have become necessary to furnish the Department with any revised valuation in the
context of any on-going application for Capital funding under the Social Housing
Investment Programme for a proposed housing project on the lands being acquired,
but as stated at paragraph 3.08 of my first report this application went into abeyance
some time in 2008. As regards the Council’s application to the Department for
sanction to borrow €3m in July 2011, the Council did not rely upon any valuation
report but simply stated in an email dated the 5th August 2011 that a settlement figure
for compensation of €3m had been agreed between the parties in March 2011 and that
the money had to be paid by the 31st August 2011. In my opinion the settlement
63
figure of €3m had now superceded any pre-existing valuation reports, and it was not
necessary for the Council to rely upon any such reports when seeking loan approval.
4.27
The fifth concern was stated as follows:
“(5)
Have WCC ever made available to the Department the
information in their possession with regard to the serious flood
plain difficulties on this site and if they did so, who in the
Department gave sanction for the funding of the land in question
with such knowledge?”
4.28
The first part of this concern is referable to the role of the Council, but it was
necessary to deal with this previously at paragraph 4.05 of my first report. As
described earlier in Chapter 3 of my first report, the Council made available to the
Department certain information with regard to flooding issues, in the context of the
application for capital funding under SHIP. The Council submitted a detailed project
brief by letter dated the 10th June 2008, and this document stated that part of the site
was within the catchment area for the Three Trout Stream, and that land nearby was
flooded during Hurricane Charlie. It referred to a report having been commissioned,
and that the main recommendation affecting the subject site by J B Barry Consulting
Engineers was that floor levels should be raised to development nearby. After receipt
of the project brief Mr. Altman of the Department reverted to the Council by email
dated the 27th June 2008 with a number of remaining queries, and included a reference
to flooding difficulties. It appears that a draft reply was prepared by Wicklow County
Council on or about the 7th July 2008 but that this reply was never sent to the
Department, in circumstances where the proposed scheme was effectively
“mothballed” around this time, as set out at paragraph 3.08 of my first report. It
should be noted that the language of this stated concern refers to information in the
Council’s possession “with regard to the serious flood plain difficulties on this site”.
In my opinion this language is something of a mis-description and an overstatement
of the nature of any information in the Council’s possession with regard to the risk of
flooding issue. At its height the Council had information in its possession which
suggested that approximately one third of the total area, being the area to the north at
the lower levels which are immediately adjacent to the stream, could constitute a
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flood plain in the sense that it was then liable to flooding, having regard to ground
levels in that area and the maximum predicted flood levels. However, the information
in the Council’s possession did not suggest serious flood plain difficulties on this site,
but on the contrary suggested that a possible risk of flooding could be counteracted by
detailed flood prevention measures which could be introduced at the design stage by
the Council.
4.29
The sixth concern stated by the Councillors was as follows:
“Contrary to suggestions in the media, there was no arbitration decision
on the value of this particular site as it was agreed at a private meeting
to pay the €3 million compensation plus costs to both the Nolan and
Irwin estates. This had been formulated or agreed at the three hours of
negotiations held on the 24/3/11 between parties including a statutory
body WCC involved in these private negotiations involving public
funding contrary to regulations. Extraordinarily there are no written
memos, records or any documentation of this meeting. Why was this?”
4.30
It is clear from the Council’s files that the parties entered into a settlement agreement
on the 24th March 2011 and there was therefore no requirement for the Arbitrator to
give a reasoned award. I have had no sight of any suggestions to the contrary in the
media, and the Councillors did not furnish me with any such media reports during the
course of my review. The Councillors claim that the negotiations between the parties,
which on the face of it were a normal part of these type of proceedings, were in some
way “contrary to regulations” but the Councillors failed to identify any such
regulations which were allegedly breached during the course of my review, and I
would have been very surprised if they had been able to do so. The Councillors also
state that “Extraordinarily there are no written memos, records or any documentation
of this meeting” – i.e. of the settlement meeting between the parties during the course
of the lunch break and thereafter on the 24th March 2011.
