The Gazette 1981

GAZETTE

JANUARY/FEBRUARY 1981

fied in the Section which included (in Subsection 2). "(b) Where the land was held by the person acquiring the fee simple under a lease which has expired or is held by him under a lease which will expire less than fifteen years after the date of the service of the Notice under Section 4 of the Act of 1967 or of the application of Part III of this Act, the rent which, in the opinion of the arbitrator, would be reserved by reversionary lease under the Act of 1958 of the land granted for a term commencing on the expiration of the first-mentioned lease." Section 18 of the Landlord and Tenant (Reversionary Leases) Act 1958 ("the Act of 1958) provides for the determination of the rent of a reversionary lease on the basis that such lease should be for a term expiring ninety-nine years after the expiration of the lease to which it is reversionary (Subsection (2)). Section 18 (4) of the Act of 1958 provides as follows: "(4) Subject to Subsection (3) of this Section the rent to be reserved by the reversionary lease shall be one-eighth of the gross rent as defined by Subsection (5) of this Section." Section 18 (5) (a) of the Act of 1958 provides as follows: "(5) (a) The gross rent shall be the rent which, in the opinion of the Court, a willing lessee not already in occupation would give and a willing lessor would take for the land comprised in the reversionary lease in such circumstances that the supply of similar lands is sufficient to meet the demand: (i) On the basis that vacant possession is given and that the lessee pays rates and taxes in respect of the land (other than the lessor's proportion of income tax) and is liable to insure against fire and to keep the premises in repair: (ii) Having regard to the other terms of the rever-

sionary lease and to the letting values of land of a similar character to and situate in the vicinity of the land comprised in the reversionary lease but without having regard to any goodwill which may exist in respect of the land comprised in the rever- sionary lease."

Recent Irish Cases

By reason of the fact that the Applicants' lease was due to expire in 1982 (i.e. less than fifteen years) the provisions first quoted of the Act of 1958 applied and had to be had regard to in the determination of the purchase price of the fee simple under Section 17 (2) (b) of the Act of 1978 (also quoted above). From the determination of the County Registrar of a purchase price of £10,000, the Respondents appealed to the Circuit Court and the President of the Circuit Court (Neylon J.) stated a case to the Supreme Court in which he sub- mitted two questions for determ- ination: (1) Whether — in view of the evid- ence that the Respondents would not willingly make a lease for ninety-nine years for the premises without inserting a clause for periodic reviews of rent during the continuance of the term - I, for the purpose of assisting me to decide upon the appropriate purchase price of the fee simple of the said prem- ises pursuant to Section 17 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 can now determine the rent which would be reserved by a reversionary lease of the said premises granted pursuant to the Landlord and Tenant (Reversionary Leases) Act 1958 for a term commencing on the expiration of the lease in 1982. (2) Whether, when determining the rent which would be reserved by a reversionary lease of the said premises granted pursuant to the Landlord and Tenant (Reversionary Leases) Act

LANDLORD AND TENANT Landlord and Tenant (Ground Rents) (No. 2) Act 1978, Section 17 — Acquisition of Fee Simple of premises. Determination of purchase price where lease will expire in less than fifteen years, "having regard to" (inter alia) a hypothetical rent which would, in the opinion of an arbi- trator, be reserved by a reversionary lease of such premises for ninety-nine years from the expiry date. Impossi- bility of ascertainment of such a rent that a "willing lessor" would accept, having regard to inflation and other unknown factors and in absence of any provision for periodic rent reviews. The Applicant held a chemist shop at Rathmines Road, Dublin, from the Respondents for a term of 147 years expiring in 1982 at the yearly rent of £16. He sought to acquire the fee simple and on arbitration pursuant to Section 17 of the Landlord and Tenant (Ground Rents) Act 1967 ("the Act of 1967"), the County Registrar determined the purchase price to be £10,000. The factors to be taken into account when the price was to be determined by arbitration were provided for in Section 18 of the Act of 1967, but that Section was repealed by the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 ("the Act of 1978") and was replaced by Section 17 of the Act of 1978. Section 17 of the Act of 1978 provided that where the purchase price was to be determined by arbitration it should be the sum which, in the opinion of the arbi- trator, a willing purchaser would give and a willing vendor would accept for the fee simple having regard to (italics added] certain factors speci-

1958, I am legally entitled to endeavour in so far as possible to provide for inflation in view of the evidence that freely negotiated ninety-nine year

I