Dáil Éireann díospóireacht -
Wednesday, 14 Feb 1990

Vol. 395 No. 7

Local Government (Planning and Development) (No. 2) Bill, 1988: Committee Stage (Resumed).

NEW SECTION.

Debate resumed on amendment No. 8.

In page 5, before section 5, but in Part II, to insert the following new section:

"5—Notwithstanding any provisions in the Land (Assessment of Compensation) Act, 1919, no person or company shall be entitled to compensation as a result of a decision made by a planning authority or by the Board arising from a refusal of permission to develop such land where such compensation would be in excess of the existing use value of the land for which planning permission was originally sought and where such claims had been made on the estimation of the increased value which would accrue if planning permission had been granted.".

(Deputy Quinn.)

Mr. Gilmore

The method of calculating the amount of compensation that might be paid is extremely complex and has been the subject of some litigation. The Irish Planning Institute in their submissions drew attention to what they regarded as the two key clauses in the 1963 Act — section 55 (2) and 55 (3). They made the point that those two clauses in the 1963 Act were the subject of a court case in 1982 where the High Court held that the claimant was not confined to the probable development value of the land if the permission refused had been granted. Both of those clauses were in the original Bill in rules 13 and 14 respectively and they are repeated in the Government amendment No. 60 in rules 3 (2) (c) and 4 (1) (a) of the First Schedule. The net effect of that, as I read it, but I am open to correction by the Minister, would be to continue to allow a situation whereby the compensation would be calculated on the basis of the development potential of the land rather than on the actual loss incurred by the landowner.

The amendments I have tabled are to the effect that calculation of compensation should be on the basis of the actual loss incurred. I believe that should be stated explicitly in the rules governing the calculation of compensation because the rules will have to be operated by arbitrators. It is important that they are clear about what is intended and that the ambiguities contained in the 1963 Act, which led to a situation whereby the level of compensation awards and claims were far in excess of the price originally paid by the landowner for the land or of the actual loss incurred, are cleared up. I believe a number of things should be taken into account. I mentioned before we adjourned for lunch that the price of the land should be taken into account; the possible availability of exempted developments should not be taken into account; the question of the availability of comparable land nearby should not be taken into account, because those two factors would serve to inflate the level of awards being made.

I have also proposed an amendment which would require that the value of the land attributable to completed or planned public infrastructural works should not be taken into account when calculating compensation. I will give an example of what I have in mind. If the local authorities are providing additional water or sewerage systems under the Minister's Environment Action Programme which enhance the value of the land, as those facilities have been provided in the first place with public money, I think it would be quite wrong if at some future stage an applicant were to claim that because services were made available which in turn increased the value of the land that should enhance the possibility for compensation. I think the provision of such infrastructural works should not be taken into account when calculating compensation. I am proposing specifically that rule 3 should be deleted. Basically, it provides for the development value of the land to be taken into account and also the rule that would require the arbitrator to take into account the possible development potential in the light of any undertaking which might be given by a local authority. At the end of the day any compensation that would be paid should be based on the actual loss incurred by the landowner. I think that is the only basis on which compensation should be allowed. I do not believe the landowner should be compensated for the possible future development potential of the land.

Minister for the Environment (Mr. Flynn)

I thank the Deputies who have contributed to this very important set of amendments and I would also like to thank the House for agreeing to take such a large number of amendments together. However, as far as my amendments are concerned there is really only one substantive matter involved, and that is the new set of valuation rules for determining the amount of compensation. These new rules are set out in amendment No. 60 which proposed a new version of the First Schedule to the Bill.

All of the other ministerial amendments are either consequential or otherwise dependent on this basic provision. For example, amendment No. 16 and all 13 amendments to sections 18 to 24, inclusive, are concerned solely with applying the new First Schedule to the less usual categories of compensation claims dealt with in Part IV of the Bill.

The main occasion for compensation claims envisaged under the Bill is the refusal or adverse conditioning of planning permission as dealt with in section 12. However, the possibility of compensation is provided for also, as previously, in relation to certain other actions by planning authorities under the 1963 Act: removal or alteration of a structure, discontinuance of use, removal or alteration of a hedge, tree preservation orders, creation of public rights of way, entry on land and placing or dealing with cables, wires and pipelines. Only very rarely have compensation claims arisen under any of these provisions, and in some cases, as far as we know, no claim has ever arisen.

Because of the restructuring of the valuation rules which I am now proposing in the revised First Schedule, it is necessary to make certain adaptations to these provisions of Part III of the Bill, so that the rules can be meaningfully applied in these cases. The bulk of the amendments which we are now discussing are concerned with this and provide explicitly that the First Schedule, as proposed by amendment No. 60, shall apply to assessment of compensation in these instances also.

Having disposed of these largely technical adjustments to the Bill, I would like now to deal with the key amendment No. 60 which proposes a new version of the First Schedule. This sets out an entirely revised set of rules for determining the amount of compensation in all cases arising under the Bill. The Bill, of course, severely limits the right to planning compensation, but in cases where planning compensation should still be payable, the measure of it should be the reduction in the value of a person's land which is directly attributable to the adverse planning decision.

Rightly or wrongly, the valuation rules of the 1963 Act seemed to encourage a maximalist approach to assessing compensation. In practice, compensation tended to be based on the difference between the value of land following the adverse planning decision and its notional value had the planning permission been granted, albeit subject to suitable conditions. In other words, the top line for valuation purposes tended to be set by the landower's own aspirations for development of his land in the form of his planning application.

The most important and radical provision of amendment No. 60 is to do away with this maximalist assumption. The top line which it fixes for valuation purposes is simply the realistic market value of the land immediately before the adverse planning decision, but the new rules make it absolutely clear that only reasonable prospects for developing the land are to be embraced in this assessment. In particular, regard must be had to the fact that the land might not, at the relevant time, have carried any substantial planning permission and that its prospects of obtaining such permission would have to be viewed by the market as uncertain. The new rules categorically disallow any automatic presumption of the kind of planning permission which the owner was seeking.

The valuation framework proposed in the new First Schedule is clearly structured around the difference between the antecedent and the subsequent realistic market value of the land, subject to all of the qualifications provided by the previous rules. As well as making the fundamental change which I mentioned, the new First Schedule reorganises and refines most of these previous rules. I can deal with it in greater detail in response to particular queries which Deputies have raised.

Deputy Gilmore has also put down an extensive range of amendments relating to valuation matters. These substitute concepts such as the "actual loss incurred by the applicant" or "the financial loss incurred by the developer" for the concept of reduction in value which underlies the existing valuation provisions of the Bill.

For a start, I am not clear that the notion of loss in itself differs appreciably from that of reduction in value, but if I understand Deputy Gilmore's amendments correctly, he may be concerned to relate the idea of loss very closely to the particular circumstances of the applicant. If so, his amendments are attempting to import an element of subjectivity which would not be consistent with accepted land valuation principles. Planning is about regulation of land use and planning compensation must relate to the effects of this regulation on land values, not to the personal circumstancese of the claimant.

Having said this, I am grateful for Deputy Gilmore's attempts, as expressed in his amendments, to improve and clarify the new valuation rules. I can accept his amendment No. 7 to my amendment No. 60, which involves the deletion of Rule 4 (2) of the new First Schedule.

I cannot accept his amendment No. 5 to Amendment No. 60 which would prevent account being taken of any increase in the value of the land attributable to planned public infrastructural works. If these works have or would have enhanced the value of land, then it is to be assumed that, had they granted planning permission, the planning authority would have levied an appropriate development contribution. Rule 3 (2) (c) already requires the arbitrator to have regard to this likelihood and to take account of the effect on open market value.

Deputy Quinn speaks quite knowledgeably about these matters and I appreciate his intervention in this regard. He spoke knowledgeably about the history of the development land question and the principle of setting the compensation for acquisition of land at existing use value, as recommended by the majority Kenny report. This was for the outright acquisition of land as distinct from the purposes of this Bill. Under the Bill we are attempting to fix the compensation to be paid for the reduction in value arising from planning decisions, but the ownership of the land is not changing. My approach is to fix the compensation not at purchase price or value but at the difference between the antecedent and the subsequent realistic market value of the land. The new rules categorically disallow any automatic presumption of the kind of planning permission which the owner was seeking.

Deputy Quinn's amendment No. 8 would seriously compromise the possibility of planning compensation. It provides that compensation would be disallowed where it exceeds the existing use value of the land prior to the planning application, and where a claim is based on the estimate of the increased value which the desired planning permission would have brought.

I have no difficulty in accepting the substance of the last part of this amendment. As I emphasised, paragraph 3 of the new proposed First Schedule provides for this very same point and will ensure that the top line, for the purposes of calculating reduction in value, will not be set by the aspirations of the planning application.

I have difficulty, however, regarding the relevance of existing use value to the circumstances of planning compensation. A landowner will enjoy the existing use value of land both before and after an adverse planning decision. In that sense, it is the bottom line for the purposes of calculating reduction in value, but, by definition, the due amount of planning compensation cannot be the existing use value since the landowner will not have lost this.

Planning compensation has to be based on the difference between the antecedent value of land, when it was unaffected by the adverse planning decision and its subsequent value when it has been affected by the planning decision.

That is generally the view I put to the House. While I can concede on some items, I cannot do so in respect of others.

Mr. Shatter

All these amendments are addressed to the substance of the First Schedule. The other amendments are consequential or related. I welcome the fact that the Minister has substantially changed the approach from the provisions in the Bill as published. Deputy Quinn was right in one matter — I am sure the Minister would not disagree with him — that the complexities of the First Schedule are such that, whether we are talking about reduction in value, as it is referred to here, or other concepts, the vagaries of judicial interpretation on occasion can be such that none of us in this House could predict with 100 per cent certainty, in the event of a judicial analysis of the Bill, what might emerge from the courts structure. I spent some considerable time looking at the First Schedule and its implications. In fairness to the Minister it has to be said he has come up with a formula which is a great deal better than that contained in the first presentation of the Bill.

The contingency we are all anxious to get at is that if compensation is to be paid it will be compensation for a genuine, real loss and not compensation for some theoretical loss that is not a reality. Moving away from the potential maximum value of land based on somebody's hope as to what he could achieve is very welcome.

I do not want to intervene at any great length because the Minister has set out his intentions. We could spend many hours going over this First Schedule. I am taking a simple approach to it, which is that the Minister has come a long way towards meeting the various concerns we had on this side of the House about the original provisions of the Bill. In the context of the Bill now before us we have a much improved provision. The concept of reduction in value, as it is dealt with in the First Schedule, I hope will work in the manner the Minister envisages. I have no doubt there is a possibility that this will be analysed and parsed during the course of court proceedings.

In this intervention, so as to give the Minister an opportunity to respond I want to raise for discussion purposes amendment No. 2 to amendment No. 60 which I have tabled to be included in the First Schedule in Rule 2 (a). In Rule 2 (a), which deals in the First Schedule with the rules for the determination of the amount of compensation, there are a number of matters to which regard is to be had in determining what is defined as the antecedent value and the subsequent value of the land for the purpose of Rule 1.

I have no particular criticism to raise with the items listed. I thought it a curiosity in Rule 2 (a) (i) to (iv), that the various matters listed there do not deal specifically — though I presume in trying to look at the open market value it is something that would result in regard having been had to it, if we are dealing with land recently purchased or acquired — with looking at the actual price paid for the land if it was land acquired within four to five years of the compensation claim arising or acquired by way of inheritance. It does not deal in specific terms though it is implicit that regard would be had to these matters. Neither does it deal with what might have been the valuation put on that land at the time it was inherited.

