Dáil Éireann díospóireacht -
Wednesday, 14 Dec 1960

Vol. 185 No. 8

Property Values (Arbitrations and Appeals) Bill, 1960—Second Stage.

Minister for Finance (Dr. Ryan)

I move that the Bill be now read a Second Time.

Appeals about the value of land, etc., for estate duty purposes or where it is compulsorily acquired by a public authority are settled under one or other of three basic Acts.

First, there is the Finance (1909-10) Act, 1910. It lays down that certain appeals about the value of land for estate duty purposes are to be determined by a member of a panel of referees. Appointments to the panel and the selection of the member to adjudicate on a particular appeal are to be made by a body known as the Land Values Reference Committee. This Committee consists of the Chief Justice, the President of the High Court and the Chairman of the Surveyors' Institution (Irish Branch).

Secondly, there is the Acquisition of Land (Assessment of Compensation) Act, 1919. It lays down that, where there is a dispute about the amount of compensation offered for land compulsorily acquired by any Government Department (excluding the Land Commission, which has its own special code of laws) or by any local or public authority, the dispute is to be referred to and determined by a member of a panel of official arbitrators. As in the case of the 1910 Act, appointments to the panel and the selection of the member to adjudicate on a particular appeal are to be made by the Land Values Reference Committee.

The third basic Act is the Arterial Drainage Act, 1945. It prescribes that, in default of agreement, compensation for lands, easements, fisheries, water-rights, navigation-rights, etc., compulsorily acquired under that Act is to be fixed in accordance with the 1919 Act except that the arbitrator for the purpose is to be nominated from a panel of drainage arbitrators. Appointments to and selections from this panel, also, are made by the Land Values Reference Committee.

Most of the three categories of appeal that can arise have been under the 1919 Act. The number of estate duty appeals being usually very small, it has been the practice since the establishment of the State to have the arbitrator appointed under the 1919 Act function as reference for estate duty purposes also. Up to 1934, a panel of arbitrators had not in fact been appointed as it was found that the combined work involved could be done satisfactorily by one person. Since 1934, it has occasionally been necessary to appoint an additional arbitrator in a part-time capacity but the amount of work still justifies, as a general rule, the employment of only one full-time arbitrator.

Up to 1945, the full-time referee and arbitrator was appointed for limited periods renewed from time to time but, in 1946, the dual post was filled in a permanent capacity; that position still holds good. It may here be mentioned that the functions of the Minister for Finance relating to the appointment of these referees and arbitrators are confined to determining their remuneration and period of office.

Mr. Sweetman

And paying their remuneration.

Dr. Ryan

Yes. With regard to appeals under the Arterial Drainage Act, 1945, there was until recently a panel of three drainage arbitrators, of whom one was the present full-time referees and arbitrator and the other two were civil servants. Drainage appeals have turned out to be smaller in number than anticipated and as there are none pending at present, the panel has been allowed to lapse.

While the existing practice has enabled appeals to be dealt with satisfactorily, the Attorney General advised that, as the law stands, the selection of referees and arbitrators should not be confined to a single nominee. Therefore, in order to provide a panel, the Land Values Reference Committee appointed a valuer in the Office of Public Works as an additional referee and arbitrator, as a temporary measure pending further consideration of the general question of the suitability to present-day conditions of the machinery provided by existing legislation for appointing referees and arbitrators.

Having considered the matter fully in consultation with the Reference Committee, I now propose that the law should be amended so as to abolish the need for panels as such. Possibly they were necessary when the 1910 and 1919 legislation was undertaken for, incidentally, both this country and Great Britain, but no need for them has shown up here where the volume of referee and arbitrator work has been, and still is, only such as to require one full-time arbitrator.

It is proposed that appeals under the Acquisition of Land (Assessment of Compensation) Act, 1919, shall in future be determined by a property arbitrator, with special knowledge of the valuation of land or with other suitable qualifications, who will be appointed by the Reference Committee in accordance with rules to be made by them. Emoluments and expenses will, as heretofore, be subject to the sanction of the Minister for Finance. In effect, this arrangement will mean the continuance of the existing practice whereby compensation appeals arising out of the compulsory acquisition of land are determined by the present full-time arbitrator. The appointment of additional arbitrators, if the circumstances of a particular case or cases should warrant it, will also be provided be for but, ordinarily, there should be work enough for only one full-time person.

