The Court of Appeal has overturned the High Court’s decision to dismiss a €5.8 million claim over land in south Dublin owned by a company of businessman Jim Kennedy.
In 2018, Mr Kennedy’s Jackson Way Properties Ltd (JWPL) won a High Court case against Mairead Smith and her late husband, Thomas Kevin Smith, of Priorsland House, Brennanstown, Carrickmines. They had claimed a 1947 legal restriction on building, known as a restrictive covenant, meant they were entitled to a benefit from adjoining land owned by JWPL.
JWPL was awarded €12.8 million as part of a compulsory purchase process over land adjoining Priorsland which was acquired as part of the M50 motorway project. The Smiths claimed that €12.8 million valuation was affected by their claim to the covenant entitlement.
JWPL brought proceedings against the Smiths claiming the covenant was no longer of benefit to them because it was no longer valid or they had no entitlement to enforce it. Dún Laoghaire-Rathdown County Council, as the payer of the award, was a notice party in the case.
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In 2018, the High Court found no persons were entitled to the benefit of the covenant. It also found the covenant was not annexed to any land, either expressly, or by implication.
The court heard that in 1942 stockbroker Thomas Vincent Murphy acquired Priorsland House, a mansion that included stables and 16 acres. He subsequently acquired 127 acres of adjoining land which formed part of the Hinchougue House Estate.
In 1947, Mr Murphy transferred 108 acres of the land to another stockbroker, John Hugh Wilson. This was when the covenant was created.
In 1962, Mr Murphy and Mr Wilson agreed to a modification of the covenant to allow Mr Murphy build a house on part of the lands, the judge said.
In an affidavit, Mr Murphy swore that at the time of the sale of the land to Mr Wilson in 1947, it was verbally agreed between the two men that a covenant that restricts all buildings on the lands be inserted into the deed. The purpose of this was to preserve the amenity and privacy of Priorsland, the High Court judge said.
In 1992, after the property had passed through several hands over previous years, a company called Paisley Park became the owner. That company later went into liquidation and the land was transferred to JWPL in 1994.
After JWPL got its €12.8 million award it had to issue proceedings against Dún Laoghaire-Rathdown County Council seeking enforcement of that award which was when the covenant issue arose.
The Smiths lodged a compensation claim with the council in 2009 saying their interest in the land that had been compulsorily acquired was €5.8 million, due to the covenant.
JWPL then brought proceedings against the Smiths seeking to have the covenant declared invalid. The Smiths opposed the application.
The High Court ruled that it was not possible to establish that the benefit of the covenant contained in the 1947 deed, and modified in 1962, was annexed by implication to any land.
Ms Smith appealed and JWPL opposed the appeal.
In a judgment on Friday on behalf of the three-judge Court of Appeal, Ms Justice Máire Whelan set aside the High Court decision and allowed the appeal.
She said the High Court erred in holding that JWPL was not bound by the covenant contained in the deed of 1947 registered originally as a burden on the lands and amended in 1962.
On a true construction of the entirety of the documents, including the 1962 dealing, the covenant was annexed to, and inhered in, the relevant land, she said. The legal effect of this binds JWPL, as successors in title, to the original covenantor as intended, she said.
