The Gazette 1983

SEPTEMBER 1983

GAZETTE

Section 45 Consents and the Treaty of Rome

by J. A. O'FarreU and N. T. Cawley 1

I n December 1982, the Commission of the European Communities took the decision to bring Ireland before the European Court of Justice to seek a declaration that "by maintaining S.45(2)(a) of the 1965 Land Act in force in respect of Nationals of other member States, the Republic of Ireland has failed to ful- fill an obligation incumbent upon it under Treaty," on the grounds that "no provision of National Law may impose on a Community National wishing to exercise the right of establishment conferred by Art.52 the additional requirement of the consent of the State in which that establishment is to take place, even where such requirements, which do not also apply to the Member States' own Nationals, are imposed only for reasons of an administrative nature. A mere administrative practice not to apply the provision in question would not remove the infringement." 2 On the 30th of May 1983, the Minister for Agriculture, in exercise of the power conferred on him by S.45(l)(x) of the Land Act, 1965 approved the Land Act, 1965 (Additional Category of Qualified Person) Regulations, 1983. (S.I.No. 144 of 1983.) Paragraph 2 of this instrument reads as follows:- "For the purposes of the definition of a "qualified person" in S.45 of the Land Act 1965(No.2 of 1965), the following category is hereby declared to be an additional category, namely, a person who is a citizen of a Member State of the European Communities and who- (a) Is exercising in the State theright of establishment as a self-employed person under Art. 52 of the EEC treaty (within the meaning of the European Communities Act, 1972 (No.27 of 1972), by way of an economic activity the nature of which is specified in the relevant certificate given by that person under subsection (3) of the said S.45 and (b) Is acquiring an interest in land to which the said S.45 applies for the purpose of or in connection with such exercise of that right." What is the right of establishment to which the Instrument refers? What is the significance of the Land Act 1965 and in what way does it affect out Treaty obligations? Does S.I. 144 adequately discharge those obligations? What is the background to the introduction of this Instrument? Prior to the 1st of June 1983, the need to obtain the consent of the Land Commission when an EEC national 3 was contemplating the purchase of land in the State was an accepted and largely unquestioned

requirement of Irish conveyancing law and practice. The consequences of failure to obtain this consent were serious. Consider the following hypothetical example: Helmut, a citizen of the Federal Republic of Germany, came to Ireland in 1980 and succeeded in buying 10 acres of agricultural land in fee simple from Eamonn, an Irish National. In January 1983 Helmut decided to sell the land to Benjy, also an Irish National. Both parties used the Standard Form Contract approved by the Incorporated Law Society of Ireland. Following General Condition 8 thereof. Helmut's solicitor sent copies of the title documents to Benjy's solicitor. At this stage. Benjy's solicitor queried the absence of a certificate on the Conveyance from Eamonn to Helmut stating that the consent of the Land Commission had been obtained to the vesting of the land in Helmut, as required by S.45 of the Land Act. However, Helmut's solicitor, a staunch believer in European integration, made no apology for failing to obtain the consent and refused to seek a "retrospective consent" from the Land Commission when requested to do so. What were the consequences for his client? S.45 (2)(a) of the Land Act 1965 provides that no interest in land shall vest in a person who is not a "qualified person" unless he obtains the written consent of the Land Commission. In summary, a "qualified person" is a person who is either- i. An Irish Citizen, or ii. A natural Person resident in the State for more than seven years prior to the transaction, or iii. A person who receives the Certificate of the Min- ister for Industry and Commerce stating that it has been shown to the Minister's satisfaction that the land is being acquired for the purpose of an in- dustry other than agriculture, or iv. A local authority, or v. A body corporate which does not have the words "Limited" or "Teoranta" appended to its name, or vi. A body corporate established by Statute, or vii. A body corporate established under the direction or authorisation of a statute, or viii. A Bank named in the third schedule to the Central Bank Act, 1942, or ix. A person who satisfies the Land Commission that he is acquiring less than five acres of land for private residential purposes, or x. Any category declared by the Minister via regulat- ions to be an additional category. 4 191