This claim by the
Councillors appears to be entirely incorrect and I have sight of the following relevant
documentation on the Council’s files:
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(a)
The text of the handwritten settlement agreement signed by the parties (or their
representatives) which was arrived at during the course of the settlement
meeting.
(b)
The transcript of the Arbitration hearing which records the fact that the parties
had reached an agreement that had been reduced to writing and signed by the
parties.
(c)
There is an attendance note dated the 24th March 2011 prepared by the Law
Agent, which describes the events of the day in question including the fact that
during the lunch break discussions broke out in respect of settlement and
throughout the afternoon the terms of settlement were discussed and ultimately
agreed and signed.
(d)
There is a memorandum dated the 25th March 2011 from the Law Agent to
Ms. Halligan which again describes the events of the day but in somewhat
greater detail.
4.31
The seventh concern was stated as follows:
“A signed handwritten agreement of this private meeting which
committed WCC to purchase this land is undated. Why was such an
important document of contract not dated?”
4.32
In my opinion, the fact that a handwritten settlement agreement was undated was
undoubtedly due to an oversight on the part of the legal representatives who drafted
and / or approved the text of the settlement agreement. Such an oversight can easily
occur in the pressurised atmosphere of trying to wrap up and reduce to writing a
settlement deal acceptable to all parties. In the present case the omission of the date
was of no significance as there was plenty of secondary evidence available to verify
the date if necessary.
4.33
The eighth stated concern was as follows:
66
“On the 24/3/11 the arbitrator Mr. Eoin O’Buachalla sought a copy
from the legal representatives of the Council following this private
agreed contract but none was available to be given to the arbitrator.”
4.34
The transcript of the arbitration hearing on the 24th March 2011 records at page 57
that the Arbitrator was informed after the luncheon adjournment that the parties had
reached an agreement which had been reduced to writing and signed by the parties. It
then records the Arbitrator as seeking to “take back the draft from Mr. O’Donnell”,
the Junior Counsel representing the Irwin estate. This language suggests to me that
the Arbitrator had been given sight of the text of the settlement agreement by the
parties and wanted to take it back for a further look at some aspect of same. It is
unclear from the transcript whether the text was handed back up to the Arbitrator, and
the transcript might not necessarily record same. In any event, this issue is of no
significance, as in many cases a copy of any settlement agreement is not made
available to an Arbitrator, or indeed to a Judge in Court proceedings, and he simply is
asked to make whatever Order that is required arising out of the settlement agreement
and he is simply told the details of the Order requested.
4.35
The ninth concern stated by the Councillors was as follows:
“(9)
In May 2011 the Law Agent of WCC wrote to the legal
representatives of the Irwin estate requesting that they would
come to an arrangement with the legal representatives of the
Nolan estate that would allow the Council to issue just one
payment of €3 million of compensation to the Irwin estate
contrary to the original agreement of two separate payments of
€2 million to the Irwin estate and €1 million to the Nolan estate.
As the law agent expressed his concerns that the head of finance
in WCC might raise awkward questions that could cause delays
to the process.
What awkward questions would a Council’s Law agent be
concerned about with regards to questions being raised by the
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Council’s Finance officer and why would this be discussed with a
private Solicitor representing a party seeking compensation
against the local authority?”
4.36
This concern relates to correspondence between the Council’s Law Agent and Felton
McKnight, Solicitors for the Irwin estate in May 2011. The background was the
conflicting claims to ownership of the CPO lands originally made on behalf of Mr.
