Dáil Éireann debate -
Wednesday, 20 Feb 1980

Vol. 318 No. 1

Landlord and Tenant (Amendment) Bill, 1979 [Seanad]: Committee Stage.

Sections 1 and 2 agreed to.

SECTION 3.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I move amendment No. 1:

In page 5, lines 33 and 34, to delete "the public service" and substitute "any activity within the Public Service".

This Bill confers rights and obligations on landlords and tenants and the State will enjoy the same rights as any other tenant. No distinction is being made between the rights conferred on the State as a tenant and the rights conferred on any other brand of tenant. Section 3 is the interpretation and definition section. The word "business" is defined because various sections of the Bill will be affected very much as to whether a premises is being used for private purposes or for business purposes. "Business" is stated in section 3 to mean "any trade, profession or business whether or not it is carried on for gain or reward" and so on. But it is also stated to include the public service and that is what this amendment is concerned with. Persons with whom I have discussed the Bill believe that the definition of the public service as it is in the Bill is indefinite and might require to be elaborated on if there is not to be doubt and litigation in the future. I have therefore put down an amendment to the definition of "business". Instead of using the words "public service" we should substitute "any activity within the public service". I am advised that this is clear and will make it easier to interpret the Bill. I concede straightaway that I should have left the words "the public service" stand as they are and added to them "and also any activity within the public service". I struck out the words "the public service" and substituted "any activity within the public service".

There is no necessity for long argument about this amendment. I am advised that as it stands it will give rise to doubt in the future and may give rise to litigation. We should do all we can to put the matter beyond doubt.

Minister for Justice (Mr. G. Collins)

I thank Deputy Fitzpatrick for the amendment and appreciate very much the point he is making. The amendment would appear to be designed to remove any doubt as to the meaning of "business" as applied to the public service. I presume this is the purpose of the amendment but I am assured that it would not succeed in so doing. On the contrary, I am advised that it could make the meaning less certain than at present. I understand that the words "the public service" have stood in this code of law as part of the definition of "business" since the enactment of the 1967 Ground Rents Act. If we put in the words "any activity within the public service" it could denote something different from the public service itself. An activity is not necessarily part of the public service simply because it is carried on within the public service. If any change were to be made, it should be to substitute "any activity provided for within the public service" but I am advised that such a change definitely would not be an improvement and is unnecessary.

I fully appreciate that the Deputy is endeavouring to make it more definite but, having given the amendment every consideration, I am advised that the words "the public service" have stood in this code of law as part of the definition of "business" since the enactment of the 1967 Ground Rents Act.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): Has “the public service” been defined in any other Bill and has there been any litigation involving the definition since the 1967 Bill? If it has been litigated since 1967 and has stood up, then that would answer my query. If not, then in terms of a Bill 12 or 13 years is a very short time and any doubt should be remedied now. If the Minister is not satisfied with the phraseology I put forward perhaps he would seek drafting advice.

Mr. G. Collins

I understand it has never been challenged since 1967 and has been defined in the Ministers and Secretaries Act for the purpose of that Act. This is a very technical Bill and I am quite prepared to have another look at the views put forward. If we are satisfied that they would improve the Bill I will do something about it on Report Stage.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I am satisfied.

Amendment, by leave, withdrawn.

Question proposed: "That section 3 stand part of the Bill."

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I am told that the expression “compensation for improvements” has not been defined in this section. The 1977 or 1978 Bill——

Mr. G. Collins

The 1978 Bill. The first one was introduced in 1977.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): It is clear that the expression “compensation for improvements” has not been defined in the section and has been defined in other Bills passed in the seventies. I understand that the phrase appears several times in the Bill and I should like to know whether the Minister has considered or taken advice on the necessity for defining the expression.

Mr. G. Collins

"Compensation for improvements" is defined in section 46 (1) in part IV of the Bill. It is implicit in section 41 (a).

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): If the Minister is satisfied, I will accept his view. This is a technical Bill and even those who have a general knowledge of the law, such as myself, find it technical. I have been informed that the 1977 Bill contained definitions of reversions which are omitted form this Bill. I assume that that was a deliberate omission since the reversions of either a landlord or a superior landlord could only be as defined in the 1977 Bill. I should like to know the position of a superior landlord where a lease and a sub-lease expire on the same date. I should also like to know if this has any relevant consequences. The Minister should take this opportunity to look into the necessity for a definition of reversions.

