This Bill addresses in a twofold way the question of the payment of compensation in certain cases of planning refusal and the process of regulating the development and completion of estates. I am not sure it was appropriate for the sponsors of the Bill to combine their attempts to resolve problems in these two areas in one Bill.
The comments of Deputies on all sides of the House indicate agreement on the need for action in the area of compensation.
However, I must say that I am very much at one with the comments of Deputy Quinn who last week suggested that perhaps the most fundamental problem in this area relates to the manner in which compensation is assessable under the 1919 Act rather than as to whether compensation should be allowable. A measure of the complexity of this problem is that, as Deputy Quinn pointed out, virtually every conceivable solution has been mooted in relation to this matter over recent years and none of them has so far passed successfully the Attorney General's office in such a way that it has been published as a Bill put forward on behalf of any of successive Governments. I say that deliberately as a prelude, to indicate the complexity of the problem and the difficulty in trying to find a solution which gets the balances right, which addresses the problem and which sits easily inside the requirements of the Constitution.
I am afraid that this present and latest attempt proposed by the Progressive Democrats also falls far short of an ideal solution and, in fact, quite a number of the proposals in it, not only in relation to compensation claims but in relation to the matter of unfinished housing estates, are, I suspect, so unworkable that it is questionable as to whether some, at least, are improvements at all on the present situation. It is, additionally, difficult to establish just how the proposers of the Bill felt that it might work in practice because of the extraordinary — I venture to suggest almost unique — wording of the explanatory memorandum which accompanied the Bill, which appears to be more of a political polemic than an explanatory memorandum. It might perhaps have been more useful from the point of view of the sponsors, had they genuinely wished for support for the Bill, if they had attempted to write an explanatory memorandum which explained the Bill and how its provisions might work, rather than berating successive Houses of the Oireachtas for their inactivity in this area.
This is a problem the complexity of which is known to everybody in active politics and I am not at all surprised that there are the sort of deficiencies I have noticed in this measure and which other Members of the House have also commented on. This entire area is a problem to which there is no ideal solution. What we must endeavour to achieve, as Members of the Oireachtas, is to put in place the most workable and most achievable of measures which help to guide the area of development and redress the problems as they arise.
What we must try to achieve in the area of compensation is the very difficult task of bringing about a balance which defends the interests of the genuine landowner and, at the same time, which defeats the intentions of those who seek to use the provisions of the planning code in a manner which was neither intended nor fair. That latter example in relation to some quite extraordinary compensation claims, as opposed to amounts actually awarded in recent years, has to a large extent prompted this proposed legislation.
It is equally fair to recall that it would be a genuinely generally held view in this country that people are entitled to private property and to the use and enjoyment of such. That is established clearly in the minds of the people. It is part of a national aspiration — perhaps not an unusual aspiration, it is reasonable to say, for a peasant race to have. One need only think back to the activities of Davitt and the Land League to realise how highly Irish people value land and ownership of land. In the context of the time and preparation of the Irish Constitution 50 years ago and, indeed, in comparative constitutions both prior to and later than ours, it is not unusual to find the right of guarantee to private property in these. Indeed, it might have been looked on askance had the Constitution been put before the Irish people at that time without constitutional protection for the right to private property.
It is interesting to note that in their proposed alternative Constitution the party who are sponsoring this Bill repeated, some months ago, virtually word for word the provisions of the 1937 Constitution regarding the right of the individual to enjoy private property and the benefits therefrom. I do not disagree with that in any way. But we must try to protect, of course — and the general public would not thank us if we did not — the situation where the relatively small landowner, down to perhaps an exaggerated example of the person who owns no more land than that on which his house is built and his front and back gardens, is protected against that front or back garden being expropriated by the State without any right of hearing, or right of appeal on the part of the landowner and without any right to legitimate compensation if, after an independent hearing, it is decided that that land should be acquired by the State. That small landowner would expect that the Oireachtas would defend his small but to him very important property rights and the right to enjoy that property in privacy.
Taking that a stage further, the owner of, say, two, three or five acres of land which perhaps also has been in the family for generations, would feel particularly aggrieved if he were to have that property removed from him compulsorily, without any right to recompense or compensation. He would feel that he had a right to seek to improve that property and to benefit from its enhancement. That is what the Constitution initially and subsequently, the planning legislation set out to try to do. Equally, there devolves an onus on the Oireachtas to ensure that when misuses of statutory provisions come about, the Oireachtas moves to try to cure that situation.
There is no doubt in my mind that, in a number of compensation claims which were made in recent years, the provisions which were designed to protect the common man and his right to private property have been deliberately misused by certain speculative developers in an effort to force compensation from the public purse into their coffers in return for their carrying out virtually no work or enhancement whatsoever. On the other side, as has been pointed out, the level of compensation which has actually been paid out in recent years is indeed relatively minor — somewhere in excess of £80,000 but that is not to diminish the fact that it is also well known that in quite a number of cases the planning authorities had decided that it was better to grant a planning permission of some type which they might rather have chosen not to, so as to avoid compensation cases. To have an idea of the full picture, it is fairer that we should realise that, apart from the money actually paid, there have been instances of permissions actually granted where it seems those permissions might not have issued had it not been for the compensation provisions.