Irwin and Mr. Nolan, and the compromise of that dispute between them by the time
the matter came before the Property Arbitrator in March 2011. Back on the 9th
December 2010 the Law Agent was writing to Esmonde Keane S.C., and in that letter
he referred to a recent discussion with his opposite number Mr. McKnight wherein
Mr. McKnight had indicated that a deal had been done whereby Mr. Irwin’s estate
would take two thirds of any compensation payable and Mr. Nolan’s estate would
take the remaining one third. The Law Agent had said that in practice what he
suspected would happen was that the matter would be run by Messrs. Felton
McKnight on behalf of the Irwin estate and afterwards the compensation, when either
agreed or determined by the Arbitrator, would be divided up between them. One
might note that the Law Agent was proved correct in his suspicion. As I have noted
earlier, at the commencement of the Arbitration hearing the Arbitrator was informed
that there was no longer any claim to the subject property by the Nolan family, and
that the title issue had been resolved by agreement between the Nolan estate and the
Irwin estate. The settlement agreement dated the 24th March 2011 then provided that
the Irwin claimants agreed to convey the registered title to the lands to the acquiring
authority, and the acquiring authority agreed to pay the sum of €3m in consideration
of the said conveyance, with the sale to close on the 31st August 2011.
4.37
This then was the background to the May 2011 correspondence between the Law
Agent and Felton McKnight Solicitors. By letter dated 4th May 2011 the Law Agent
raised the issue of the underlying third party interest and he queried whether the
Solicitors for the third party would attend a closing and whether they should have
more than one Paying Order on closing, or whether in the alternative would those
Solicitors accept Felton McKnight’s undertaking to issue what the Law Agent
understood to be a portion of the proceeds of sale to them once completion took place.
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Mr. Felton replied by letter dated the 20th May 2011 and confirmed that on
completion Felton McKnight would require two separate bank drafts, i.e. one draft
made payable to Felton McKnight Solicitors and one draft made payable to
Rutherford Solicitors. By further letter dated the 24th May 2011 the Law Agent stated
that the Council normally would proceed by way of a Paying Order, and if he were to
seek his clients getting two Paying Orders that was likely to cause difficulties in terms
of the accounting system within the Council. He asked in the circumstances would it
be possible for Mr. Felton to arrange with Messrs. Rutherfords that the Law Agent
would hand over the proceeds directly to Felton McKnight and they in turn would
cash the Council’s Paying Order and make the appropriate “sub payment” to
Rutherfords in due course. He then continued as follows:
“I do not wish to be difficult but I can foresee that my client’s head of finance
may well raise queries at the last minute and if the matter could be dealt with
on a streamlined basis as possible this hopefully will alleviate all of these
likely queries.”
4.38
Turning now to the precise concern as stated by the Councillors, it should be noted
first that the description of the Law Agent’s letter is somewhat loose and inaccurate.
The Law Agent’s request was not contrary to the original agreement of two separate
payments of €2m to the Irwin estate and €1m to the Nolan estate. The terms of the
settlement agreement dated the 24th March 2011 provided for one single payment of
€3m by the Council to the Irwin claimants for the conveyance of the registered title,
and the Council was not privy to any separate agreement between the Irwin estate and
the Nolan estate for the division of those sale proceeds.
Secondly, when the
Councillors suggest that the Law Agent expressed his “concerns” that the head of
finance in the Council might “raise awkward questions that could cause delays to the
process”, it can be seen from the actual quotation as set out above that this is
something of an overstatement and an embellishment of what the Law Agent actually
said. The Law Agent did foresee that the Council’s head of finance might raise
“queries” if there were to be two Paying Orders rather than one, and the Law Agent
has clarified that the type of queries which he foresaw as possibly arising would have
related to practical issues including:
69
(1)
The settlement referred to as a single payment of €3m and not “split
payments”. The Head of Finance would therefore have required an explanation
and supporting documentation for releasing split payments;
(2)
Tax Clearance Certificates would also have been required from the Nolan
estate before any payment could be made to them;
(3)
The Nolan estate would have to be set up as a supplier on the Council’s
accounting system before a payment could be processed.
4.39
All of these potential issues could have caused delay at closing if they had not been
properly dealt with, and in my opinion it was entirely in order for the Law Agent to
raise with his opposite number the issue of potential queries arising at the last minute,
in the event that he was asked to furnish two Paying Orders rather than one at the time
of closing.
4.40
The tenth concern was stated as follows:
“(10) The decision taken within WCC not to inform the site valuer Mr.
