THE SUPREME Court has rejected a constitutional challenge to a section of the law that permits the buying out of ground rents on the basis that the appellants had no standing to take the case.
The challenge came in an appeal from a High Court ruling that the law on ground rents was constitutional.
Isle of Man-registered JES Holdings and its shareholders, John and Lucy Shirley, had claimed that the 1980 Landlord and Tenant Act, under which Carrickmacross supermarket owner Augustine O’Gorman was seeking to buy his ground rent from them, was unconstitutional.
This case in turn included an appeal from a Circuit Court ruling that the ground rent should be sold to Mr O’Gorman for the sum of £20,000.
Mr Justice Níal Fennelly said his decision, based on the standing of the appellants, had no effect on the decision of the High Court on the matter of whether or not the ground rent should be sold to Mr O’Gorman, and its price.
The High Court had upheld the Circuit Court decision, but increased the sum payable to €30,000.
The landlords argued that, as this was only a fraction of the value of the land on the open market, being compelled to sell it under the Act infringed their property rights. The amount for which ground rent is to be sold is set by the legislation according to a formula based on the land’s rateable valuation.
This calculation is based on the presumption that the landlord, or his predecessor in title, did not construct any of the buildings on the land. This presumption can be rebutted by the landlord.
In his judgment yesterday Mr Justice Fennelly, for the five-judge Supreme Court, said that it was settled law that legislation enjoyed the presumption of constitutionality, and if two constructions were possible, the courts must use that which interpreted the law as constitutional.
The section being challenged was reasonably open to an interpretation consistent with the appellant’s constitutionally protected property rights.
The section in question, when interpreted in the light of the presumption of constitutionality, would have enabled the landlord to point to the fact that between 1919 and 1945 their predecessors in title to the land had gathered all rights into their ownership.
They would, therefore, have been able to rebut the presumption that they had not constructed the buildings and this would have allowed them to defeat the attempt to buy the ground rent. However, this had not been the decision by the High Court.
Mr Justice Fennelly said that this conclusion, that they were not disadvantaged by the section in question, meant they had no standing to challenge its constitutionality.