I think, however, that any attempt to mend this problem will have to involve the 1919 Act and the method in which the level of compensation is paid. Any measure put forward ought to include some provisions of that nature. I was somewhat surprised that this present Bill did not do that. The difficulty in trying to remedy the problem by including further non-compensatable reasons is that, as Deputy Birmingham pointed out last week, when he quoted from the book or article on this subject written by a member of the Irish Bar who has apparently particular knowledge and perhaps expertise in the area, at present the list of non-compensatable reasons is as long as one's arm. Despite that there are still cases where individuals could and do take compensation claims. No matter how many further non-compensatable reasons the Oireachtas attempts to include in the legislation there will still arise from time to time cases where the general public, quite rightly, feel that compensation ought not to have been paid in a case, and that a case was a misuse of statutory provisions. That is not to say that there should not be an attempt to include further non-compensatable reasons, but they need to be workable. I find some difficulty in the additional non-compensatable reasons that have been included in section 3 of this Bill. I am not sure that they will improve the situation. I am surprised that there has been no attempt to address a problem that arises regularly. When a planning authority refuses development for clearly non-compensatable reasons and the decision is appealed to An Bord Pleanála, the appeals board will then quite regularly confirm the decision of the planning authority in refusing permission but will exclude from the reasons for refusal the non-compensatable reasons. As long as that situation can continue, we can write a volume of non-compensatable reasons but the refusal will still be compensatable because the appeals system will allow for decisions to be made which do not include non-compensatable reasons.
I am surprised that so little discussion in this debate has centered on section 3(c) of the Bill because in a manner which is not in the present legislation this paragraph clearly allows for compensation to be paid to land owners if they are refused permission for reasons of public policy. For example, where a planning authority decide that an area should be zoned for public open space, this Bill is actually including a new and definitive compensatable reason which was not previously as clear. It is rather strange, reading the contributions from the sponsors of the Bill that they do not advert at all to section 3(c). It is not a paragraph to which I take particular exception because if it is deemed to be in the public good that one piece of land ought to provide the amenity for other lands which are to carry development and if it is felt that the public should have the enjoyment of that land, the public should be prepared to pay fair compensation for its use. It is interesting that a new compensatable reason in a separate paragraph to be added to a section other than section 3 is included in the Bill.
Reference has been made to the fact that in recent years members of the Judiciary have pointed out that the remedy in this matter lies with the Oireachtas. It is fair also to point out that there is clearly not unanimity among the Judiciary in relation to the problem and how it might be dealt with. The recent issue of Administration which was devoted exclusively to the Constitution, carried articles by Mr. Justice Brian Walsh and his successor as chairman of the Law Reform Commission, Mr. Justice Keane. Mr. Justice Walsh in a very trenchant defence of the private property Article, said that the Irish Constitution unusually, with one exception, makes no express provision for the payment of compensation and he went on to draw comparisons with the Constitutions of France, the US, the Federal Republic of Germany, Spain, Greece and with the First Protocol to the European Convention of Human Rights, all of which specifically make provision for compensation, and he said that a Professor Where in his book on modern constitutions suggested that the Irish Constitution in the absence of specific provision for compensation payment hardly goes further than the Constitution of Yugoslavia. After that trenchant defence of Article 43 by Mr. Justice Walsh, his successor Mr. Justice Keane suggested that there is some obvious deadwood in the Constitution and specifically that the utility of some of the Articles specifying individual fundamental rights is at least questionable. That and private property is an obvious case, he said.
There is clearly disagreement even among the Judiciary as to how the protection of property rights ought to be carried out. A lot of the case law in this goes back to the definition by Mr. Justice Kenny when he examined the 1963 Act and found it to be constitutional, when he referred to a bundle of property rights which everybody has and suggested that the removal of any one of those rights was not necessarily compensatable. It is difficult to understand, for example, the decision of the courts in some of these cases taken with their decisions in other cases. I mention in passing the O'Callaghan case where the Supreme Court ruled that compensation was not payable to a land owner who had had an order under the National Monuments Act placed upon his land, although they held equally that the ESB could not expropriate land for the purpose of erecting pylons without some form of appeal situation. On the other hand in the case of Druher versus the Irish Land Commission they ruled that the absence of compensation provisions was not unconstitutional. The extra-judicial pronouncements of members of the courts in a volume like Administration and indeed the contrasting court decisions shows that the courts and members of the Judiciary often have divided views on this matter.
I noticed with interest that one of the references in the course of the debate was to the fact that some people seem to feel that there has been an over-rigidity in our planning laws and that there was perhaps in recent times an attempt being made to have a more open and flexible attitude on the part of the planning and development authorities. The effect of section 3 would be to impose an even greater rigidity into the system and place a paramount importance on developing plans many of which are outmoded and well outside the time for their statutory review. I am not sure just how realistic this extreme emphasis on the development plan would be from the point of view of practical development. Before I turn to the other part of the Bill I would make the point — and the case is referred to specifically in the explanatory memorandum — that under section 3 (c) of this Bill the XJS case in Killiney which caused so much furore is clearly provided for as a compensatable case. It would be extraordinary if the amount eventually awarded by the arbitrator under paragraph (c) of section 3 was any less than the amount which the arbitrator awarded in the XJS case.