I should like to hear the Minister's response to amendment No. 2 to amendment No. 60 which I have tabled in the context of our discussion on these amendments.

Mr. Flynn

Deputy Shatter has moved amendment No. 2 to amendment No. 60.

An Leas-Cheann Comhairle

No, he has not moved it. He has dealt with it for discussion purposes only. There is one amendment before the House and debate is taking place in respect of all the others.

Mr. Flynn

Deputy Shatter's amendment to my amendment No. 60 would require the property arbitrator, in determining both the antecedent and subsequent values of land, to have regard to any price paid for the land within the previous six years, and to any valuation for death duty purposes within the same period. I consider that this last aspect is adequately catered for by paragraph 2 (c) of the First Schedule which provides that all returns and assessments of capital value for taxation made or acquiesced in by the claimant may be considered.

The first part of the Deputy's amendment seemed to me to be unnecessary. The arbitrator's basic terms of reference have already been set in paragraph 1 of the First Schedule. They are to operate on the basis of open market value before and after the adverse planning decision. It is axiomatic that any recent sale price for the land will be relevant to this system of open market valuation.

If I might have the indulgence of the Chair and Members present, perhaps I might read into the record some details of the Schedule which might be of advantage to those who would be reading it outside this House. In a matter of this nature, which might have a subsequent hearing in another forum, it might be just as well to have this read into the record.

Rule 1 establishes the basic concept that reduction in value is to be calculated as the difference between the antecendent and the subsequent value of land.

Rule 2 sets out the facts which are to be considered, or not considered, in determining both antecedent and subsequent values. All are derived from the First Schedule as originally published. Rule 2 (a) (iv) is an abbreviated version of the earlier Rule 2, and provides that regard should be had to the market value of comparable land in the vicinity of the land being valued.

Rule 2 (b) (iii) is a modified version of Rule 5 in the previous draft which has been expanded to exclude from reckoning any element of value attributable to the use of land or the use of any premises on it in a manner which could endanger public safety or the environment. Rule 2 (b) (iv) is the former Rule 8 (a). Rule 2 (b) (vi) goes beyond the former Rule 10 in excluding from consideration any development proposal of a statutory body affecting the land; the former Rule 10 referred to development proposals of a local authority only. Rule 2 (c) is derived from the former Rule 1.

Rules 6 and 8 (b) of the original Schedule have been omitted. Rule 6 was made redundant by the introduction of the concept of antecedent and subsequent values. Rule 8 (b) provided that regard was not to be had to any depreciation or increase in the value of land attributable to the inclusion of the land in a special amenity area order; this was unnecessary since the Second Schedule provides that compensation is not payable in respect of development in an area to which such an order relates.

Rule 3 of the new Schedule sets out the other matters to which regard must be had in determining antecedent value. It provides that regard is to be had to the reasonable possibilities, if any, for development of the land which, having regard to all material considerations, could be held to have existed immediately before the adverse planning decision. The material considerations to be taken into account include the likelihood or unlikelihood of obtaining permission to develop the land in the light of the provisions of the development plan and the nature and location of the land. Therefore Rule 3 moves decisively away from the maximum advantages concept of valuation to a more realistic framework.

Rule 4 sets out the other matters to be taken into account in the determination of subsequent value. Sub-rule (1) requires the assumption to be made, in the case where planning permission has been refused, that permission would not be granted for any development of a kind specified in section 14 (2) and also requires account to be taken of any conditions which could reasonably be attached to any permission granted. Rule 5 defines `statutory body' for the purposes of Rule 2 (b) (vi). It is a technical matter and it will be of some advantage to those who will be seeking to interpret it afterwards.

An Leas-Cheann Comhairle

The Minister is perfectly in order. I take it that there is no great divergence in what I have heard. I wonder if Deputy Quinn is happy with the assurances given to him about his amendment No. 8?

Mr. Quinn

I hesitate to disappoint the Chair, because I would like to make progress in this but——

An Leas-Cheann Comhairle

It is no disappointment. I will now call Deputy Gilmore.

Mr. Quinn

We will be here for some time.

Mr. Gilmore

This is a complicated First Schedule and, as the Minister said, the detail of what is contained in this First Schedule may well be the subject matter of very expensive litigation in the years to come. We would do well to spend some time teasing out exactly what is meant by this because this will determine how much compensation will be paid.

I appreciate that we are dealing with this all together. Because we are dealing with the total issue of how compensation should be calculated it is inevitable that we will hop from one aspect to another but it might be worthwhile doing that for a while.

I will first deal with the concept embodied in the First Schedule. The Minister made the point that he was not entirely clear as to whether the concept of a reduction in value differed very much from the concept of actual loss incurred which I sought to introduce into the Schedule. That was something I was not clear about either, when I was reading the Minister's new First Schedule. I was not clear as to whether what the Minister intended to do was roughly the same as that which I would like him to do. I am still not 100 per cent clear on that. What the Minister is proposing is that compensation will still continue to be calculated on the basis of the development potential of the lands although not necessarily on the basis of the maximum development potential of the land. That is different from the concept of the actual loss which may be incurred as a result of the decision to refuse permission. The Minister felt that to introduce the concept of actual loss incurred might introduce an element of subjectivity into the whole calculation procedure. I suggest that it would take the element of subjectivity out of it, that it would be easier for an arbitrator to assess the loss actually suffered by a landowner who had been refused planning permission, then to try to calculate a reduction in value, because the reduction in value has to take into account the possible potential of the land. There is a difference in the concept. I would like the Minister to tease that out a bit more with us.

In the whole area of the different qualifications and elements built into this, as to what constitutes a reduction in value, there is very considerable subjectivity and we would like some clarification of it. Let us deal with the question of exempted development. It is said that in determining the antecedent and subsequent value of the land, regard should be had to the fact that exempted development might have been carried out on the land. Does that mean that the arbitrator is being asked to notionally increase the value of the land for the calculation of the compensation on the basis that exempted development could have taken place on it?

In relation to the question of the open market value of comparable land, if any, in the vicinity of the land whose value is being determined, what does that mean? Does it mean that if I own a plot of land and I am refused planning permission and there is a plot of land next to it which has planning permission, the value of the land for which planning permission has been granted is to be taken into account in deciding on the compensateable value of my land? At what point are the open market values of comparable land to be assessed? The market values of land vary from time to time. I am not clear about this. There is a great degree of ambiguity and subjectivity here which would leave a loophole for large claims.

I am disappointed that the Minister has said that he is not prepared to accept my amendment No. 5, which says that no account shall be taken of planned public infrastructural works on the basis that that could be taken account of by the levy which might be charged for those works in the planning application. That is fair enough as far as planned infrastructural works are concerned, but suppose we take an area in, for instance, north County Dublin which because of the Environment Action Programme announced by the Minister will probably get new sewerage facilities in the next ten years — there is a degree of inevitability about that because of the Minister's stated intention to halt the discharge of raw sewage into the sea — will it be argued under this Schedule that the value of the land after these works have been carried out will be increased? That must be addressed. The same would apply for other infrastructural works such as the provision of telecommunications, electricity or roads. Many developments taking place are in the vicinity of major roadworks. If the public put a large sum of money into the building of the Shan-kill-Bray by-pass, the southern cross route, the south-eastern motorway, all of which are road developments in south County Dublin, will it be argued that the value of land in the vicinity of those works will be increased as a result of those works, that because roads and water services are provided the value of the land concerned has increased? It should be expressly stated in the Bill that any increase in the value of land which is attributable to those works should be taken into account and possible compensation levels should be reduced to take account of that. I am disappointed that the Minister has not agreed to take my amendment on board.

Rule 3 says that regard shall be had only to such

reasonable possibilities as, having regard to all material considerations, could be judged to have existed immediately prior to the relevant decision under Part IV of the Principal Act.

This idea of "reasonable possibility" is one of these great vague phrases which could mean anything to anybody. The whole idea that the Minister seems to be building into the Schedule is that account will be taken of the reasonable possibilities for development. Who will say what "reasonable possibilities for development" will be? With respect, this is the kind of loose terminology which gave rise to the situation under the 1963 Act whereby the courts concluded that the fact that account was to be taken of the conditions which might be imposed on a planning permission implied that the planning permission should be granted in the first place.

The rule goes on to deal with material considerations, the nature and location of the land and the likelihood of further permission to develop in the light of the provisions of the development plan. This means that gates are being opened all the time to increase the level of compensation paid. My concern is that the First Schedule as it stands continues to leave open the possibility that large compensation claims will still be made and awarded. There is a need for a very great degree of clarity about what is intended here. For that reason there is a difference between the idea I put forward that it should only take account of the actual loss incurred rather than the reduction in value which is subject to too great a degree of subjectivity.

Mr. Quinn

We are all so busily engrossed trying to understand what we are saying to one another that there is a certain reluctance to participate in this debate. However, it clearly underlines the complexity of what we are trying to do and, if we have difficulty in understanding it, we should reflect on the implications for the public at large. The core of this Bill is to identify the areas in which compensation will be paid. They are listed in section 5 (a) to (i), inclusive. In respect of all the claims for compensation which involve some form of loss of value, the way the value will be determined is set out by the Minister in the Schedule in the rules for the determination of financial compensation. That much is clear.

The revised amended First Schedule is a considerable improvement on the original Schedule but it is still not clear whether the maximum value to which the Minister referred in various interventions represents the "hope" value or the development value of the land. Ultimately, when this Bill becomes an Act and is being discussed by a court following a dispute, will the professional valuers who have to interpret it — and who are clearly an established professional body in their own right — have a clear understanding of what the Legislature intended? Did the Minister have consultations with the representatives of the Society of Chartered Surveyors in relation to this matter? While we can comment on the Bill, if any of us was involved in a dispute on behalf of a local authority or as a private citizen we would have to turn to a member of the Society of Chartered Surveyors. They could very well say that they will do the best they can but that the rules are so complex there is no degree of clarity and they cannot say that we can reasonably expect a certain sum.

When I moved the amendment I said that my concern was twofold. I am concerned with the practicality of application from a purely operational, professional point of view of this legislation and I am not competent to evaluate that. My second concern is the value system which will be applied in the absolute sense. There were clearly a number of substantial changes in the First Schedule and they did not come about lightly. Will the Minister inform us whether the changes were subject to informal consultation with the Society of Chartered Surveyors?

Mr. Flynn

My officials had discussions with the chartered surveyors.

Mr. Quinn

Will the Minister be more precise in relation to the wording in the First Schedule? I appreciate that confidentiality is involved and that the Department must have due consideration to the primacy of this House in relation to looking at texts. However, it is my intention to have consultations with those people between Committee and Report Stages to seek further clarification in regard to streamlining, if that is felt necessary.

Mr. Flynn

The society did not see the text but there was a general discussion about it. I cannot go beyond that but obviously the Deputy will be taking advice between now and Report Stage.

Deputy Gilmore queried the time when the value of the land is to be assessed. Under Rule 1 the antecedent value is the value immediately prior to the decision and the subsequent value is the value immediately after the planning decision. Deputy Gilmore also made a comment proposing the deletion of Rule 3. Of all the provisions of the First Schedule this is the one that was deliberately and calculatedly written in to keep the top line of the valuation equation — I refer the Deputy to the end of page ten; it was deliberately done.

He also said that actual loss to a landowner should not take any account of the development potential of the land. However, development potential, where it exists, is a component of the open market value of the land. Where it exists it must enter into the assessment of the "actual loss" or "reduction in value", whichever term one likes to use. The Deputy also suggested that Rule 2 (a) (3) of the First Schedule could operate to increase compensation awards by requiring regard to be had to the possibility of exempted development being carried out on the land. I do not believe that that is the likely effect of the provision. If anything, this consideration is likely to enhance the subsequent value of the land and so decrease the amount of compensation which might otherwise have been awarded.