Donal O’Buachalla of the serious legal conflict between the
Nolan and Irwin estates with regard to the ownership of the site
along with the withholding from the valuer of the flood risks
involved on this land had a profound impact on the ability of the
valuer to give an informed estimate of site valuation. On who’s
instructions was this critical information withheld and for who’s
benefit.”
4.41
The factual matters arising under this concern have already been dealt with above. It
is clear from my review of the files that no decision was taken within Wicklow
County Council to withhold any relevant information from the Council's valuer, Mr.
Jack Devlin of O’Buachallas. There is no evidence of any lack of information having
any impact on the ability of the valuer, to give an informed estimate of site valuation.
The last sentence of this concern appears to imply some wrongdoing by some
70
unnamed member of the Council’s staff, and in my opinion this entire concern is
inaccurate and misconceived and unfair to the staff of the Council.
4.41
The eleventh stated concern was as follows:
“(11) In the formal response to notice to treat compensation claims, the
Councils Law agent valued the lands in question at €600,000. In
a written report planning officials state that .53 hectares of this
site cannot be built on due to flooding concerns and in another
report from a housing prospective the land is deemed useless.
Has WCC made this information available to the Department in
their consideration of loan approval?”
4.42
This concern was previously dealt with at paragraph 4.06 of my first report. The
alleged factual information referred to has already been dealt with earlier in this
report. Firstly, the Council’s Law Agent is not a valuer and it is inaccurate to state
that he valued the lands in question at €600,000 in the formal response to the Notice
to Treat compensation claims. As previously set out, the Law Agent circulated the
claimants’ Statement of Claim to Mr. Devlin by letter dated the 9th August 2010, and
then by letter dated the 24th August 2010 sought his views on a draft Reply which the
Law Agent had prepared. By letter dated the 27th August 2010 Mr. Devlin suggested
pleading a market value of approximately €693,000, based on a rate of €200,000 per
acre as previously suggested to Mr. Lennox some months beforehand. Mr. Devlin’s
letter went on to state that the Law Agent would appreciate that this suggested rate
was purely for negotiation purposes, and that O’Buachallas believed that the date of
valuation coincided with the height of the market and the comparable evidence would
in all likelihood result in a substantially higher award from the Arbitrator. Secondly,
the reference to .53 hectares of this site appears to have featured not in a written
report from planning officials, but rather in a statement by Mr. Devlin in his précis of
evidence dated the 18th October 2010 wherein he states that he had been advised by
the Council that approximately .53 hectares of the subject area were below the 17.50
metre flood level. This may have been a figure extrapolated from a map or draft
drawing prepared by Mr. Devereux, a Senior Engineer with the Council as referred to
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at paragraph 3.53 above. Thirdly, the Councillors suggest that in another report from
a housing perspective the land is deemed useless.
This appears to be a loose
translation of a statement by Mr. Devlin in his report back to Ms. Halligan dated the
1st April 2010, following his meeting with Mr. Lennox on the 29th March 2010, as
already dealt with earlier. Mr. Devlin stated that for the purposes of negotiations
O’Buachallas had advised Mr. Lennox that in their opinion “the lands were of little
value”, given the deficiency in access and accordingly the maximum figure which
they were prepared to recommend for the Council’s acceptance was €200,000. He
added the important qualification that clearly this position would not be sustainable at
arbitration, but they had endeavoured to reduce the claimants’ expectations by making
an offer at the lowest possible level. As stated at paragraph 4.06 of my first report, it
does not appear from the files that the Council made any of this information available
to the Department in their consideration of loan approval, but this is probably because
neither the Council nor the Department would have regarded any such information as
particularly relevant in the context of an application for sanction to borrow the cost of
acquisition of the land. Any earlier information relating to the potential valuation of
the land had now been overtaken by the agreed compensation figure, and neither the
Council nor the Department had any reason to go behind the agreed figure as
conveyed by the Council.
4.43
The twelfth stated concern was as follows:
“(12) Despite making a compensation claim against WCC for the sum
€6.349 million for the lands in question and over a number of
years strongly pursuing this claim represented by among others
the present Attorney General on the 30/08/11 the Nolan estate in
writing abandoned and waivered all claims to this land. How
and why was this claim withdrawn?”
