THE SUPREME Court has reserved judgment on a challenge to the constitutionality of laws providing for a system of buying out properties which are subject to ground rents.
Ground rent is charged on the land on which a building sits, including adjoining yard and garden areas, and is separate from any occupational rent or purchase price which an occupier incurs.
A ground landlord of a property which contains a former supermarket in Carrickmacross, Monaghan, had brought an unsuccessful High Court challenge to the constitutionality of laws allowing the supermarket operator to acquire the freehold interest in the property.
The foreign-registered landlord company, JES Holdings Ltd, whose directors are John and Lucy Shirley, brought the action against supermarket owner A O’Gorman and Co Ltd, as well as against Ireland and the Attorney General.
An appeal by JES against the High Court decision concluded yesterday before a five-judge Supreme Court, which reserved judgment.
The case arose from a 2006 High Court decision that €30,000 was the appropriate purchase price for O’Gorman and Co to buy out the ground rent under the Landlord and Tenant Acts which provided for the buyout scheme.
Mr Justice Michael Peart, who set that buyout figure, had been asked by JES to strike down the provisions of the landlord and tenant laws providing for the buyout system on grounds they amounted to an unjust attack on JES’s property rights under the Constitution.
Mr Justice Peart ruled there was nothing irrational, arbitrary or disproportionate about the manner in which the ground rent purchase price was arrived at.
In its appeal before the Supreme Court, JES argued Mr Justice Peart erred on 43 grounds, including in finding that the ground rent buyout scheme was a regulation of the plaintiffs’ property rights under the Constitution in accordance with the principles of social justice and, in consequence, did not breach those rights.
JES also argued that, in finding O’Gorman and Co was a prosperous business (as it had relocated the supermarket to another site), the judge was wrong in not finding the buyout scheme was inconsistent with the principles of social justice.
The company also argued the trial judge was wrong in upholding the constitutionality of provisions of the 1978 Landlord and Tenant Act relating to the term of a ground lease and rateable valuation of a property.