The amending legislation proposed, therefore, will enable one or more arbitrators, who may be whole-time or part-time, to be appointed. Thus, any category of appointment will be catered for. It is intended that a part-time arbitrator will be permitted to engage in private practice but will be required, before being appointed to deal with a particular case, to undertake that neither he, nor any associate of his, has any interest in the dispute on which he is being asked to adjudicate. A whole-time arbitrator will be debarred from engaging in private practice.

As already mentioned, the number of estate duty and drainage appeals has been small, the annual average for the four years ended 31st December, 1959, being 12 estate duty appeals and 3 drainage appeals as against an average of 40 appeals a year under the 1919 Act. It is proposed, therefore, that the separate legislation for the appointment of referees and drainage arbitrators should be rescinded and that, instead, estate duty and drainage appeals should in future be settled by a property arbitrator to be appointed under the 1919 Act as now proposed to be amended.

Provision is also made in the Bill to ensure that the conditions of service of the existing referee and official arbitrator will be no less favourable, when it is passed, than immediately before it is passed. Provision is made, too to ensure the validity of decisions under the 1910 and 1919 Acts notwithstanding the fact that up to 1958 appeals had been decided without panels of referees or official arbitrators being in existence.

Apart from the measures proposed to secure a more rational basis for appointing an arbitrator or arbitrators to determine appeals under the 1910, 1919 and 1945 Acts, no change in the existing law is proposed.

Mr. Sweetman

This Bill arises, I think the Minister will agree, following consideration by the Attorney-General of a question I raised in this House some couple of years ago. The question I raised then was that the appointment of one person to be an official arbitrator, or referee as he was then called, was not complying with the law, which said there should be a panel. The Minister has accepted that the point I raised at that time was correct, and it is for that reason that the Bill is being introduced. However, I regret very much that the Minister, in introducing the Bill, has completely departed from the panel system.

I have tried to trace the exact method by which the person was selected from the panel of referees but unfortunately it appears to have been done by means of rules made under Section 33 subsection (2) of the Finance Act, 1910 and under a similar type of section in the Acquisition of Land (Assessment of Compensation) Act, 1919. Those rules, unfortunately, are not available in the Library. Therefore, apart from certain knowledge that I may have in certain other places, I am not quite clear as to the manner in which the selection was supposed to be made under those Acts.

Let me say at once that I agree with the Minister that it is highly desirable that we would have a similar method of administration for appeals under the 1910 Act, under the 1919 Act and under the 1945 Drainage Act. The basis and method by which appeals are taken on either of these procedures should be the same. That does not mean at all to say that the arbitrator should be the same person. In fact, it would be quite nonsensical to suggest that the arbitrator who would adjudicate on the value of profit rents arising in an estate duty case would necessarily be the best person to adjudicate on the improvement to the value of land arising under the Arterial Drainage Act, 1945. The two types of skill required are quite different and, to a greater degree, the two types of experience required are different.

I want to make it perfectly clear that in anything I may say in this respect there is no reflection whatever on the person who is covered in subsection (4) of Section 2 but it is quite impossible for any one man to be adequately skilled in every aspect. Apart from that, no one can get along in this world without occasionally crossing swords with another. I am trying to discuss this without reference to the man to whom I have referred and who has been carrying on satisfactorily over the years. One may cross swords with a person and on that account may feel one will not get a reasonable deal from him. The person selected as arbitrator might perhaps have some interest in the property over which he is asked to arbitrate. There are so many facets and aspects of particular interest that it is highly desirable not to restrict this to one person but to go back to the old panel system and to operate the panel system properly.

I can see that it was highly desirable to have a different arbitrator for drainage. I am not quite clear whether it was necessary to have three drainage arbitrators. If it was, that can be cut down to one. I do not at all see that it helps anyone to believe that he is getting a fair deal by having only one person appointed to deal with all the various matters and the Minister should agree on Committee Stage to change Section 2 and to ensure that at least the very minimum of choice remains by having at least two arbitrators.

As the Minister has said, there have been very few estate duty appeals in recent years. One of the reasons for that is that the Estate Duty Office of the Revenue Commissioners knew what they were in for under Section 6 and they made it their business to settle cases if they got half a chance. On that account many cases were settled over recent years that otherwise perhaps might have gone to a more full hearing. That is all to the good for the individuals concerned. Perhaps the people who were affected, who were going to have to pay, did not realise why their solicitors had been able to effect a settlement so simply. I hope the Minister will not now see a reversal of the procedure that has operated in the Estate Duty Office, after reference to the Valuation Office, over several years, to settle cases rather than have them thrown at an early stage to the referee, or arbitrator as he will now be called.