4.44
The factual matters underlying this concern have already been dealt with above. The
claim by the Nolan estate to a possessory title was withdrawn after a deal was done
between the Irwin estate and the Nolan estate. The Council was not privy to this
agreement between the competing claimants, but it appears from the Law Agent’s
72
letter to Esmonde Keane S.C. dated the 9th December 2010 that a deal was done in or
about early December 2010 whereby Mr. Irwin’s estate would take two thirds of any
compensation payable and Mr. Nolan’s estate would take the remaining one third.
The resolution of this issue and the withdrawal of the claim by the Nolan estate was
announced to the Arbitrator at the commencement of the hearing on the 24th March
2011. As regards why this claim was withdrawn, one can easily surmise that the
Nolan family were not confident that their claim would ultimately succeed in the High
Court, and they must have felt it prudent to accept a deal whereby they would be paid
off by the Irwin estate in return for withdrawing their claim.
4.45
The thirteenth concern was stated as follows:
“(13) It now appears that WCC have an existing land bank of 16 acres
in the Greystones area which could be used in part or all for the
provision of social housing without the requirement to purchase
this landlocked and flood plain site. Would it not have been more
reasonable to obtain Departmental sanction of funding to
construct social housing on these existing councils lands as was
suggested by the Department in 2008.”
4.46
This concern has already been largely dealt with in dealing with the second stated
concern above. As regards the suggestion that the site was landlocked, the Council
gave evidence at the oral hearing in March 2005 regarding the proposed access via
Burnaby Lawns and a new bridge over the Three Trout Stream, and this evidence was
accepted by the Inspector and by An Bord Pleanála.
4.47
The fourteenth stated concern was as follows:
“(14) John Nolan claimed on record at the An Bord Pleanála hearing
into the CPO, that WCC were using their CPO powers to obtain
this land for the benefit of “Zapi Developments” whose lands
border the site in question and that this would be brought about
by a subsequent land swap.”
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4.48
This matter arose during the evidence of Mr. Al Nolan, nephew of John Nolan at the
resumed oral hearing held by An Bord Pleanála on the 21st March 2006. At page 8 of
the transcript Mr. Nolan stated that certain land beside Mr. John Nolan’s land, a little
over three acres, went up for sale the previous year and was bought by one of the
developers involved in the Zapi Development for over €3m. He referred to the fact
that there were problems with vehicular access to this land, so he found it very
difficult to see how this land could be of any value to the developers. He suggested
that the only other access to this land would be via the County Council estate and the
Church property, so it appeared to him to be more suited to the Council’s needs than
the developer’s needs. He then asked the question “did Wicklow County Council
consider purchasing this land or is there a possibility that the Council are planning to
do a land swap with the developer and give them the CPO’d land in return for the
field they had bought”. He stated that the Zapi plan showed a road running right up to
the boundary of the CPO field as if they always intended to build there, yet the
Council had stated at the last oral hearing that they intended to build a bridge over the
river to access the field.
4.49
It appears from the transcript that Mr. Nolan was more asking a question about a
possible land swap with Zapi than making a claim as to such. The question appears to
have amounted to pure speculation, in the absence of any supporting evidence. My
review of the relevant files shows no evidence of any discussion between the Council
and Zapi in relation to this site. When I consulted with the Councillors as to whether
they had any evidence they said that they were simply drawing to the Minister’s
attention the question raised by Mr. Nolan.
4.50
The fifteenth stated concern was as follows:
“(15) Following the initial Council meeting in July where serious
concerns were expressed by a number of Councillors about the
price being paid for this land, an urgent meeting was arranged to
seek loan approval for the land purchased with the Minister for
Housing, Mr. Willie Penrose T.D.
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Without consultation or
explanation delegates from both the Labour Group (the second
largest group on WCC) were not notified of this meeting and were
excluded along with a Sinn Fein delegate.
Why were the
representatives of both those parties not allowed to meet Minister
Penrose? Was this decision at the behest of the Department or
WCC?”