In both cases we are seeking to accommodate the view the Deputy would like enshrined in this and it is better left that way, particularly as far as Rule 3 is concerned. Deputies are agreed that this is a changed and enhanced Schedule. It may well be that it will have to be argued in another place, but we think we have got it right on this occasion and we recommend it to the House.

Mr. Quinn

The Schedule refers to "antecedent value" of the land and in regard to that I should like to put an example to the Minister. The Minister does not lose an opportunity to remind us that we are spending a lot of money building a massive ring road around Dublin city and there is a proposal to erect a massive shopping centre at a junction of that massive capital investment, some of which came from the EC and some from our taxpayers, on land zoned for agriculture.

What is the position if a contract to purchase that land was signed on the assumption that the prospective purchaser was informed by the seller that, having regard to the current political majority of Dublin County Council, a section 4 will be successful and the zoning will be changed from agricultural use to general purposes or commercial use? We are all aware that the market is volatile and responds to different circumstances.

I understood the Minister to say that the market value is equated to the antecedent value. The present market value of that land would be well in excess of its value when it was zoned for agricultural use. I am not an agricultural specialist but it is my view that between £2,500 and £3,000 per acre is the value of agricultural land in Dublin. If the zoning of that land was changed we would be talking about a quantum leap in value to at least £20,000 or £30,000 per acre.

If the market value today is such that a person with political influence in Dublin county can tell a person, pointing to the evidence on the last ten agendas for meetings of Dublin County Council, that he has access to the majority group of the council and he is happy that a section 4 promoted by him would receive favourable attention with the result that the value of the land zoned for agricultural use would rise, what is the position? Am I correct in saying that the antecedent value of the land is the amount which the land if sold on the open market by a willing seller immediately prior to the relevant decision under Part IV of the Principal Act might have been expected to realise? My reading of the Schedule leads me to conclude that that is precisely what is meant. In that event I find that provision unacceptable because the market value as determined by external political, social or other considerations would be a value well in excess of what the community when they last decided to zone it believed it would be. The value of the land is enhanced not just by the particular political complexion of the county council but by the massive investment of public infrastructure, in this case the western link road.

If antecedent value means market value in the present circumstances I have to tell the Minister that I find that to be in conflict with my amendment. The Minister has not said if he will accept my amendment. He has indicated that it would pose difficulties and would lead to contradiction in some areas but he has not refused to accept it. A planning application granted under section 4 in respect of an area of rapid growth whose value was enhanced as a result of expensive capital infrastructure being provided by the State, and the European Community, may be appealed to An Bord Pleanála. If An Bord Pleanála refused permission, would the developer, the owner of the land, be able to file a claim for compensation against Dublin County Council using the valuation system set out in the schedule? Would that person be able to say, in accordance with the Schedule, that the antecedent value of the land for which planning permission was refused was not the agricultural land use value but its value as a site for a shopping centre located strategically off the national primary route system on the western side of Dublin city? Would that person be entitled to claim that instead of the value of that land being £3,000 per acre, its agricultural value, it was £23,000 per acre, its commercial value? Is that what antecedent value means in the circumstances?

Mr. Flynn

One aspect that we should bear in mind is that it was always possible for the authority to use the vehicle of the development levy clawback system, even where section 4 cases are applied. We should not lose sight of that. They have always had the capacity to deal with any clawback they wished to achieve by way of compensation for expenditures of money in the public arena. Existing use value is not necessarily equivalent to the current open market value.

The Deputy made a case earlier about a Dublin coalyard. If land is being under-utilised the existing use value would be less than the current open market value. With regard to the enhancement of land values by public works I should like to tell the Deputy that I tried to deal with that issue before. If local authority works enhance a proposed development the planning authority have always been empowered to levy the appropriate development contribution where planning permission is granted. Under Rule 3 (2) (c) the arbitrator is required to have regard to this likelihood and to take account of the effects on the open market value and this will also pull down the open market value. Why cannot the First Schedule as outlined in Rule 1 (a) and (b), accommodate the point made in two different ways by Deputy Gilmore and Deputy Quinn? I cannot see how we can in any way end up in a position where we would be worse off so long as the rules are applied as set out in the schedule.

Mr. Quinn

Do I understand from the Minister's reply to the specific example I gave that the value would be set by the development potential of the land? We are talking about a situation where An Bord Pleanála have refused planning permission for something that had previously been granted permission by the local authority, and where it involved, inter alia, a change in zoning, a material contravention of the development plan from agricultural to commercial. Can we say, for arguments sake, that the value of the land had increased tenfold per acre?

Mr. Flynn

Because of the decision given?

Mr. Quinn

Yes.

Mr. Flynn

From an original zoning, through material change, a decision was given because of the material change?

Mr. Quinn

Yes, and then it was subsequently refused planning permission.

Mr. Flynn

It was subsequently refused permission by An Bord Pleanála.

Mr. Quinn

It was subsequently refused on appeal and the decision of the local authority was not upheld. Are we not talking about the XJS case under another name where planning permission was granted, was refused on appeal by An Bord Pleanála and the developer lodged a claim for compensation with the local authority.

Mr. Flynn

Is the Deputy asking what value the land would have and at which point would the value be taken, whether it was the decision given in the primary application as distinct from the decision that might subsequently be taken by An Bord Pleanála on the same land? As I understand it, the antecedent value would have to take account of the potential of that land at that time.

Mr. Quinn

That is my point. My amendment was trying to lower the maximum ceiling against which any land valuation could be measured. Indeed, in his opening contribution "maximalist" was the word the Minister used.

Mr. Flynn

That was the tradition. I want to alter that as laid down and not to facilitate it.

Mr. Quinn

So do I, but I cannot see exactly how the Minister is doing it in the system. If he can show me specifically I will sit down and listen. Since I have not heard that may I pose a specific problem? I will give the Minister a concrete case and perhaps he will tell me how the new system of valuation would apply. I would be most interested to hear, having described the hypothetical case in west county Dublin, the historical case which has got this legislation on the floor of the House — the XJS case in Killiney where a decision was refused ultimately by An Bord Pleanála. When the arbitrator went to impose a valuation on that land for the developers who sought compensation — Deputy Gilmore has illustrated some of the details already and they are on the record of the House — they started off with the maximalist value, or a potential value, and then proceeded to reduce the real net value which would take the form of compensation by calculating the cost of betterment levies, the cost development levies, which a local authority would put on the site, and the real cost to the developer of development costs. He said that if they got this land and had to develop it, they would have had to spend so much money to have roads built through the rock and they would have had to pay local authority levies of a certain order. All these things taken together and subtracted from the sum of £2.3 million would have given a net figure of £150,000. That is what happened and that is what we are objecting to.

From my reading of this — and I am open to the observation that perhaps I am not reading it with the necessary professional clarity, which I do not purport to have as I am not a professional valuer — I do not see how antecedent value is basically any different from that current system to which we are opposed because it appears to be market value and not existing use value. I do not know if that point is sufficiently clearly made.

Mr. Shatter

May I add a point to what Deputy Quinn has said which may be of assistance to the Minister and it may help to clarify the issue the Deputy has raised. Rule 3 (1) of the Third Schedule — to which Deputy Gilmore also referred — states:

In assessing the possibilities, if any, for developing the land for the purposes of determining its antecedent value, regard shall be had only to such reasonable possibilities as, having regard to all material considerations, could be judged to have existed immediately prior to the relevant decision...

In the context of the query raised by Deputy Quinn which arises directly under paragraph 1, and perhaps interlinking it with paragraph 3 of the First Schedule, I wonder if the Minister might be able to shed some light on it.

Mr. Flynn

The kernel is in Rule 3. We are attempting to get over the difficulty raised by Deputy Quinn. Without Rule 3 this does not work. If it is read in conjunction with Rule 1 (a) and (b) one will get an indication of how we are trying to accommodate the minimalist view as distinct from the other. That is the whole thrust of this Schedule and that is the intention of the Minister in that regard. The wording of Rule 3 seeks what Deputy Shatter said.

Mr. Shatter

I have deliberately not dealt at great length with this issue and I very much welcome the change we have in the Schedule. I think the kernel of this matter is in Rule 3. Deputy Gilmore had a point when referring to Rule 3. He said the language is such that one cannot be sure that the problems Deputy Quinn has been teasing out are necessarily resolved. One cannot be sure that they are resolved either. On the assumption that we will ultimately adopt the new First Schedule which the Minister is proposing this afternoon, we will need to have a further look at Rule 3 and I would urge the Minister to have a further look at Rule 3 and, indeed to consult on Rule 3 to ensure that we get it right. I appreciate that Rule 3 is the kernel when dealing with the problem Deputy Quinn outlined. There is the problem of semantics with that which ultimately could end up in litigation and none of us will know until the Supreme Court pronounces on it exactly how it will apply. We may need to come back to Rule 3 in the First Schedule on Report Stage. I am saying that in order to be of assistance and in the hope of making progress today. I think that the intent is right in Rule 3 but we may not be fully achieving that intent. I am not sure there is a perfect wording that will enable us to achieve the intent and it may ultimately have to be left to the courts.

Mr. Flynn

Perhaps I was thrown off slightly. I felt that Deputy Quinn was trying to give a status to the political process that should not have any effect on this, and I did not want it to be seen in that way. I am quite satisfied that in any consultations the Deputy may have with the chartered surveyors or, indeed, with any other reputable firm of valuers or auctioneers they tell him that hypothetical political considerations in so far as the planning processes are concerned would not have any place in the professional valuation system, and should not. The property arbitrator has to make the assessment for the compensation and he would have to do it with professional valuation standards. Perhaps I got sidetracked by that and it was colouring my attitude. The whole thrust of the Schedule is encapsulated in Rule 3, if one can live with Rule 3. I respectfully suggest to Deputy Gilmore that to do what he suggested with it would be to dismantle the system of the minimalist approach.

Mr. Quinn

I have used a fair amount of floor time in relation to this matter. I was not deliberately trying to make a party political point in relation to section 4's and decisions. I have tried to put down an amendment to rule out the validity of planning permissions for the purposes of compensation where such planning permissions have been granted under section 4 and were a material contravention of the development plan. The amendment was listed on the Order Paper but it has been ruled out of order, understandably; I do not particularly like the decision but I can accept the reason it was made. I accept that Rule 3 is the gear box in terms of determining valuation and what Deputy Shatter has said is certainly true. This is a process of argument presented on both sides and the arbitrator is the judge. In assessing the possibilities of any further development land for the purposes of determining its antecedment value, regard shall be had only to such reasonable possibility as, having regard to all material considerations, could be judged to have existed immediately prior to a relevant decision under Part IV of the Act. If the reasonable possibility were a reality and a planning permission, albeit a section 4 granted material contravention planning permission, had been granted, then one is not even talking about possibilities but about something real. That is my problem. As my other amendment cannot be allowed, I was trying to get around that because this is where some of these abuses have occurred.

Mr. Flynn

It could be reality and would have to be taken account of by the arbitrator in the assessment. I think that is a fair reading of it.

Mr. Shatter

There is a problem with the concept of reasonable possibility.

Mr. Flynn

At this stage it could just be regarded as a bad decision taken by the planning authority in accordance with the 1963 Act and it would be such. The Deputy's reading is accurate.