Mr. G. Collins

I understand that these definitions are not needed. There is no provision that needs a definition of that expression but, if the Deputy wishes, I will look at the matter again.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I am advised that the Minister should look into this matter.

Mr. G. Collins

I will do so.

Question put and agreed to.

NEW SECTION.

Mr. G. Collins

I move amendment No. 2:

In page 7, before section 4, to insert the following section:

"4.—(1) In this section `the relevant date' means the date on which a State authority acquires the interest of the lessor or immediate lessor of any premises.

(2) Subject to the following subsections, this Act shall not bind a State authority in its capacity as lessor or immediate lessor of any premises.

(3) Where a State authority acquires the interest of the lessor or immediate lessor of any premises after the commencement of this Act, section 13 shall apply as if the expressions `at any time' and `at that time' in subsection (1) thereof were references to the relevant date and Part II shall apply accordingly.

(4) Subject to the provisions of this Act, in a case to which subsection (3) applies, the tenant shall be entitled to a new tenancy in the tenement beginning on the termination of the tenancy under which he holds at the relevant date but shall not be entitled to a further renewal of his tenancy.

(5) In a case to which subsection (3) applies, subsection (2) shall not apply so as to disquality any person for payment of compensation for improvements in respect of such improvements as may have been carried out before the relevant date."

Section 4, as it stands, does not represent any change in the law on the basis that the State is not bound by statute unless the particular statute so provides, either expressly or by necessary implication. This view was not questioned until recently, but because a doubt has now been raised section 4 proposes to settle that doubt. However, the proposal in section 4 was very keenly debated in Seanad Éireann and an Opposition amendment to delete section 4 was withdrawn on an undertaking being given by the Minister of State that the matter would be re-examined. The amendment now proposed arises out of that re-examination.

Before we discuss the amendment I should like to make a few remarks concerning the substance of section 4 which may be useful. As mentioned, it has always been the accepted view until recently that the Landlord and Tenant Acts do not bind the State, but since a doubt has been raised the way would accordingly be open to substantial change in the law if that doubt were not now to be resolved in favour of the accepted view. The purpose of the proposal in section 4 of the Bill as it stands is to resolve that doubt. The proposal does not reflect any view on my part that the State should, in principle, have any exemption. It is simply the case that a change in the position of the State under this legislation has not been the subject of investigation and recommendation by the Landlord and Tenant Commission as have the main changes proposed in the Bill. I do not propose to permit such a change in the law to be carried out by default, as it were, without that kind of investigation. In the second place, there is no question of tenants of the State being worse off under the proposals contained in the Bill than they are under the law as it stands. Existing tenants of the State are already dealing with a landlord who is not bound by the landlord and tenant code as that code has always been understood.

The proposal in section 4, as it stands, does not change the position. It is, on the contrary, designed to ensure that the position does not change. Against this background the amendment proposed represents a considerable concession and that amendment is designed to meet one valid objection that has been raised to the exemption of the State. The objection relates to the case where an occupational tenant finds that he has become a tenant of the State, possibly without either his knowledge or his consent, having previously been a tenant of a private landlord. In such a situation the tenant would, apart from the amendment that is proposed, find that whereas he had rights against his landlord under the landlord and tenant code those rights would have disappeared where a State authority had taken over as landlord.

The amendment proposes that the tenant's existing rights should be preserved in that situation, that is, his right to a renewed occupational tenancy where that right has accrued and his right to compensation for any improvements he may have carried out. The right to compensation for improvements means that if the tenant is renewing his tenancy his renewal rent will be fixed with due allowance for the value of these improvements. If, on the other hand, the tenant wishes to leave on the termination of his existing tenancy, he will be entitled to compensation for the residual value of those improvements. The right to a new tenancy applies on one occasion only in the circumstances catered for in the amendment. Following on the grant of that new tenancy the tenant will be in the same position as any other tenant of the State and he will not have the statutory right to further renewal of his tenancy. The statutory rights that are being given are restricted to persons who are occupational tenants and are not being extended to ground rent tenants, those, for example, with which Part III of the Bill is concerned. The rights of ground rent tenants whose landlord is a State authority, or a harbour authority, or the Commissioners of Irish Lights are catered for separately in section 70 of the Bill.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): Are they entitled to a new tenancy?

Mr. G. Collins

Section 4, which I have just dealt with, deals with new tenancies and section 70 does not.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): Section 4, as drafted, states:

This Act shall not bind a State authority in its capacity as lessor or immediate lessor of any premises.