What is also relevant is that the entire area of Killiney Hill was offered to the local authority at a cost of £50,000 but for their own reasons they chose not to buy it. If a local authority decide that they want to purchase an area as a public amenity then they have to be prepared to pay a realistic and a reasonable price for it. In the XJS case because the local authority chose not to acquire the land at a very reasonable price, they later ended up having to acquire a smaller portion of it at a greater price. There is a lesson to be learned from this.
The proposal in respect of obtaining orders in the Circuit Court and that those orders should be of a mandatory as well as of a prohibitive nature along with the general provisions contained in section 4 are welcome. Last week Deputy Birmingham made the point that orders obtained under section 27 of the 1976 Act were originally intended to be made not only against a development company but against the directors and shareholders of a development company. In recent years the courts have moved away from imposing such a liability and for a resolution to this problem there would have to be a return to that provision whereby orders obtained under section 27 of the 1976 Act could be made against the shareholders and directors of a company.
I suspect that the passage of the Companies Bill, which will place greater responsibility on the directors of a company generally, will have very welcome spin-off effects in the area of development in that unscrupulous developers who set up one company after another would no longer be able to do this in the same way because of the personal responsibility they would have to carry as a director or shareholder of a previous company. It is important to remember that the Companies Bill would make a very important tool available to planning authorities who are endeavouring to secure more orderly development.
At present it is difficult to see how this problem can be resolved. It is not possible to discriminate against a planning application on the grounds of the person sponsoring it because the planning application must be considered from the point of view of suitability to the land in question. It may very well be that the planning authority with a little bit of imagination might be able to take cognisance of the previous track record of the applicant through the size of guarantee bond which it would decide to impose. I do not think that this course of action is resorted to very often.
The provisions of the 1963 Act as amended by the 1976 Act offer far greater scope for finding a solution to the problems of unfinished estates and non-compliance by developers. One of the things the Minister could do is to encourage planning authorities to pay more attention to their powers under the 1963 Act as amended by the 1976 Act and to encourage them to have a much more "hands on" approach to developments as they are taking place rather than just issuing permission and then later discovering that there is a problem in that the estate has been left unfinished. The planning authority should monitor the development as it is taking place. Any attempts to simplify the provisions contained in section 27 of the 1976 Act such as contained in section 4 of this Bill are to be welcomed but it would be far more preferable if the planning authority were able to sequester the guarantee bond and use those moneys to resolve some of the problems.
The issuing of letters of compliance should also be resorted to more often by planning authorities. It would be fair to say that better management in planning authorities would result in a resolution to many of the problems and would prevent many of the problems becoming intractable.
My difficulty with this Bill lies with the way in which the sponsors of this Bill have attempted to address the problem of unfinished estates in sections 5 and 6 of the Bill because essentially they are Utopian. If we lived in a Utopian world, there would be no need for legislation as those problems would not exist. Section 5, for example, takes no account of the existing state of the construction industry and no account of the difficulties which would be presented for purchasers who were endeavouring to get finance in order to buy houses if a restriction was inserted that they would not be allowed to occupy those houses until the estate had been completed to a particular standard laid down by the planning authority.
Section 6 contains an extraordinary manner for appointing a planning receiver. I do not see what function a planning receiver would have unless he was going to obtain title to a property. As we are all aware, most development companies obtain funds from financial institutions and a financial institution will not advance money to a development company unless they have first charge on the property.
If the first charge is to be set aside in favour of the planning receiver, then the financial institutions are not going to advance money. There certainly would not be a problem because a development did not take place. If the first charge is not going to be set aside then the planning receiver is going to have a thankless task because he would have to liquidate the remaining assets of the development company on foot of paying off all or part of the first charge of the financial institution who bankrolled the development in the first place. Whatever about some of the more meritorious aspects of this Bill, and section 7 which endeavours to address this problem falls into that category, whoever dreamt up section 6 did this Bill a serious disservice. I have to say, with respect, that section 6 contains a rubbish proposal which does not deserve to be contained in any measure which claims to seriously address this problem. The solution to this problem is to allow the local authorities more ready access to guarantee bonds, for them to have better management expertise and for them to maintain closer touch with developments as they are taking place. They should also have the power of acquisition and the power of charging the development or associated companies. The concept of having a planning receiver amounts to nothing more than gloss; it contains no depth when one examines it.
I have expressed our reservations on major aspects of this Bill and I have to say that if it passes Second Stage we, in the Fine Gael Party, will be proposing major amendments on Committee Stage to section 3 and possibly section 5 although I suspect we may be more inclined to oppose section 5 particularly because of the way it is worded at present. Certainly section 6 will be opposed outright on the basis that it is unworkable and is not suitable for inclusion in any serious legislation. I agree wholeheartedly with the provisions contained in sections 4 and 7 and I accept that attempts should be made to address these problems. However, I would have to suggest to the House that while the aspiration is laudable, the solution is suspect.