The Gazette 1986

SEPTEMBER 1986

GAZETTE

and Nicholas Hardy & Co. Ltd. High Court (per Costello JJ 20 April 1985 - unreported. John F. Buckley REVENUE Temporary 2% levy on live Bovine Animals - Operation unfair and oppressive - Section 79 Finance Act 1980 not applicable - Not necessary to consider EEC Law. In 1979, the Government introduced a tem- porary levy of 2°7o in respect of Bovine Animals which were slaughtered in, or exported from, the State. The duty was payable by the proprietor of the premises in the case of animals slaughtered on the premises, and by the exporter in the case of animals exported from the State. The Revenue Commissioners were empow- ered to regulate the system of collecting the duty. The Plaintiffs challenged the validity of the duty on the grounds that it amounted to an imposition of a Customs Duty contrary to the provisions of the Treaty of Rome. The issue was referred to the European Court of Justice which ruled that in principle the tax was not incompatible with the Treaty but that it would be if it impeded the proper functioning of the relevant Common Organ- isations but that these were facts to be deter- mined by a National Court. In the High Court Barrington J. held the levy invalid. On Appeal to the Supreme Court there were three main arguments for the Plaintiff. 1. Whether the Statutory Instruments which introduced the levy were ultra vires of the Finance Act, 1966? 2. Even if the Statutory Instruments were not ultra vires were they invalid because they operated arbitrarily and unreasonably? 3. Was the levy equivalent to a Customs Duty on Exports and therefore void from being contrary to a Community Law? Henchy J. held that it was only necessary to consider Argument No. 2. The Tax was unreasonable if not impos- sible for the Exporter or the Proprietor of the Slaughter House to recover the tax from the Farmer on whom the Levy was intended as a tax. He held that the Application of the test of reasonableness applied in his Judgment in Cassidy -v- Minister for Industry and Com- merce [1978] IR 297 was applicable. He also stated it was generally undesirable to decide a case by invoking provisions of Community Law when a case can be decided by reference to domestic Law. Section 79 of the Finance Act 1980 which purported to remedy the defect could only act prospectively and not retrospectively and thus could not cure the defect of the levy. HELD: Appeal Dismissed. Doyle & Ors -v- An Taoiseach <£ Others. Sup- reme Court (per Henchy J. Nem. Diss.) 29th March, 1985 — unreported. John O'Connor PLANNING Local Government (Planning and Develop- ment) Acts 1963-1982 — Planning Appeal — Rights of Third Parties. The Hibernian Shirt Company & R. E. Flanagan applied to Dublin Corporation for planning permission for a shop/office devel- opment at Great Strand Street and Liffey Street, Dublin. The application was refused by Dublin Corporation but on appeal to An