In simple language that means that the State is to be absolved from all the burdens which the Bill imposes on ordinary landlords. On the other hand, under the Bill the State will enjoy all the rights and privileges which are being conferred on tenants. The principal benefit which the Bill confers on tenants is the right to a new tenancy. That is laid down in Part II, which states that in certain circumstances a tenant or lessee whose lease or tenancy expires is entitled to a new lease from his landlord or lessor. If the landlord or lessor fails to give a tenant a new lease, that tenant has a right to go to court. If he satisfies the conditions laid down in Part II of the Bill, he is entitled to a new tenancy.

Indeed, the rights of the tenant are being improved considerably. Up to now the occupier of a business premises which was not held under a lease from year to year was entitled to a new tenancy only if he had been in occupation of that business premises for seven years, but that period is being reduced now to three years so that a tenant of a business premises whose tenancy has been terminated is entitled to a new tenancy if he has been in occupation for three years. This is a very considerable improvement in favour of the tenant, but for the first time in legislation there is the provision in section 4 which excludes the tenant from any of those rights as against his landlord while at the same time, if the State finds itself in the position of tenant or lessee, it will enjoy all the benefits, privileges and rights in favour of a tenant without having to be burdened with any of the obligations of a lessor or landlord if it finds itself in the position of either. This situation is entirely unreasonable.

The Minister has stated that he is not changing the law, that the law has been always that the State was not bound by the Landlord and Tenant Act of 1931, that Act which we are updating and re-enacting here. I do not accept that. It has never been so decided or adjudicated on by the courts. The State is not bound by the Rent Restrictions Acts, but that is a totally different matter. The exclusion is written into the Rent Restrictions Acts. I am speaking from memory, but I think I am right. In addition there is a very different situation in the Rent Restrictions Acts regarding residential dwellings dwellings that were provided specifically by local authorities and by the State as residences for people who needed them. It would be only reasonable that the State should have control of such dwellings in order to ensure that they would continue to be used for the purpose for which they were built.

This Bill was introduced in the Seanad and debated there. Section 4, which excludes the landlord from the obligation imposed on landlords under this Bill, was debated at length in the Seanad but the absurdity of the provision became apparent when it was pointed out that a man could enter into a lease with a private individual for 50 years and that when that lease had another three years to run the landlord's interest could be bought by the State, thereby robbing the tenant of his right to a new tenancy. That proposition was outrageous and the Minister had to see the reason of the argument put forward in the other House. Under that section as introduced in the Seanad a person would not only be robbed of his rights against the landlord where the landlord was the State and where the lease was granted in the first instance by the State, but he was robbed of those rights also where the State bought a landlord's interest with even only a short time to run. That proposition was so outrageous that it could not stand up to investigation. The Minister makes some virtue out of the fact that he is putting that defect right. Under the amendment as introduced by him the position will be that where the State purchases a landlord's interest certain limited rights will still accrue to the tenant provided he brings himself within the section, but he will be entitled only to one renewal.

It is my considered opinion that the Minister is changing the law by reason of section 4, unless he is relying on some old British dictum to the effect that the Crown is above and beyond everybody, that the Crown can do no wrong, that the Crown is all powerful and almighty and that he is substituting the word "State" for the word "Crown". That is the only dictum on which the Minister could hang his argument, but I do not believe that our courts would hold accordingly. If what the Minister says is right, why was it considered necessary to write into the Rent Restrictions Act, as I believe has been written in, that these Acts do not apply to local authorities or to the State? For the first time the Minister is putting in a privileged position a body well able to look after itself, that is, the State. Usually the State is not short of cash if its finances are properly managed and, even if the State finds itself in difficulties, it has ways and means of getting money to run its services. However, what the Minister is doing in this legislation is putting the State in a privileged position. If, for example, a young man leases a premises from a private individual and builds up a business there and after spending 30 years in that business, during which time he builds up a very valuable asset and goodwill, the position would be that he could then acquire a new lease thereby protecting his assets. However, if the Minister has his way, a young man who would rent from a Department of State on a 31-year lease a building that had just been constructed could be thrown out without any compensation at the end of that time.

Is the Minister saying that people who, shortly after the foundation of this State, took leases on valuable property in the GPO in this city had no rights? Is he saying that people, some of them from my native county, who took leases on portion of the GPO, one of the most valuable shopping centres in the city, did so in the knowledge that when their leases expired they could be thrown out without a penny compensation? That is so absurd as not to stand up to any serious investigation.