4.51
I dealt with this concern at paragraph 4.08 of my first report. When I consulted with
the Councillors during the course of the present review they did not really dispute
what I stated therein regarding the nature of the meeting which was arranged for the
11th July 2011, and the stipulation from the Minister’s Private Secretary that the
delegation from the Council was to be limited to four people. The Councillors
maintain, however, that even if this was the case and even if the Director of Housing
was expected to be one of the four, then it was inappropriate and contrary to
established practice for Mr. Nicholson to have agreed the remainder of the delegation
with the Cathaoirleach and that, according to long established practice, the remainder
of the delegation should have been picked by the elected members group. When I put
this to the Council the essential response was that the Cathaoirleach is the political
leader of the Council, and it was neither inappropriate nor contrary to established
practice for Mr. Nicholson to have agreed the remainder of the delegation with him.
It appeared to the Council that the representation agreed between the Cathaoirleach
and the Director of Services, of themselves plus the Leas Cathaoirleach of the Council
and the Chair of the Housing SPC, ensured that the Council turned out as strong as
possible a team for the meeting with the Minister, and also a team which was broadly
representative of the political diversity of the Council. There is therefore a dispute as
to what the established practice was, and I have been unable to resolve this by my
review of the files or by consulting with the relevant officers of the Council and with
the public representatives.
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Chapter 5
5.01
Conclusions and Recommendations
In conclusion, I have set out in Chapter 3 the process followed by the Council in
regard to compulsory land acquisition at Charlesland, Co. Wicklow. In my opinion,
for the reasons set out in Chapter 3, there was no deviation by the Council from the
relevant legal requirements and administrative requirements or practices.
5.02
As discussed in Chapter 3, it seems to me that the site selection procedure was
somewhat bare and inadequate, even if it did not lead to a poor outcome in this
particular case.
Circular N7/2007 issued by the Department set out revised
arrangements relating to the appraisal, approval and management of housing projects
under the Department’s Social Housing Investment Programme (“SHIP”).
This
Circular requires a written project brief for any project with a capital value of
€500,000 or more to be included in SHIP. The project brief has to address certain
elements, including the issue of site selection, and it may be that since 2007 there is
more comprehensive treatment of the important issues of site selection. However, it
may be that in many cases the making of a CPO Order and the confirmation of same
would precede any submission of a project brief for funding under SHIP, as in the
present case, and in that sense the treatment of site selection in the project brief could
well be retrospective and after the event.
5.03
In Chapter 4 I have examined the specific concerns of the public representatives
regarding the role of the Council, as set out in the documents annexed to my Terms of
Reference. I have concluded that almost all of the concerns are not well founded or
are misconceived.
5.04
As regards any recommendations, I would suggest that consideration be given to
putting in place a more comprehensive site selection procedure as discussed above.
5.05
I would also draw attention to the multiplicity of applications or procedures relating to
a CPO which include:
(a) Application to An Bord Pleanála for confirmation of a CPO;
76
(b) Application to a Property Arbitrator for determination of a claim for
compensation;
(c) Application by a local authority to the Department for capital funding
under SHIP; and
(d) Application to the Department for sanction to borrow pursuant to Section
106 of the Local Government Act, 2001.
5.06
This multiplicity of different applications and different decision-makers is a recipe for
overlap and duplication, and yet at the same time a potential cause of confusion and
lack of “joined up thinking”. A local authority is liable to minimise any deficiency in
certain lands under the first procedure above, and yet to seek to maximise any such
deficiency under the second procedure. This is liable to cause some confusion for the
Department in dealing with the third and fourth procedures, and may also have caused
some confusion for the public representatives in the present case.
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6.
Table of Appendices
Appendix
Appendix 1
Terms of Reference.
Appendix 2
Letter from Secretary General to Mr. Liam O’Daly, Director General, Office
of the Attorney General dated the 16th November 2011.
Appendix 3
CPO Order.
Appendix 4
Draft drawing dated October 2010 entitled “Lay Out Proposed New
Roadway”.
78