The Gazette 1983

JULY/AUGUST

1983

GAZETTE

precluding the Arbitrator from awarding compensation. The Court held: It was clearly demonstrated that if the Undertaking to grant Permission were to be equated to a grant of permission, it would not be possible to give the expression a sensible construction consistent with the other provisions and regulations ofthe Planning Acts. The function of the Court when presented with the statutory requirements of the Oireachtas is to accept them, inept though they may be, and so far as possible to give them effect in a sensible manner in accordance with the manifest intention of the statute as shown by its provisions. It is not intended that the Undertaking to grant Permission, is to be equated to a grant of Permission, nor is it necessary that they should be equated. Section 57 can be construed despite the demon- strated weakness of expression, and can only be construed as meaning that Section 57 precludes an award ofcompensation to a Claimant, such as the Claimant in this case, who has land capable of being developed in a manner indicated in sub- section 4 of Section 57 if the Planning Authority expressly states that it under- takes that it will grant permission for some such development. Accordingly, the questions submitted by the Arbitrator were answered to the effect that the Respondents had power to and did give a valid Undertaking, that the Undertaking was in force for the purposes of Section 57 and was given in time to preclude the Arbitrator from awarding compensation as aforesaid. Ignatius Byrne v. Dublin Co. Council. (High Court (per Gannon J.) — 29 July 1982 unreported. William Dundon CONTRACT — INSURANCE Fire — building destroyed — no reinstatement clause In policy. Whether insured entitled to indemnity against loss or cost of reinstatement — negotiations presumed to be conducted on basis of brokers knowledge of policy conditions. The Plaintiff Company entered into associated Contracts of Insurance in respect of property situate at Maxwell Street, Glasgow, purchased in May 1977, with other adjoining property, for approximately £25,000.00. Of this price £15,000 approximately was apportioned to the property with which this case was concerned. Having purchased the property the Plaintiff employed afirm of Brokers to arrange to have it insured against fire risks. The Brokers sought cover from the second named Defendants ('Provincial') for £30,000.00. By letter dated 24 May 1977 to the Brokers

Provincial confirmed cover for £30,000 and went on to state "thefloor area of the building is about 4,000 square feet so that the total floor area is some 20,000 square feet. The present sum insured of £30,000 therefore affords a rebuilding cover of £1.50 per square foot. A realistic figure should befixed; but please note that whilst the building remains unoccupied our maximum acceptance would be £50,000 so that we should expect you to find co- insurers for the balance above this amount". The Brokers then approached the first named Defendant ('Sun Alliance') and by letter dated 23 June 1977 they wrote to Atlantic as follows: "Dear Sirs, Fire Proposal ... St. Albans Investment Company Limited, 69 Highfield Road, Rathgar. With reference to your recent conversation with ourMr. Murphy regarding the premises No. 85 Maxwell Street, Glasgow, we confirm holding cover for a sum of £250,000 for Fire Perils only. We understand the premises will shortly be occupied and we will then arrange to have the risk surveyed. As soon as our Surveyors Report is available we will contact you again." During June and July the proprietor of the PlaintiffCompany consultedArchitects and Quantity Surveyors for the preparation of plans for converting part of the premises into a public house and the preparation of the necessary documents for an application for a liquor licence. Before any Policy was issued and before any further step had been taken the property was destroyed by fire dn 15 August. A short time later Policies were issued by both Defendants in the standard Policy form which provided for payment to the insured of the value of the property at the time of the happening of its destruction' with an option to the Company to reinstate the property. Evidence was given that where the reinstatement of property is required by an insured, the Policy will contain what is described as a "reinstatement clause". No such clause was contained in these Policies. As a result ofthefire the building had to be taken down at a cost estimated by the Court at £9,000. The value of the site after demolition was estimated at £20,000.00. The Plaintiff claimed entitlement to the sum of £300,000.00, the cost of rebuilding being considerably more than this. Both Defendants denied that they insured the premises on the basis of rebuilding or reinstating them and evidence was given that such cover was not sought and that the Policies issued after the fire were in accordance with the original agreement between the parties. They explained the reference to rebuild- ing in the letter of 24 May 1977 as an indication to the Brokers that in the case of partial damage a clause as to "general

average" would apply and that in the case of partial destruction the Insured would only recover such proportion ofthe cost of repair as the total sum insured would bear to the cost of rebuilding the entire premises if totally destroyed. They claimed, therefore, that the Plaintiff was entitled to compensation only on the basis of the market value of the premises at the time of the fire less the site value after deduction of the cost of demolition. They relied very strongly on the fact that the Plaintiff placed its insurance through a Broker who should have been fully aware that an agreement to indemnify the cost of rebuilding would require a reinstatement clause in the Policy and should have been fully aware of the application of general average provisions. The Court held that on the facts, the Policies did not cover the cost ofreinstate- ment. The Plaintiff originally proposed to insure on the basis of being compensated for loss in accordance with the value ofthe property and it is a reasonable proposition that negotiations must be presumed to have been conducted on the basis of the Brokers' knowledge of the position about reinstatement Clauses. The Plaintiff was awarded £54,000.00 calculated on the value of the property at £65,000.00 from which must be deducted the value of the site, less the cost of the demolition. St. Albans Investment Company v. Sun Alliance & London Insurance Limited and Provincial Insurance Company Limited. The High Court (per McWUliam J.) 30 April 1982 — unreported. Franklin J. O'Sullivan Constitutionality of Sections 29 and 30, Turf Development Act, 1946 — Articles 40 and 43 — Compulsory Acquisition — Natural and Con- stitutional Justice. In November, 1978 Bord Na Mona (BNM) published advertisements in the newspapers indicating their intention to acquire certain lands, including 132 acres the property of the Plaintiff, pursuant to their powers under Section 29 and 30 of the TurfDevelopment Act, 1946. Section 29 empowers BNM to acquire land per- manently or temporarily by agreement or compulsorily and to acquire various rights in or over land. Section 30 empowers BNM prior to agreement on compensation to enter and take possession of any land or exercise any right in land. The Plaintiff objected in writing through his Solicitor on 1 December, 1979. The Plaintiffwith other affected landowners then wrote to BNM setting out general objections to the proposed acquisitions applicable to all the owners of the lands in question. At a CONSTITUTIONAL/ ADMINISTRATIVE LAW

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