Up to this, the position has been that every reasonable effort has been made by the Valuation Office to agree to estate duty valuations. I hope that will continue. I thought I detected in the last three or four months a slight change in the practice there. I hope it was just that I happened to run across a series of cases which were out of the ordinary run and that the practice that there was there for years will not be departed from.

I want, therefore, to urge the Minister very strongly indeed to retain the panel system, to retain it, if he likes, by having two arbitrators only, not any more, so that there can be a selection, so that a person, if he has had some difference of opinion—as we all have differences of opinion from time to time—with one arbitrator can select the other to hear his case. I do not want to be trite in relation to these land acquisition cases but the Minister will agree with me that it is not a question of justice being done; it is a question or justice seeming also to be done. If a person has had some difference of opinion with a man and knows that his claim must go before that man, that there is no possible choice and no chance of having anybody else to determine the compensation he will get, he will not feel that he has had a fair run for his money. He will feel that there has been an element of confiscation in relation to his property, an element which perhaps has not been there at all.

We want to ensure as far as possible, while making absolutely certain that there is complete fairness as between the Revenue, on one hand, and the individual on the other in estate duty matters, as between the local authority on the one hand in 1919 cases and the individual on the other and as between the Commissioners of Public Works on the one hand and the individual on the other in 1945 Act cases, that people really believe that they have got a fair crack of the whip. If there is only one single arbitrator they will not so believe.

Apart from that, the Bill deals with what I would call the rationalisation of proceedings under the three previous Acts and a provision that is in Section 6. I want the Minister categorically to assure the House that he has no knowledge of any case which has already commenced, or the commencement of which has been threatened, against the appropriate authority by reason of the fact that there was not a panel in existence in earlier years.

I have no objection to a retrospective clause in this but that is only provided we know that we are not depriving somebody of a right of action which he has already commenced or has given notice that he intends commencing. The Minister is the only person in a position categorically to assure the House on the matter and I think it is very important it should go on the records of the House. If that assurance were not forthcoming I would have very different views on this Section.

Dr. Ryan

It is true that this legislation arises from the fact that Deputy Sweetman raised the matter in the Dáil on a former occasion. The question was considered and the Attorney General had some doubts—very strong ones, in fact—with regard to the legal position about the panel. As a result, this Bill has come along.

The question raised by Deputy Sweetman is that of one arbitrator. As far as the Bill is concerned, we say this to the Reference Committee: "You may appoint one or more arbitrators." If they do appoint more, they may be either full or part-time. Accordingly, the Committee have great discretion in their appointments. I think that is sufficient—that we should give the Committee this discretion in the appointment of arbitrators. Deputy Sweetman thinks it is hardly possible for one person to be a good arbitrator under the three Acts. One person has acted under the 1910 and 1919 Acts for years and as far as I know he has given satisfaction.

Mr. Sweetman

I had tried to avoid reference to that matter.

Dr. Ryan

I know the Deputy made no allegation against him and I know also that there have been no complaints.

Mr. Sweetman

I am afraid I could not accept the statement that he has given full satisfaction, now that the Minister has mentioned the matter. A great number of people think they have had a raw deal. However, I do not say there is anything sinister in the arbitrator's decision.

Dr. Ryan

I do not know if we had any arbitration under the most recent Act. If you have a good arbitrator on land values and if the value of land comes under the Drainage Act, obviously he would be the man to do it. It would be a case of water rights. What was provided for in one of the earlier Acts was that the arbitrator could have an assessor. That could be done, I presume, under this Act or the Committee might, in a particular case, select another man who is an arbitrator and have him in such a case. The Committee, at any rate, have all the discretion they could ask for and I think we are going far enough in giving them those powers. Deputy Sweetman knows, but other Deputies may not, that the claimant has no right and never had to choose an arbitrator. It was always the committee who did that.

Mr. Sweetman

I think the Committee did take account of any particular point such as relationship.

Dr. Ryan

They did take note of a valid objection and in that case they might select another person to do the job. In reference to the Deputy's last question, there is no suggestion of anybody taking proceedings. I think the only person who has questioned the legality of the matter is the Deputy himself. The Attorney General is not prepared to say he is wrong and that is why this has come along.

Mr. Sweetman

I can tell the Minister something about that at another time.

Question put and agreed to.