I do not believe that it was ever the law or that it was ever understood to be the law. The first time it ever appeared in any Bill was in the Landlord and Tenant (Ground Rents) Act, 1978. I believe that where the State as tenant or lessee reaps the benefits it would not otherwise enjoy were it not for this Act—it would not have the benefits of a a new tenancy were it not for this Act; it is doubtful whether it should have them at all, but they are in the Bill and I am not quarrelling with that—and where it shares the benefits conferred on tenants, it should shoulder the obligations imposed on landlords. That is not an unreasonable proposition.

The State is well able to look after itself. In most cases it does not have to have a building in a particular place. If you want to go to the Inspector of Taxes you have to find him out. If you do not find him, he will find you. The State is not in competition with anybody. The State is a monopoly. It does not matter to the State if its offices have to move 100 yards or half a mile one way or the other. Therefore, in my view, it is most unjust to seek to amend the law as the Minister is seeking to do.

It is true that the amendment is an improvement on section 4 as first written into the Bill. Section 4 simply says that the Act did not apply to the State in its capacity as a landlord or a lessor. The amendment gives certain rights to a tenant who is bought over by the State. It gives certain rights to a tenant who has had his remainder interest bought over by the State, but only a limited interest. It is quite wrong that that should be. The reasonable thing for the Minister to do is to delete section 4 and let the State take the burden of this Bill as landlord and the privileges of this Bill as tenant.

Mr. G. Collins

As I pointed out, section 4 simply writes into statute a provision which is intended to confirm what has been the position in law since the foundation of the State. As a result of proceedings taken in 1976 by one of the tenants of the GPO building shops, this view was called into question. The provision in section 4 simply resolves the doubt that arose in that case, although I should stress that this doubt was never given the authority of a court decision.

Up to the middle of 1976 it was generally held in legal circles that the Landlord and Tenant Acts did not bind the State as lessor, a view based on a more general belief that the State would not be bound by a statute unless provision to the contrary was made in the statute either expressly or by necessary implication. On this basis no express provision was made in the 1967 Ground Rents Act, although the matter was fully considered. Because of the proceedings taken in 1976 by the tenant of the State a doubt was raised as to whether the State was not, in fact, bound by the Landlord and Tenant Acts. As a result of this the then Minister for Justice decided, with the approval of the Government, to insert a positive provision in the Landlord and Tenant Bill, 1977—this Bill lapsed with the change of Government—to the effect that the State was not so bound. The provision now appears in section 4 in the Landlord and Tenant (Amendment) Bill, 1979.

Section 4 proposes that a State authority shall not be bound by the Bill in its capacity as lessor, or immediate lessor of any premises. "State authority" is defined in section 3 as a Minister of the Government, the Commissioners of Public Works in Ireland, or the Irish Land Commission, these being the only authorities that hold land or buildings on behalf of the State.

All this discussion begs the question: why the exemption for the State? The basis of the exemption of the State as landlord from the provisions of the Landlord and Tenants Act lies in the recognition that the role of the State as a landlord is not the same as that for a private individual or a corporation. In the latter case the ownership and leasing of land and property represents an entrepreneurial activity motivated by profit. The State is normally involved in the ownership and leasing of lands and property only incidental to its administration of such lands and property, possession of which by the State is necessary in the public interest.

The following examples illustrate this point. The Minister for Transport owns tracts of land in the vicinity of the three State airports, ownership of which is necessary to ensure against development of the land in a manner that would inhibit airport operations. The Minister for Defence holds lands adjacent to certain military installations for reasons similar to those of the Minister for Transport. Most leases of land made by or on behalf of the Minister for Defence include a proviso that possession of the lands may be recovered at any time if military exigencies so demand.

The Commissioners of Public Works hold land at such places as national monuments, the Phoenix Park extension, along the banks of the River Shannon, at State harbours, such as Dún Laoghaire, Howth, Dunmore East. In most cases the actual possession of the land is unnecessary, but it is essential that the commissioners retain control over the development and use of the land.

The Minister for Transport and Tourism has vested in him by the Foreshore Act, 1933, the bulk of the foreshore around our coast. Retention of control over the development and user of the foreshore is obviously necessary for the preservation of public rights of way, rights of navigation and rights of fishing over and from the foreshore. Accordingly, land is held on behalf of the State in a wide variety of circumstances. If the exemption of the State from landlord and tenant legislation generally were to be removed, a possible outcome of failure to include an expressed provision in the Bill would be that the public interest involved in the holding of such land would be at risk. However, because of the variety of the circumstances, it would be extremely difficult to analyse the circumstances.