Mr. Gilmore

I take the point about the importance of Rule 3 if one is approaching this problem from the point of view of the value concept. My amendment on Rules 3 and 4 was following on the earlier amendment that I had proposed in relation to the loss concept.

Let me come back to this question of the antecedent value and how it is to be assessed as the market value of the land prior to the decisions being made. Perhaps I could take up an analogy used by Deputy Quinn and explore it a little bit further. In the XJS case, when that land was originally sold to the developer who wanted to develop it and who made the claim subsequently nobody, particularly the vendor, believed that it had any potential for development. It subsequently turned out that it did have potential for development, notwithstanding decisions which were made by Dún Laoghaire Corporation, which refused the application in the first place, and subsequently by An Bord Pleanála who remarkably failed to state a non-compensatable reason in their reasons for refusing permission.

Let me explore the matter a little bit further. Perhaps the Minister could explain what is intended here in the light of a specific example. In part of my constituency work has now started on the construction of the Bray-Shankill by-pass. South of the current main Dublin-Bray road in the Rathmichael-Old Conna area which moves up towards the Dublin mountains, the land is zoned either high amenity or on the basis of limiting development to one house to the acre. In recent times the market value of the land in that area has been increasing quite substantially and this is due in large measure to the anticipation that some of that land may be re-zoned. There is a belief that because the new road is being constructed at least some of that land will be re-zoned and that the present zoning of one house to the acre will be loosened up and there may well be a zoning of ten houses to the acre on some of that land.

That belief will be confirmed by looking at the fact that in recent years there has been a substantial increase in the number of planning applications and applications for outline planning permission for the lands in that area. The antecedent value of the land in that area is now much greater, if it is calculated on the market value of the land, because of the anticipation that there will be a loosening up of the zoning density for that area. That view is also confirmed by a decision which was made to grant planning permission for a parcel of land which was associated with the acquisition of land for the by-pass and one of the conditions was that it would get planning permission for ten houses to the acre.

Let us take that as a practical example. Somebody there applies for planning permission and is refused; they believe they have a claim for compensation and if under the Bill the claim for compensation is allowable, how is the antecedent value to be calculated? It is quite clear, first, that the market value is much higher because of the anticipation of further development of the area, so that will increase it. Second, it will be pointed out that there is comparable land in the vicinity for which planning permission was granted for ten houses to the acre and therefore that increases the antecedent value of the land for them. Third, it would be pointed out that the developments which are taking place and the fact that there is to be a new motorway which will take people faster into the centre of the city increases the market value of the land. That has to be taken into account. Fourth, it would very probably be taken into account that there is a DART service servicing the area. There is a whole range of factors which will be taken into account in calculating the antecendent value so that the antecedent value in that case would be considerably greater than the Minister is saying and would be considerably greater than, for example, the level of development that the development plan for the area would currently allow.

I would agree with the concerns being raised by Deputy Quinn about this, that calculating the antecedent value on that basis could, in circumstances like that, lead to an inflated value being calculated for the land concerned. Arguably, were one to get that and there were to be a refusal afterwards and the value of the land reduced, one could actually widen the gap between the antecedent and the subsequent value and thereby increase the level of compensation that would actually be paid.

Mr. Flynn

The quick answer to that is that under the improved policy arrangement we are putting in place here, using the zoning mechanism we are talking about, there should be no reason that that should ever lead to a compensation claim. We are inclined to treat these hypothetical cases as if the original system was still in place. It is not. When this becomes law we are into a totally different range of policy events. I know we are talking about hypothetical cases, but I do not see any cases arising if the policy enunciated here is applied. The Deputy is talking about what happened back in the old days. The zoning provision should render no compensation payable in the circumstances of the hypothetical case the Deputy mentioned, except of course, if there were a down-zoning in the previous five years, but that is a particular circumstance. Apart from that it does not arise from now on. The arbitrator of course would have to make an assessment of all this but notional enhancement on the basis of future possibilities is hypothetical and I cannot see them influencing compensation cases. Such cases will not arise in future if the local authority are doing their job right. In talking about possible future claims, we must try to tear ourselves away from the old system that applied and consider the new arrangements under the Schedule and what happened previously in the area of non-compensation where there was only one circumstance. We are talking about one circumstance only in down-zoning.

Mr. Shatter

I think there will still be a problem with the wording of Rule 3, and I will refer to this on Report Stage. The instance which has been raised is based on an assumption that if you buy land which is zoned as amenity and you do not get permission to have it zoned as residential you will have to make a compensation claim.

Mr. Flynn

You cannot do that.

Mr. Shatter

The reality is that the new provision in the Bill provides that if zoning is the reason you have not got planning permission you are no longer in a position to make a compensation claim. Much of what was said a few moments ago in regard to zoning is correct.

With regard to the material contravention provision, I think Deputy Quinn was saying that a person may have reasonable possibility of getting a material contravention. Assuming you get a material contravention in a local authority——

Mr. Quinn

And you are subsequently refused.

Mr. Shatter

——and it is appealed to An Bord Pleanála, who give one reason for not granting a planning permission — for example, the zoning is agricultural or amenity — I do not understand, if we make all the amendments the Minister is proposing, where the compensation claim can then come from.

Mr. Flynn

It cannot.

Mr. Shatter

It cannot if we have got this provision right. If a local authority have, by a majority, voted that there is a material contravention, and this is overturned by An Bord Pleanála, the compensation claim cannot be triggered any more by virtue of the zoning simpliciter being used by An Bord Pleanála as the reason for not granting permission.

Mr. Flynn

Except in the case of down-zoning.

Mr. Shatter

I accept that, but I am talking about up-zoning in the context of amenity to residential, industrial or whatever. I appreciate what the Deputy said but I am not sure that the concern is missing that focus, that is, once it is not down-zoning a compensation claim cannot be triggered. Once the trigger is not released we do not really have a major problem with antecedent values.

Mr. Gilmore

We are dealing here with the method of calculating the level of compensation, irrespective of how the compensation arose in the first place. Deputy Shatter said we should not get too concerned about this because it is not going to arise.

Mr. Flynn

Only if we have got it right in this legislation. It will be a different matter if we get it wrong. We are satisfied we have it right.

Mr. Gilmore

The problem is that even under the old legislation the two largest claims awarded could have been avoided had An Bord Pleanála not given non-compensatable reasons.

Mr. Flynn

There is no argument against that.

Mr. Gilmore

We have to provide for that type of situation which may arise again.

Mr. Shatter

The reasons given by An Bord Pleanála in at least one, if not both, of those claims related to the zoning. As a result, the compensation claim was triggered because the other reasons——

Mr. Flynn

That cannot take place now.

Mr. Shatter

If the Minister has got it right that problem cannot arise now.

Mr. Gilmore

Nobody in his right mind in 1981 or 1982 would have believed that it would have been possible for somebody to lodge a planning application for the piece of ground on Roche's Hill in Killiney, which became the subject of the first application, and end up being paid compensation for it.

Mr. Flynn

That would not have happened if the administration had got it right at that time. It is because of that case we now have this new scenario which will not allow that to take place in the first instance; the triggering mechanism is not there.

Mr. Gilmore

The point I am making is that the decision which gave rise to the compensation claim in the XJS case and the decision by An Bord Pleanála which gave rise to the award in the Dublin County Council case were both remarkable. It is stretching belief to believe it was purely coincidental that on two separate occasions an omission of that kind could have been made by An Bord Pleanála. In addressing how compensation is going to be claimed we have to allow for the possibility that at some time in the future a claim will escape out of the net, however unlikely it may appear now, and we have to ensure that the rules which are laid down for calculating compensation are sufficiently tight.

The problem we have here is that compensation will be the antecedent value minus the subsequent value. A number of amendments have been put down to the Minister's proposal in this regard. My amendment — Deputy Shatter has proposed a similar amendment, albeit in a different form — proposes that the price of the land and public infrastructural works should be taken into account and that the antecedent value as a result of infrastructural works should not be increased. When one is looking at the antecedent value on the basis of the market value there are circumstances where, notwithstanding anything else which may be in the Bill about zoning and so on, the market value of the land concerned may be inflated. I gave an example of this. I do not think it is adequate to state that issues like infrastructural works can be dealt with by way of the development levy. We all know that the development levy a local authority may make in a planning application is very often the subject of an appeal to An Bord Pleanála by the developers.

Some aspects of this First Schedule are becoming clearer but there is still much in it which is not at all clear. I appreciate that we are beginning to batter the Bill to death a little bit——

Mr. Shatter

We will all need some compensation.

Mr. Gilmore

The Deputy will have the worst day of the lot because he will not get a break. I am not satisfied that the amended First Schedule which the Minister——

Mr. Flynn

I cannot satisfy the Deputy because it is his stated objective not to have compensation in any circumstances. I am fighting a losing battle to try to convince the Deputy that I have endeavoured to bring about a situation where compensation will not be paid in any circumstances except, to put it in a colloquialism, in one place where there will be deliberate down-zoning from residential, commercial, etc., to virtually sterilising the land. In such circumstances a person is, in justice, entitled to some compensation. What I am trying to ensure is that in that extraordinarily limited circumstance there would be a method to evaluate how much a person should get.

What the Deputy says runs contrary to his original argument that no compensation should be paid. I share his view that it should be a minimal amount and that is what we are trying to achieve in the Schedule. However, the Deputy will have to take that at face value. Of course this matter will be argued elsewhere but I am saying it is perfectly clear that when we remove the Deputy's thoughts on the original system and all the circumstances where one could seek compensation for many reasons, be they administrative omissions or otherwise, we will see that this will not be the case under the regime. Compensation may only be claimed in one very limited circumstance. That is what I am trying to achieve. The Deputy will have to take it in good faith that that is my intention and that that is all that may be achieved in that one circumstance where compensation may be claimed following downgrading.

Mr. Gilmore

This morning the question was raised whether there should be compensation, and I lost. I accept that that was the democratic decision and that we are now dealing——

Mr. Flynn

The Deputy should not try to circumvent the now.

Mr. Gilmore

It did not come as a tremendous shock to me. In anticipation of that outcome I tabled a considerable number of amendments to——

Mr. Flynn

To back up the loss.

Mr. Gilmore

——as the Minister himself said, minimise the amount of compensation that may be paid. I am very glad to hear that that is his intention. I am not sure if the question of the antecedent value has been answered. I wish to be reassured by the Minister on that point. He has reassured me that it is his intention to minimise the amount of compensation that may be paid but this will depend on there being controls in place on the way the antecedent value is calculated. It still seems that the method of calculation the antecedent value will be wide open to interpretation when all kinds of factors may be taken into account. Valuers, arbitrators and the courts may subsequently interpret these in a more generous fashion from the point of view of the applicant than we had intended. It is all very well to say that this matter is going to be argued in a different forum at some stage——

Mr. Flynn

I hope not.

Mr. Gilmore

We should try to ensure that this matter is not argued out and that what may be argued elsewhere is quite limited. We find ourselves in a difficult position in that there is a lack of clarity on the House's intentions. I know what I would like, which is that compensation should only be paid in cases where a loss has accrued. The Minister has implied that that is also his intention but that is not the way the Schedule reads to me. I am concerned that the antecedent value may in fact turn out to be an enormous sum which will then be demolished following a decision to refuse planning permission when we will be back into the business of large compensation claims. That is a scenario we should try to avoid.

Mr. Flynn

May I pose the Deputy a question? In talking about losses, is the Deputy referring to the amount of money a person may have paid for the land when he first acquired it as distinct from its present value?

Mr. Gilmore

I do not think one can do that. Obviously what he paid for the land 20 years ago would bear no relation to its present-day value.