inch structural concrete slab having been omitted - and that walls rested on inadequate foundation. It noted that all the defects were "hidden" in the sense that they were not discoverable by the sort of examination which a lay person would be expected to carry out, but were discoverable by a reasonably careful inspection carried out by a person with an ordinary professional qualification in house construction, such as those that an architect or engineer would have obtained. Having reviewed the trend of development of the English cases from Bottomley -v- Ban- nister [1932] I KB 458 through Otto -v- Bolton and Norris [1936] 2 KB 46 to Dutton -v- Bog- nor UDC [1972] I QB 373 and Anns -v- Mer- ton London Borough [1978] AC 728 the Court also considered the Irish cases of McGowan -v- Harrison [1941] IR 231, Cham- ber -v- Lord Mayor of Cork [1959] ILTR 45, Siney -v- Dublin Corporation [1980] IR 400 and Colgan -v- Connolly Construction Com- pany (High Court unreported 29th February 1980) the Court held that in Irish as in English Law the former immunity in tort of a builder who owns the land on which the house was built and who subsequently sells (or lets it to a Lessee) no longer exists and that the duty was not affected by the fact that instead of selling it immediately after its construction the Vendor resided in it himself for a number of years. The Court noted that in Colgan's case the Court awarded damages for defects based on the cost of making good defects which threat- ened the health or safety of the occupier but not for defects in the quality of workmanship which did not threaten health or safety. This decision predated Junior Books -v- Veitchi [1982] 1WLR 447 in which the House of Lords held that the duty of care extended to a duty to avoid causing pure economic loss consequential on defects in the work and to avoid defects in the work. The Court found the reasoning of the majority in the House of Lords persuasive. The Court held that the Vendor was in breach of duty in (a) causing defects which resulted in danger to the health and safety of the Plaintiff; (b) causing defects in workman- ship and (c) causing defects which resulted in inconvenience and discomfort to the Plaintiff and his wife. 2. The Claim against the Local Authority The Plaintiff claimed firstly that the valu- ation carried out by the Third-Named Def- endant on behalf of the Council was carried out negligently and that the Council was vicarously liable to the Plaintiff for that negligence. As the Court was about to hold that the Third-Named Defendant was not negligent, that claim failed. The Plaintiff claimed secondly that in carrying out its statutory function the Council owed a com- mon law duty of care to the Plaintiff which they breached. The Plaintiff's case was that in carrying out its statutory duty to inspect the bungalow under the 1972 Housing Regu- lations to ascertain its market value before granting a loan, a duty arose which was breached by authorising an inspection by someone who lacked the necessary qualifications to ascertain reasonably discov- erable defects. Noting that the English cases of Dorset Yacht Company Limited -v- Bognor UDC and Anns -v- London Borough oj Merton had decided that a common law duty

could arise on the exercise of a statutory power the Court referred to the most recent application of the doctrine in the House of Lords in Governors of Peabody Donations Fund -v- Sir Lindsay Parkinson and Others [1984] 3WLR 953. The Court noted that the scheme which the Council adopted for the making of loans under the Housing Authorities (Loan for Acquisitional Construction Houses) Regu- . lations 1972 provided "no advance shall be made by the Council until the Council is satisfied as a result of a report by the Council's Valuer as to the actual value of an existing house" . . . and, accordingly, an Applicant would be entitled to assume (a) that the Council had obtained a report from their Valuer on the actual value and (b) that as a result of that report the Council was satisfied that the house was readily saleable. The Court held that the Council was operating their lending powers under the Act to assist persons on low incomes to purchase their own homes and in particular those who would have been unable to do so but for the Council's help. The Court also held that on the facts known to the Council it should have been aware that it was unlikely that the Plain- tiff would himself employ a professional person to examine it and should have known that if avaluationwere carelessly done it might not disclose defects in the premises as a result of which the Plaintiff might suffer loss or damage. The Court concluded that as the purpose for which the statutory duties were exercised was to help persons like the Plaintiff it was con- sistent with the Councils public law powers that they should be accompanied by a private law duty of care in his favour and found that a duty of care arose in this case. The Council also had a duty to ensure that the person who carried out the valuation would be competent to discover reasonably ascertainable defects which could materially affect the market value and were in breach of that duty by not engaging a person with an ordinary profes- sional qualification in relation to building construction. 3. The Case against the Third-Named Def- endant The Court having assumed (but without deciding) that the Third-Named Defendant owed a duty of care to the Plaintiff held that the Plaintiff failed to establish that an auctioneer of ordinary skill and competence would have discovered the "hidden" defects of the type which existed in this bungalow. The t Third- Named Defendant was not to be blamed for the absence of qualifications which he did not hold himself as having. Contributions under Section 29 of the Civil Liability Act The Court considered in the light of the judgments in O'Sullivan -v- O'Dwyer [1971] IR 275 and Carroll -v- Clare County Council [19751 IR221 that the builder who constructs a grossly substandard house which contains serious hidden defects is much more blame- worthy than a public authority whose fault lies in the choice it made in the professional qualifications necessary to inspect the prem- ises and decided that the Local Authority should recover from the builder 90^o of any damages and costs which it might have to pay to the Plaintiff. Ward -v- McMaster, Louth County Council

ii