The Landlord and Tenant Commission have made no recommendation for a change in the position of the State. All in all, the prudent course to adopt is to include a provision in the Bill which will leave the position of the State the same as by common consent up to the present it has been taken to be. That is what is proposed in section 4 of the Bill. Where lands held on behalf of the State have been disposed of by way of ground rent leases or tenancies of dwelling houses, however, a different situation arises. In such cases the reasonable presumption is that the public interest is not involved. Section 70 of the Bill accordingly provides that the State shall, as landlord, be bound to a transfer of the fee simple except in a case where the State authority concerned certifies that such a transfer would not be in the public interest.

I have gone into detail in regard to this for the purpose of giving the background to the situation as we have it at the present time and also in an effort to try to outline some of the difficulties, which are so many that there is nobody able to give us even a guess at what these difficulties might be if we did as the Deputy suggested. He knows that the Landlord and Tenant Commission have been sitting for some time. As I said, they have not come forward with any proposal for change. I accept that there was a very long and good discussion in the Seanad on this section. The point made during the course of the debate in the Seanad with regard to the person who would at the end of his days find himself under the State and be denied his rights is something which is extremely important. I believe I have come as far as I can. I am not saying this in any way trying to score any political points. On a technical Bill of this nature there is no question of anybody scoring anything over anybody else. It is a question of trying to do what is right. I am not saying that Deputy Fitzpatrick is not trying to do that. I appreciate that he is, but I feel that we have come a good part of the way. I am advised that I cannot go any further.

The previous Government, of which Deputy Fitzpatrick was a member, were not prepared to come as far as I have come now. This section is quite a bone of contention and I do not mean that in any derogatory fashion. This type of legislation will continue to be updated as long as the Landlord and Tenant Commission are sitting. If after having further analysed it they recommend a change, I can safely say to Deputy Fitzpatrick and the other Members of the House that whichever Minister for Justice is here I am sure he will be quite prepared to go along with it.

I have a lot of sympathy with what Deputy Fitzpatrick says, but I am afraid I cannot go any further than I have gone. I also say, without trying to score any political points, that I have gone further than my predecessor might have been prepared to go, although there is nothing definite on that either because he did not get a chance to debate it on Committee Stage. Perhaps he would have gone as far as I.

Mr. Keating

The Minister stated that there was a privileged position in 1976 where there was some doubt on this, even though the doubt did not have a judicial verdict. One cannot reasonably use that argument. It seems clear to me that the reason this is being introduced is because the State is far from sure that they have the right. The privileged position of the State vis-à-vis the private individual needs to be proved. This has not been done.

The matter that is really at issue is the concept of equality before the law. It is dangerous to embark too readily on a process of introducing legislation which is applicable to the general public but which the State, for apparently good reasons, decides not to apply to itself. The Minister said that the State has certain lands in its ownership and, in order to pursue the maximum use of those lands in the public interest, the State felt itself obliged to write this section into law. We are not disputing the right of the State to own land, to use land or to exercise its full responsibility for the public security and welfare. That is not what is at issue. The matter that is at issue is why we should embark on a precedent in law of giving to the State a privileged position with regard to the law. Most people feel that the State is overbureaucratic sometimes and not quick enough to consider the small man. Despite the goodwill of the Minister and I am sure of every Member of the House, we cannot forever be guaranteed a benign Government or a benign Minister.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): If the Deputy met him in Cork he would not think he was benign.

Mr. Keating

He was last week-end.

(Interruptions.)

An Leas-Cheann Comhairle

I do not think at this late stage we will discuss what happened in Cork.

Mr. Keating

I appreciate the Minister's difficulty in regard to this and I believe he is being advised that it is useful to put it in. If a situation ever arose where the alleged limitations on the State's readiness to utilise its ownership of land came about, the State would, as it has done in the past, introduce necessary legislation, perhaps with the co-operation of the full House, of an extraordinary nature to deal with that situation. It is a little unwholesome to me to put on the Statute Book legislation which separates responsibilities as applying to the State and individuals. It would be preferable to do without it if the only argument is the hypothetical one that the day may come when the State might have to utilise powers or exercise its responsibilities over its property in some way, as yet undefined, which would make the exercise of that extremely difficult or impossible under the law which exists for the private individual.

Deputy T.J. Fitzpatrick (Cavan-Monaghan) rose.

Progress reported; Committee to sit again.