Mr. Flynn

Which valuation is the Deputy referring to? Is it the current valuation or the value of the land when he first acquired it or some index-linked valuation?

Mr. Gilmore

I think the Minister has——

Mr. Flynn

It would colour my response to what the Deputy is saying.

Mr. Gilmore

——hit on the difference between us. The Minister's approach is to take the present value of the land whereas my approach is to take the loss which has accrued. Let us take the case of someone who inherits a parcel of land. No loss will accrue.

Mr. Flynn

What loss?

Mr. Gilmore

That is correct. Therefore no compensation should be paid. Unless a loss accrues no compensation should be paid. The question was raised this morning whether compensation should be paid where there is down-zoning of land. The Minister referred to this question himself. In fairness, in cases where a person bought a parcel of land when it was zoned "housing" but which was later rezoned "high amenity" a loss would accrue but there may well be cases where a loss will not accrue.

Mr. Flynn

What about the poor fellow who inherits a piece of ground and pays no money for it at all? The Deputy says he will not be at a loss but I do not accept that. That does not hold water.

Mr. Gilmore

Where is the loss and why would you compensate him?

Mr. Flynn

He inherits a piece of ground and suddenly you label that piece of ground worthless because he never paid over a sum of money for it. I do not accept that as reasonable.

Mr. Shatter

He may have paid inheritance tax.

Mr. Flynn

I agree and a loss would accrue as a result. We are talking about a hypothetical compensation claim which may transpire in a way I do not believe. The Deputy says no compensation should be payable as he would not have exchanged money at some stage. I do not accept that.

Mr. Gilmore

It might be useful if we reminded ourselves that what we are talking about is the payment of public money and are talking in a Chamber where it has been pointed out that people have to wait for two years for hospital operations and that there are classes with 40 school children——

An Ceann Comhairle

Let us not stray from the subject matter of the section and the amendments before us.

Mr. Gilmore

I am trying to make the point that we are talking here about the payment of taxpayers' money. If somebody has the good fortune to inherit property and then applies for planning permission but fails to get it no compensation should be paid as they have suffered no loss. Quite frankly, I do not see why the taxpayer should be asked to pay them compensation.

Mr. Flynn

I do not accept that. I do not accept that a piece of land which I inherited from my grandfather 50 years ago for which I never paid a thing should be deemed worthless whereas the land owned by the man who lives next door to me for which he paid a certain amount of money should be deemed as having the value he paid for it. That is not equity.

Mr. Quinn

May I add to that point? My concern centres on the professionals who will sit down with well-paid hired intellectual guns to look at the legislation when enacted to see if it contains any loopholes. If we look at the compensation cases we have been confronted with where the local authorities have been taken to the cleaners we will see that they have not been made by the ordinary citizen. Let me refer first, before going on to deal with the central theme of my own amendment, to the intervention made by Deputy Gilmore. It could happen — although I do not think this is his intent — that somebody inherits a piece of land which is subject to inheritance tax. While he may have got the land free, he may be subject to the public sector pay constraints, he may have an overdraft and may have to raise money to pay the inheritance tax. He is told and advised that the best way to pay the inheritance tax is to get planning permission on the land and to sell off part of it and use that money to pay the inheritance tax and hold the land himself. He would be at no real cash gain and would avoid a cash loss. If he is refused planning permission for a compensational reason, under the present legislation it seems totally inequitable to deny him compensation because not only would the inheritance not be a gift, it would be a liability and he would be rushing down to Teach Earlsfort — as it used to be — to offer them title because the land would not be of benefit, it would be a liability.

There is a danger in the fundamental logic Deputy Gilmore is applying. He is saying that the nature of ownership is specific to the person who owns it rather than to the property that is owned. As I understand it in planning legislation it has always been that a planning permission attaches to the property irrespective of the personality of the owner. For example, if somebody is pleading for special planning permission for a particular kind of development because of the circumstances of his family, say a wheelchair case, and they want to extend into the back garden because they need the ground floor accommodation for their concerns, the local authority, however reluctantly, would have to say that they could not grant that planning permission because they have to have regard to the nature of the property itself in abstract and in isolation from the nature of the individual ownership because the occupancy of ownership can change but the property, the piece of ground, is static. There is a danger in what Deputy Gilmore is saying.

However, without wishing to sound unnecessarily scholastic, I want to come back to Rule 3 of the Schedule. When you take the whole Bill together — we are taking a number of the amendments together — and consider the Second Schedule and Third Schedule, you have clearly identified the areas where planning permission or refusal of permission will not be grounds for compensation. I have no great problem with that. The Minister may want to come back on this on Report Stage. It is my concern that the people who will abuse this system if we do not get it 110 per cent right will be the professional developer-speculator. Because of the lists in the Second and Third Schedules, I do not think the problem of compensation will arise in those cases. There may be the odd accident——

Mr. Flynn

I do not think it can even happen by accident if we get it right.

Mr. Quinn

I want to come back to planning permission granted under section 4, which is a legally valid decision taken by the local authority, but subsequently overturned by An Bord Pleanála. The first decision was legally valid even though it was a material contravention of a development plan.

Mr. Flynn

Taken under section 4 that is a valid decision.

Mr. Quinn

It is a valid decision of a local authority.

Mr. Flynn

Yes.

Mr. Quinn

In trying to establish the antecedent value — we are not talking about hypothetical cases——

Mr. Flynn

Maybe I have given that wrongly.

Mr. Quinn

It is not a valid planning decision?

Mr. Flynn

It is a valid decision of the local authority but not a valid planning decision until has cleared the whole process of planning. That includes An Bord Pleanála, and maybe a subsequent court action.

Mr. Quinn

It was a decision.

Mr. Flynn

Yes.

Mr. Quinn

And it was overturned. An intention to grant planning permission, a notice to grant planning permission, is the phrase used. We are teasing this out. It is quite possible, given the complexity of this matter, that the answer is not encompassed in the four walls of this room, and I invite the Minister to explore it, but I am putting down a very serious marker. It seems that under Rule 3 of the First Schedule a well placed developer with an eye on the main chance using the political complexion of any local authority — I am not necessarily referring to the party political complexion because frequently you get cross-party voting on some section 4s, let me say, lest anybody think I am having a cheap jibe at some party in any local authority — seeing a possibility, could go down a particular route knowing he would be in for compensation at the end of the day. The suspicion most people have in relation to the XJS case is that it was never seriously intended to develop the land in the first instance but there was a possibility of getting a ball into the air that would go over the crossbar for the purposes of compensation. At that point the antecedent valuation system as proposed in Rule 3 of this Schedule would be based on the fact that the decision, albeit one subsequently overturned, established a ceiling value on that land.

Mr. Flynn

I do not believe it would. The Deputy is making a very interesting point. I do not accept that the decision is quantifiable as a procedure in the antecedent value mechanism until such time as it has cleared the whole planning process under the 1963 Act, but to satisfy the Deputy I will refer to this on Report Stage. I will take away the net question the Deputy is asking about that set of circumstances wherein somewhere during the planning process a notice of intention to grant a certain decision was conveyed. The Deputy is afraid that that might be taken as a value notion in the antecedent value that would influence the arbitrator, whereas my understanding is that that could not affect the arbitrator's understanding of the antecedent value until it had cleared the whole legal process. If it did I would have to be very concerned about putting a mechanism in place that would kill that. I will refer to this in my Report Stage contribution. I get the point.

An Ceann Comhairle

How does the amendment in the name of Deputy Quinn stand?

Mr. Quinn

We are trying to take a very complex series of measures together. I am not precisely sure how we are going to proceed. I presume the Minister is not accepting amendment No. 8?

Mr. Flynn

No.

Mr. Quinn

I have said I am not 100 per cent satisfied with the technical or legal wording. However, I am quite happy with the intent but I give notice that my intention is to polish and refine it, and perhaps reintroduce it on Report Stage, because it is open to a technical challenge, not a political challenge. Unless the Minister can satisfy me in relation to Rule 3 which relates to maximum hope development value on the one hand and existing use value on the other, which is really a rose by any other name, and his antecedent value is essentially the same thing, than I will be moving something along these lines. For the purposes of progress I will withdraw the amendment at this stage.

An Ceann Comhairle

We come now to amendment No. 9 in the name of the same Deputy.

Mr. Gilmore

On a point of order, we were dealing with a whole batch of amendments on calculation——

An Ceann Comhairle

Yes, we have dwelt on them for some time but the Deputy is quite in order if he wishes to advert to them again.

Mr. Gilmore

I do not wish to prolong the debate. Is your intention to proceed to take those amendments now?

An Ceann Comhairle

They are being discussed now. We shall come to them at the appropriate time.

Mr. Flynn

Did we not discuss them in tandem?

Mr. Quinn

Yes.

An Ceann Comhairle

We are discussing them together now and we have decisions on them as we meet them seriatim. We are dealing with amendments going up to Nos. 58 and 60.

Mr. Gilmore

Will we still have an opportunity to make observations on them? One of the difficulties was that while we were discussing the issue in general, points have been made about some of the individual amendments.

Mr. Flynn

We can take them seriatim and dispose of them.

Mr. Gilmore

That is what I am suggesting.

Mr. Flynn

When they have all been discussed in entirety we can then take them one by one.

An Ceann Comhairle

I would prefer if Deputies exhausted their views on the amendments now. Very many amendments were referred to and the intention was to discuss them together. The Deputies might do that. We will have decisions on them as we reach them seriatim. That is the procedure. If there are any other amendments to which the Deputy wishes to advert, please do so now. The Chair will be taking the view later that these amendments were discussed with amendment No. 8.

Mr. Gilmore

If I may take them in the order in which they are here in so far as they relate to the amendments I have proposed? Amendment No. 1 to amendment No. 14 dealt with the concept of actual loss as did amendment No. 1 to amendment No. 16, which is also in my name. There is also another amendment in my name which dealt with the concept of actual loss. I would like to return to this on Report Stage when I see what the Minister has taken into account.

An Ceann Comhairle

That is quite in order.

Mr. Gilmore

If it is intended to proceed on the basis of the reduction in value — as proposed in the Government amendment — then there are a number of things which have to be taken into account. There are a series of amendments to Government amendment No. 60 tabled by myself and Deputy Shatter and I am proposing that the price of land should be taken into account in amendment No. 3 to amendment No. 60. In amendment No. 4 to amendment No. 60 I am proposing that the question of the value of comparable land in the vicinity should not be taken into account because it may well inflate the antecedent value of the land. I have already spoken of the need to take account of infrastructural works.

Mr. Flynn

I will agree to take amendment No. 7.

Mr. Gilmore

I appreciate that, but I am not quite sure what effect that will have until I make a closer study of it.

Mr. Flynn

It is all right Deputy, the point has been taken.

Mr. Gilmore

Finally, I would like to comment on amendment No. 8 to amendment No. 60 which deals with financial loss and if I may, I will refer back to a point made by Deputy Quinn earlier. The whole approach I have been advocating is that if somebody incurred a loss, for example, a person who inherits land, pays inheritance tax on it and then cannot develop it and is at the loss of the tax, that is precisely the type of situation that would be allowable under the concept of actual loss.

I am seeking your guidance, a Cheann Comhairle. Taking the issue of whether the price paid for the land is going to be taken into account, I do not think the Minister responded to that point, and I made the point earlier that the most noted compensation circumstances which have arisen are cases where the price paid for the land was very low. In the XJS case it was £40,000 as against the £150,000 which was eventually paid out in compensation. In the Red Rock case it was £15,000 and the total value of undertakings given by Dublin County Council was £800,000. I would like clarification from the Minister as to what account is taken, if any, in determining the antecedent value, of the price originally paid for the land.

Mr. Flynn

I can see circumstances where the arbitrator would not take any note of that at all. If the land had been bought 30 or 40 years ago it would have no relevance to what he had to arbitrate on. I think the Deputy would be much more accurate in referring to the price paid for comparable land, and this might be the way the arbitrator would do it. I see it as being more appropriate, as I could see circumstances where he would not take account of the original price paid for land back in the last century.

Mr. Quinn

I think it might be apposite to quote the famous saying by either George Bernard Shaw or Oscar Wilde — I can never remember which — when he castigated those people who knew the price of everything and the value of nothing. The two things are actually quite different.

Mr. Flynn

Oscar Wilde.

Mr. Quinn

Yes, I thought it was Oscar Wilde, it has a slightly more leftist ring to it. If the value of a property is £100,000 but somebody had bought it at a steal for let us say £20,000, there is another mechanism on behalf of the State that will come into play, capital gains tax, and that will deal with that particular matter. I can understand in part what Deputy Gilmore is getting at — Dublin Corporation had to pay out the £800,000 compensation and not the Revenue Commissioners who stepped into the breach and compensated for the balance between the two figures — but it is still a problem for the local authority. The value would be what a willing buyer would offer to a willing seller in an unencumbered market notwithstanding what price the seller paid for the property and if he or she were subject to capital gains tax, that mechanism would come into play in parallel and separately.

An Ceann Comhairle

In order to tidy up the procedural aspect of the matter, Deputy Quinn was good enough to indicate earlier that he would withdraw amendment No. 8. However, may I suggest that the amendment stays for the time being until the discussions on all the amendments before us have been completed and then I will ask him to formally withdraw his amendment, if he so desires? Are Deputies satisfied with all aspects of the amendments before us?

Mr. Gilmore

I am very clear.

Amendment, by leave, withdrawn.

Mr. Quinn

I move amendment No. 9:

In page 5, line 20, to delete "six" and substitute "three".

This amendment proposes to give potential claimants for compensation three months rather than six months in which to make their claim. It is a deliberate attempt to raise the obstacle course. It is self-explanatory and does not need a great deal of elaboration on my part. If the Minister does not intend to accept it perhaps he can indicate in his reply how he arrived at the period of six months?

The intent of my amendment quite clearly is to say to claimants that they have a fixed period of time, 90 days, to make a claim for compensation. All it might mean is a letter from a solicitor or a properly authorised person simply stating that they are seeking compensation. One would not need a long, elaborate procedure to initiate the process and I think three months is more than sufficient time in most cases as I think you are only inviting compensation claims if you leave the door open for that length of time.

Mr. Flynn

The amendment would reduce the period for making compensation claims from six months to three months. I would like to point out that the six month period specified in section 5 already represents a stricter provision than that obtaining under the 1963 Act, and that Act allowed in all cases for six months or such longer period as the Circuit Court might allow if it appeared to the court that there were reasonable grounds for requiring a longer period and it would be just and reasonable to extend the period. The courts have not hesitated to strike down hard and fast time limits where in the case before them they found these in conflict with natural justice. The two-month time limit specified in section 82 of the 1963 Act has been impugned in that way. I am reluctant to move away from the six-month time limit and I would ask the Deputy to accept it.

Mr. Quinn

I am not accepting it but I am not pressing it.

Amendment, by leave, withdrawn.

Amendments Nos. 10 to 12, inclusive, not moved.

Section 5 agreed to.

SECTION 6.

An Leas-Cheann Comhairle

Amendment No. 13 in the name of Deputy Shatter. Amendment No. 75 is consequential and it is proposed, with the permission of the House, to take amendments Nos. 13 and 75 together for discussion. Agreed.

Mr. Shatter

I move amendment No. 13:

In page 5, before section 6, to insert the following new section:

"6.—(1) No person shall be entitled to make a claim for compensation who has failed and is still failing—

(a) to fully comply with the conditions of another or previous planning permission,

(b) to provide security for such completion,

(c) to fully comply with a notice served under section 35 of the Principal Act, or

(d) to fully comply with any court order obtained against him arising from a failure to comply with the conditions of another or previous planning permission.

(2) For the purpose of this section a person shall include a company which is a subsidiary of or an associate company of any such person.

(3) For the purpose of this section each Local Authority shall prepare and maintain a register in respect of all persons who have failed—

(i) to comply with the conditions of another or previous planning permission in connection with the completion of a housing estate,

(ii) to provide security for such completion,

(iii) to comply with a notice served under section 35 of the Principal Act, or

(iv) to comply with any court order obtained against him by a Local Authority on foot of a planning permission.

(4) A register maintained under this section shall be made available for inspection free of charge by members of the public at all reasonable times.

(5) Upon a person named in the register for failing to comply with planning conditions imposed fully complying with such conditions, such person's name shall be removed from the register in so far as it relates to the particular development in respect of which planning conditions have been complied with.

Amendment No. 75 to the Third Schedule states:

In page 19, between lines 11 and 12, to insert the following paragraph:

"10. The applicant or any person having an interest in the land to which the application relates or any company which is a subsidiary of or is associated with the applicant is entered in the register maintained by any Local Authority for the purposes of section 6 of this Act.".

The Third Schedule relates to the reasons for refusal of planning permission which exclude compensation.

On Second Stage I raised a major problem which was clearly illustrated in the Grange Developments case. That is the problem which confronts a local authority when a development company have already been granted planning permissions to build residential estates and that company, or its subsidiary or associated companies, have failed to comply with the planning conditions imposed by the local authority. Dublin County Council have had this experience with the Brennan and McGowan group of companies. Major housing developments in the Tallaght area were undertaken and people bought houses on the assumption that basic landscaping would be carried out, roads would be completed and the basic essential infrastructure necessary to make life reasonable in a housing estate would be put in place. There is the problem of a development company happily taking the cost of a house from a purchaser for the building company and the company failing then to complete the estate. The local authority are forced to serve "latest date" notices and ultimately to bring proceedings under the 1976 Local Government (Planning and Development) Act in the High Court to force the development company to complete the estate. The Brennan and McGowan group were not the only group with whom Dublin County Council had difficulty but a plethora of court cases were brought to force compliance with planning conditions. If a local authority are dealing with a building company who have a very poor or bad record of completing estates and if while they are taking that company to court to complete an estate the company seek planning permission from the authority to build another estate, the local authority cannot refuse to grant a planning permission saying they do not believe they will implement the conditions attached to that permission since they are already taking the building company to court to complete two or three other estates outstanding within that local authority area or because they know another local authority are already taking them to court. Because of the various other companies associated with Grange Developments, we had the ludicrous situation where Dublin County Council were forced to pay out £2 million in compensation to a company who belonged to the most litigated group of companies in the entire country for failing to comply with planning permissions and conditions.

We should have a provision within our planning legislation which would allow local authorities to refuse to grant planning permission in circumstances where a company have a clear record of failing to complete estates properly. We have a duty to the general public and to the consumer not to allow local authorities to be put in a position where they have to grant permission to development companies whom they know will not comply with the conditions imposed. It must also be said that there are many excellent companies who do not create these problems but we need to restrain the poor builders, who do not properly comply with planning conditions, from getting new permissions to build new estates until they complete properly developments for which they have already been given permission. I am somewhat constrained in dealing with this issue under this Bill, which deals generally with planning compensation.

The amendment I have tabled is designed to ensure that where a development company have failed to complete an estate properly and as a result court proceedings have had to be brought against that company or a "latest date" notice has been served, the local authority can refuse to grant planning permission and will not be liable for compensation awards. In order to make this effective I have provided a subsection which would require local authorities to maintain a register which would list the names of those development companies against whom they are currently proceeding. The general public would have access to such a register. Presumably, as a matter of practice, the cross-checking mechanism could be put in place betwixt and between the local authorities.

I suspect that the Minister may say to me: this amendment is not correctly drafted. I suspect he may also say to me that, if I want to achieve the general purpose I have just outlined, a somewhat different and more substantial approach would be required. Because of the problems being experienced in urban areas throughout the length and breadth of the country I felt we should try and use this Bill as a vehicle to raise this problem at this stage. If the Minister feels he cannot take this amendment on board I would encourage him to come back to us on Report Stage and tackle this problem. I am very conscious that for another two or three years we will probably not be afforded another opportunity to introduce another planning Bill. We have now the problem of the non-completion of housing estates, with developers responsible for failing to complete them at the same time seeking permission to build further housing estates. This is a problem being experienced in many urban areas.

Had I wanted to deal with all aspects of this problem there are some additional amendments I could have tabled which probably would have been ruled out of order on the basis that they went beyond the scope of the provisions of this Bill. I am anxious that we confront this problem. As a member of Dublin County Council I have seen this problem very much at the coalface over a period of ten years vis-à-vis a variety of different building companies. I know that a great deal of time and resources of Dublin County Council, a great deal of money has been spent in bringing cowboy developers through the courts to force them to comply with planning permissions. There must be a way in which we can tackle this problem through legislative process which will allow local authorities deal with it in a more efficient and rational way. It makes no sense that a developer with a bad building record, in completing housing estates, at the same time as he is seeking permission for a new housing development, is in litigation with a local authority for failure to comply with previous planning permissions and conditions. It is a very foolish system which allows new planning permissions to be granted to that developer for new housing estates. It is a system which undermines the credibility of the planning process. It is a system which provides no protection for the consumer, a person going out wanting to buy a house, in particular those most vulnerable, those in what I regard as the less expensive sector of the housing market, young married couples buying their first house who often find themselves going into housing estates poorly finished — when dealing with a developer of this nature — who do not themselves have the financial resources to take the developer to court and who, if the local authority were allowed to refuse planning permissions in such circumstances, would be given a great deal more protection within the housing market than they have at present, in that there would be a great deal more certainty that when one buys a house in a new estate that estate is likely to be completed properly.

I have tabled this amendment in the context of the compensation provisions obtaining. In responding I hope the Minister will be able to address this issue in the broad manner in which I have brought it to his attention.

Mr. Flynn

Amendments Nos. 13 and 75 seem to relate as much to the general consideration of planning enforcement as to planning compensation. They provide that planning permission may be refused, without compensation, for the reason that the person involved has been entered on a penal register by the planning authority. Persons would be entered on this register when they have breached certain planning requirements, particularly those relating to the completion of housing estates. The establishment of a penal register of this kind by merely an administrative authority has obvious implications for natural justice, particularly in the area of personal rights.

As the amendment stands, a person contravening certain planning requirements — over and above any penalties imposed by the courts — would have to suffer the stigma of entry in a penal register in addition to being debarred from access to planning compensation which would remain accesible to others.

Second, the framework for planning decisions laid down under the provisions of section 26 of the 1963 Act would have to be widened to allow planning authorities to take account of the character of applicants and their previous relationship with the planning system. At present planning authorities and An Bord Pleanála are restricted, when dealing with planning applications, to considering the proper planning and development on the area of the authority, including the preservation and improvement of amenities thereof — that is in accordance with section 26 (1) of the 1963 Act.

Planning considerations are regarded in law as considerations relating to the character of the use of the land. Clearly the amendment would involve planning authorities in exceeding this accepted planning perspective.

Third, the amendment, on its own terms, would be relatively ineffective in that it makes loose provision only for the possible ramifications of company circumstances. In a sense this whole proposal is premature until the question of connected persons, for the purposes of the Companies Act, is dealt with in the context of the Bill now in Special Committee. Planning is by no means the only area in which persons who have contravened the law may relaunch their fortunes under the identity of a new company. It would be unrealistic to expect planning law to develop advanced counter measures in relation to this ahead of company and taxation law.

The Deputy broadened his argument away from the simple compensation issue with which this Bill purports to deal. He would seek to restrict a developer from obtaining planning permission for reasons of non-compliance with previous granted applications and the schedule attached thereto.

That is really for another day. I would respectfully suggest to the Deputy — to put it in a colloquialism — I am not really interested in perfecting a sin bin register at this time in so far as developers are concerned. I do recognise the difficulties that have arisen in many planning authority jurisdictions concerning unfinished estates but it is for another day. I recognise the difficulty which will have to be attended to but I do not think this Bill is the appropriate vehicle. I would ask the Deputy to accept that.

Mr. Gilmore

I should like to support Deputy Shatter's amendment. The Minister is right in one respect — the question of dealing with developers who fail to finish off housing estates is something that must be dealt with in a comprehensive way. As I understand it, what Deputy Shatter is attempting to get at in this amendment is that, at the very least, a developer, or a company which is a subsidiary or associated company of a developer, who has failed to complete a housing estate would not benefit from planning compensation. That is a very reasonable proposition.

I understand very clearly what motivated Deputy Shatter into tabling this amendment. I recall as he does — we are both members of Dublin County Council — the scandal of Dublin County Council having to pay £2 million planning compensation to a developer whose associated companies had left estates all over County Dublin uncompleted, who had taken money from housebuyers under one set of conditions; in other words, that the estate would look as it was supposed to look on the brochure when they were selling houses on the estate, but which left them without roads having been completed, in some cases without essential services, landscaping, the development of open spaces, all of the normal amenities one expects to be provided in a housing estate. All of these things were left uncompleted in many housing estates. Then Dublin County Council must fork out £2 million to the same people for refusal of planning permission in another case. The remarkable irony is that the money handed out was money which could have been used by the same local authority to undo the damage these developers caused in the first place. It is an obscenity to have money being paid out in that way where the developer has not completed the estates concerned. The Minister offered three reasons he cannot accept the amendment. The Minister said it is against the principle of natural justice that developers who do not complete estates would be entered on a register and suggested that it is almost some kind of arbitrary decision by a local authority administration. Of course, it does not work like that in practice. As the Minister knows, the conditions on which the developer should complete the estate would be clearly set out in the planning permission. A local authority will in the normal course of events issue a list of works to the developer which have to be completed by a certain date. Notices will be served on the developer concerned. There is a lengthy procedure which local authorities go through month after month, serving notices, chasing developers, entering into discussions with them and trying to cajole them before they get to the stage of taking legal action. The same would apply before they got to the stage of entering a developer on the register.

One of the horrific problems in the case where a developer does not complete an estate is that very often by the time the local authority get around to taking him to court, he is gone and the company is liquidated. I had a case recently where in a small development of eight houses a man had a heart attack and the ambulance spent 20 minutes going up and down the road trying to find the house, because the developer had not put a name plate on the estate. The local authority concerned for three years have been trying to take that developer to court to get him to complete a whole range of works in that estate.

I am sure that problems between associated companies are being considered under the Companies Bill, but the principle that Deputy Shatter has proposed in this amendment is sound. I agree that the question of the completion of estates should be addressed soon in this House by new legislation but as a very bottom line we should provide in this Bill to ensure that people who do not complete estates do not get compensation when they are refused planning permission for some other development.

Mr. Browne

(Carlow-Kilkenny): Like Deputy Gilmore I support this amendment. I was surprised that the Minister took the soft line he seemed to be taking in relation to people who fail to finish estates.

Mr. Flynn

The legislation has nothing to do with unfinished estates.

Mr. Quinn

It has to do with compensation.

Mr. Flynn

It has nothing to do with unfinished estates. It has to do with compensation.

Mr. Browne

(Carlow-Kilkenny): It would at least be a stick. If a developer knows he cannot claim compensation if he does not finish a previous estate, it might bring him to his senses. All of us who served on councils or corporations know there is nothing more frustrating than having people complain about the absence of lights, footpaths and so on, expecting the county council to provide the facilities and, of course, the council will not take over until the builder has finished what he is supposed to do. This leads to all kinds of difficulties for the residents. Builders who flout the regulations and leave people who have paid a lot of money for houses literally and metaphorically in the dark should be deterred by at least refusing compensation to them. I take the Minister's point that this Bill does not directly concern unfinished estates but I hope he will introduce an amendment in a section of some other Bill to make sure rogue developers do not get away scot free.

Mr. Quinn

In support of Deputy Shatter's amendment I would invite the Minister to consider some amendments which he might care to introduce on Report Stage. Would it satisfy the Minister if a local authority, having tried to get a developer to complete an estate, were to register the refusal with the District Court and have the court serve notice on the developer that it was the intention of the local authority to go to court and get an affirmation of the court that certain conditions of the planning permission had not been complied with? In this way that would no longer be an arbitrary decision of the administration but would be a decision of the court. Such a formula might deal with the Minister's objection in relation to the question of natural justice. The court could also determine the value of the completion of the planning conditions and allow the local authority to subtract from any compensation awarded to that developer, the money needed to complete the planning conditions. I am assuming that the Companies Bill will deal with all the problems of directors and associated directors, for the purposes of this discussion.

The Minister has not rejected the principle of what Deputy Shatter is saying and he has said in response to Deputy Browne that this Bill does not deal with the question of unfinished estates. It deals, however, with the question of compensation and both Deputies Shatter and Gilmore from their experience in Dublin County Council have referred specifically to the apparent contradictory nonsense of a local authority being forced to pay money by way of compensation to a developer who in another guise has failed to fulfil conditions of a planning permission elsewhere. The Minister may have all sorts of reasons for his attitude but I am sure he would want to be the last person to try to explain in a by-election in West County Dublin that may or may not arise in the near future, that the reason he is standing in the middle of an unfinished estate and the reason the developer of that estate is getting compensation somewhere else in County Dublin from the same county council, has to do with the technicalities. I would love to hear the Minister's well known capabilities in terms of verbal articulation explaining to an irate citizen why, when he had the opportunity to do something about this, the Minister spectacularly failed to do it.

An Leas-Cheann Comhairle

I call Deputy Rabbitte and he will refrain from making a political speech.

Mr. Rabbitte

Not at all, a Leas-Cheann Comhairle. I was tempted——

Mr. Quinn

I am sure Deputy Rabbitte would leave the trees where they were, he would never take them back.

Mr. Rabbitte

I was tempted earlier today to contribute to this debate——

Mr. Flynn

We were hoping the Deputy would not.

Mr. Rabbitte

——I felt it might have been unfair to the Minister——

Mr. Flynn

As a fellow Mayoman I know the Deputy would never leave me in the lurch even though Deputy Gilmore has been having a difficult time.

Mr. Rabbitte

I thought Deputy Gilmore did admirably against the combined forces of the largest Opposition party and the Minister. It is ironic, therefore, that I support the thrust of Deputy Shatter's amendment. I represent the constituency of South-West Dublin and it is extraordinary that West County Dublin has seen the city developing westwards over the past 20 years. A small number of developers have been involved in most of that building and, no matter how badly or inadequately they completed any given development, they were still given additional tenders by the local authority or additional planning permission by the planning authority.

There were several references today to the Grange Development case where the partners, Brennan and McGowan, did exceptionally well without building a single house. They developed a number of estates in my constituency, including 1,590 houses at Kilnamanagh. Thirteen years later the Kilnamanagh Residents' Association, the community and public representatives in the area are still trying to have that estate completed. The very same councillors, who voted to observe the law of the land after the High Court action to give those people £1.9 million in compensation, cannot provide basic footpaths, name-plates, adequate lighting and other facilities. That is only one example. I do not know to what area Deputy Gilmore is referring — he is extremely fortunate if there is only one such enclave of eight houses in his constituency. However, I do not think that is what he meant when he referred to Dún Laoghaire. There are several vast developments in West County Dublin where even the most basic infrastructure work required by the terms of the planning application has not been completed. As a result families have been dislocated from the inner city and other areas; they live in west Dublin and have to cross fields without footpaths. There are dirt tracks for roads, inadequate public lighting and no footpaths. This problem should be tackled without raising the hackles of any Deputy about the more fundamental question with which this Bill is concerned. I am very glad to join my colleague, Deputy Gilmore, in supporting Deputy Shatter's amendment.

Mr. Shatter

I wish to thank the other Deputies who contributed to this debate. The Minister is right because I cannot, in the context of this Bill, tackle this issue in full. I wish I could have dealt with it more fully but if I had tabled additional amendments to deal with other aspects of the Bill they would have been ruled out of order, as was the case in one of Deputy Quinn's later amendments.

I rarely use the word but I want to mention the scandal of a company being given £2 million when its associate company had been responsible for flagrantly breaching planning permission and conditions in major estates built in County Dublin. Deputy Rabbitte gave illustrations in his own constituency which has been most seriously affected. He mentioned Kilnamanagh and the Aylesbury estate is another example.

I do not share the Minister's reservations about a planning sin bin. The general public are entitled to a sin bin so that when they see an elaborate advertisement in the newspaper about a wonderful development which a company intend to establish in an area, listing the great landscaping and recreational facilities which will be provided, they will know if the advertisement is credible and will have something to test it against. If the local authorities have a register which lists unreliable building companies, those which made promises in the past, reneged on them and are now the subject of court proceedings by the local authorities, the young married couple investing money which very often they can ill afford will have something by which to judge the advertisement. They will know the reliable building companies.

The Minister is right in relation to the problem of associated companies popping up and developers who seem to form a new company for every development they undertake. It is a problem and that is why the amendment refers to not simply subsidiary companies but to the concept of associated companies. I will not pretend that this amendment is a perfect solution to the problem but it is a start in tackling it. I have been a member of this House for about nine years and we have never had legislation before this House which was a vehicle allowing us to raise this issue. Even if we provide only a partial solution to the problem by taking this amendment on board, it is a step in the right direction.

The Minister said that this would be a penal register. It should be a penal register because if young couples are asked to lay out £30,000, £35,000 or £40,000 and raise a mortgage of £30,000 to 35,000 for its purchase — which they will be paying back for 20 to 25 years — they are entitled to know that in addition to the house they will have the basic facilities of roads, footpaths, lighting and open space areas properly landscaped in the estate. That is part of what they are paying for.

Mr. Quinn

It is part of what they hoped they would get.

Mr. Shatter

If there is a penal register which tells them that they cannot rely on a particular company to provide what they promised, so be it. The very presence of such a register will resolve part of this problem because building companies will not want to be on the register. They will realise that such a register will diminish the possibility of them selling houses on another estate. The register will go further, it will give local authorities discretion to refuse to grant planning permission in such circumstances without a compensation claim arising. I do not have worries or reservations about the register.

I wish to draw the Minister's attention to an aspect of the amendment, which is very simple. If you do not want to be on the register as sinning against the planning code you can get yourself off it. Subsection (5) provides that when you comply with planning conditions and permission you can have your name taken off the register. It is not a question of a development company, even by accident, failing to comply with some planning condition and finding themselves arbitrarily on the register. It will not happen that way because, in practice, the local authorities go through a series of procedures to get development companies to comply with planning conditions. A person on the register has a simple remedy if he or she wants to obtain a new planning permission or ensure before they are put into the planning sin-bin, if they are building somewhere else that being on the register will not prevent people purchasing houses built in another estate. All such a person has to do is comply with the original planning conditions. If that is done he or she will be removed from the register. They simply have to comply with an undertaking given to the local authority pursuant to the development that person got involved in and which resulted in many people paying large sums of money for houses.

Subsection (5) provides a method for people to get off the register. The Minister said that generally speaking the criteria local authorities must have regard to in determining whether a planning application should be granted or not are the planning and development criteria. He said that a local authority should not make a judgment on the character of an applicant. He also raised the issue of a company. This is not so much about the general character of the applicant. Nobody will be interested whether the building company has directors who are interested in horse racing, or who gamble, play cards, go on long summer holidays, smoke, support a football team or a political party. That is not what this is about. This is about allowing a local authority to take planning considerations into account.

When a planning application is made to a local authority, that authority, in determining whether to grant planning permission will be allowed, look at the planning record of the applicant. It is not the character but the planning record of the applicant. The local authority will be able to say that if they grant the planning permission, subject to conditions, from previous developments the company carried out are they in a position to prima facie assume that the company will do their best to carry out the development properly and fulfil the conditions imposed? If the local authority can see from their records that in the housing estates built by the company there have been no problems, or there have been minor problems which were resolved, the matter would end there and permission would be granted.

However, if their records show that the company, or an associate, was before the High Court in regard to four different planning problems in estates in Dublin, Dún Laoghaire, or elsewhere, the local authority will be able to say that if they refuse planning permission they will not be subject to compensation. The local authority should be able to say — I cannot put this into the Bill in the way I would like — that they would not grant any permission. I agree with the Minister that to tackle the problem properly there is a need for additional legislation, but this is a step towards tackling the problem.

I have used the word "person" in the context of this provision. Under the relevant statutory provisions a "person" is both an individual and a company. I use the word "person" because it covers both the company and an individual. My amendment goes on to talk about subsidiary and associate companies. I invite the Minister to accept my amendment so that we will be tackling the issue of compensation. Will the Minister say when he intends to bring legislation before the House to deal with the other aspects of the problem? Since I was first elected to Dublin County Council in 1979, that problem has been highlighted on a regular basis but there has not been any Government action. We have never had legislation to provide protection for the consumer and to allow local authorities refuse planning permission to development companies whose records are abysmal and who should not be given new permissions until they complete estates that are long since outstanding for completion.

I invite the Minister to accept my amendment. If the Minister wants to give it further thought with a view to taking it on board in principle, if he says he will bring forward his own amendment to deal with the technicalities he feels should be addressed, I will be happy to withdraw the amendment. In doing so, I will be expecting the Minister to introduce his amendment on Report Stage. However, if the Minister tells me that this is not an issue, even in the context of compensation, that he will address and that he will not give it consideration between now and Report Stage, I will have to tell him that I will be formally putting the amendment.

Mr. Flynn

Most of the contributions on this point were not relevant to the provisions of the Bill. I would like to feel that collectively we condemn the rogue developers who deliberately contrive to escape their responsibilities by not finishing developments in accordance with the schedule of conditions they receive attached to their planning permissions. I support that point of view. What we are talking about is compensation legislation. Under the new policy we are not contemplating any compensation claims. Since this morning we have been throwing our minds back to the position that existed prior to these provisions coming before the House. I am not contemplating any compensation claims and, consequently, the matter is irrelevant. However, it does not take away from the good thought that we should collectively condemn what has become a feature of the construction landscape in certain parts of the country.

It is important to bear in mind that this problem is not confined to the Dublin area although all the contributions referred to unfinished estates in Dublin city and county. This is a problem in the provinces and Deputy Browne was correct in saying that. We thought we had all this dealt with a few years ago when £3 million was put up by the Government to settle this matter. Unfortunately, the necessary guidelines or legislation were not put in place at that time to cover any future difficulties that might arise.

I am not suggesting that the local authorities are negligent in the way they do their business but they might take a leaf out of the notebooks of other small authorities on how they deal with this matter. In one case that I am aware of, the local authority succeeded. In giving the planning permission for the development of an estate the local authority took a lien on part of the property, or had a bond put in place, or insisted on money being put up front by the developer. The developers the Deputies have referred to are well-heeled, whether they got their money through the ordinary process of commercial activity in the building or selling of houses or through the compensatory process that existed heretofore.

Mrs. Owen

We did get a bond but it was not enough.

Mr. Flynn

Local authorities have the facility under the existing guidelines which I insisted on a couple of years ago and which applied admirably under the 1963 Act, to enable them to seek this arrangement in advance of the granting of planning permission so that they have the lien subsequently if a developer does not act in accordance with the schedule of conditions attached to the planning permission. That has worked successfully for a number of smaller authorities and it may be that some of the larger players should do something similar. I do not want to be put off-side on this. It appears that the view is that by my inactivity, or by not accepting Deputy Shatter's amendment, I am trying to protect the rogue developer who deliberately sets out not to commit himself properly to the satisfactory completion of the works in the schedule attached to his planning permission. Such a person needs to be dealt with. We should warn young buyers of houses that some contractors do not complete their developments. Certainly, they are reminded of that fact in reports of court actions.

Mr. Quinn

Is the Minister suggesting that we should say something like "Mayo men are dangerous to your health"?

Mr. Flynn

Certain names have been bandied about here all day regarding developers and developments. I presume that part of the reason was to have certain people labelled on the record as not being up to the mark. I am not into that business but I have noticed a certin drift all day of labelling certain developers for what particular reason I cannot imagine.

Mr. Shatter

Only because of their development record in Dublin.

Mr. Flynn

I agree that some of the best builders in the city came from the country.

Mrs. Owen

But some of the worst also came from the country.

Mr. Flynn

Some from my own part of the country have done very well here in the city. I acknowledge the serious concern that has been expressed by some Deputies that the enforcement they advocate should be made more effective. I would like to assure the House that it is a matter I would like to be involved with. I cannot give a categoric assurance that this will be legislation in the immediate future. I have many items of legislation in the Department at present which I am anxious to introduce. This Bill was one of them and there are a few others outstanding and there are some new items of legislation attached to the environmental area. Consequently there is no categorical assurance that we will suddenly arrive with this legislation. In the meantime we could get a better and more effective administration of the existing planning provisions as outlined in the 1963 Act, if the legislation to deal with this matter is left to a later stage, with the promise that it will be put together as quickly as we can manage. I ask Deputies to accept that the matter cannot be meaningfully dealt with under this Bill. I know that Deputy Shatter passionately agrees with the position he has put forward and would like to see it taken on board at this time. I recognise his anxiety in the matter and concede the point to him that there is a need to do something effective whether it is through the administrative structures already in existence or through new legislation. I accept all of that but I do not wish him, if possible, to pursue the matter in the amendment in this legislation because it seems not to be compatible with it in the way it was framed.

Mr. Shatter

Perhaps the Minister would clarify a matter. Can the Minister assume a scenario of development company that applies for planning permission to build 250 houses on an area of land, zoned residential, in County Dublin. All the services are in place, there is no problem about roads or about sewer capacity; the only problem is they want planning permission. They seek planning permission. The local authority feel they would normally have to give it because everything is in place and there is no particular reason that they should not give it because the zoning is right. They will have to impose conditions: the conditions will require road building, landscaping, etc. and the local authority say: "We have a problem. We have imposed three similar conditions elsewhere on this company and we have them in court. The only basis on which we can refuse a permission is because we do not believe they will carry out the development". Let us presume that the Bill becomes law tonight — which will not be the case — what is the position if the local authority say: "We will refuse this permission because you have a lousy record and we will not give you permission until such time as you complete the other three estates for which proceedings are being initiated in the High Court. The position, as I understand it, under this Bill is that the local authority will not be able to do that but if they refuse the permission, without having any reason beyond that stated, they will be liable to pay compensation.

Mr. Flynn

The Deputy's argument is not watertight. The permission attaches to the land not to the person seeking it. That being the case I could put to you the scenario that I could circumvent all this by asking Deputy Owen or her sister to make application. She gets the planning permission in all good faith and gives it to her neighbour, her partner or whoever. I do not want that to happen. Because of that I will seek, if I can, to tighten the structures under the 1963 Act. I will give the undertaking that it is an agreed item for legislation as soon as possible.

Mrs. Owen

We have so much experience of this, unfortunately, in County Dublin and, with respect, I do not think there is any other county that has housing estates of the same size built in their own county with the result that a developer might start an estate, and as has happened over the last ten years, because of the rise and fall of values, etc. they move off and seek planning permission elsewhere not because they do not want to finish the housing estates — they would if they could — but they feel more money is to be made by moving to a more desirable area to build. The existing structures give the local authorities no power whatsoever to blacklist these developers.

Mr. Flynn

There is a way around that.

Mrs. Owen

We have many conditions that could be put into planning permissions. At our council meeting on Monday last the manager told Dublin county councillors that, albeit that there is a condition in every planning permission that levies have to be paid — bonds have to be entered into — and an amount of money must be paid before commencement of work on the site, he cannot implement that provision because if he does no development will take place.

Mr. Flynn

I will tell him how to do it.

Mrs. Owen

The councillors who were at that meeting will bear me out on this point. He said if we wanted to force a developer to pay the levy before he did his work he would have to get a motion of the council to allow him to put that in because otherwise the whole procedure would be null and void and he would not be able to have it implemented. The Minister said he would advise young couples when they go to buy a house. Not many go to the trouble or even know how to find out exactly what is happening in the locality when they go to buy a house. The main reason they choose a house is that it is the house they can afford and it is the one for which they can obtain a loan. There is no way in which they are privy to information about the record of that builder without getting into their car or into a bus and literally driving around and asking who built that estate, and whether it is properly finished. The Minister could not suggest that young couples should do that. This amendment would allow a young couple who have, say, £35,000 to spend on a house to make a choice between buying that £35,000 house because that builder has a good record or that £35,000 house and find that that builder has a lousy record. I do not think the Minister is being realistic in saying that couples should make themselves aware of the builder's record. If I walk into the planning department and ask if builder A is good or if he has left estates unfinished I would be told at the counter to get lost. There is no way the planning department could give that information.

Mr. Flynn

There are three things. I will not prolong the argument. I do not accept the point of view that young couples do not drive around. They go around to various estates to see what the value is, the design, the landscaping, etc.

Mrs. Owen

They are new houses.

Mr. Flynn

I am not going to press the issue home but they do shop around.

Mr. Quinn

They are not asking the relevant questions.

Mr. Flynn

Maybe not. The other point is that it would require a decision or a resolution of a local authority for a condition to be in place. That is not a great deal to ask the elected representatives who do most of the baying about this at their meetings. One will hear about unfinished estates at every council meeting. It is not much to ask the county manager to put up a resolution or a motion to include a certain item that would make it more difficult for the rogue developer to get away with it.

Mrs. Owen

The Minister is missing the point.

Mr. Shatter

The point is——

Mr. Flynn

Allow me to give the House an instance of how it has been got over in another locality with a far-seeing local authority. Planning permission is given for the development of an estate but it is given on a phased basis on, say, the first 40 houses. The services, the lighting, footpaths and roads must be completed to the satisfaction of the inspecting officer before the next phase is allowed to proceed.

Mrs. Owen

It is, if it always works that way.

Mr. Flynn

I am not offering these as solutions. I am just saying that certain administrative things have been put in place in other authorities that have worked. I know there are enormous estates but I would suggest that it might be much easier to apply some of these arrangements on a much larger estate than it would be on a 100 house estate like the ones I am referring to. Apart altogether from that, I am not slipping away from it. I accept what has been suggested by Deputy Shatter, that we need to address this, and it will be addressed.

Mr. Quinn

In the context of the amendment before us, which I support, I would invite the Minister, when he has time off, to look at one particular superb episode of "Yes, Minister" where the fantastic secretary of the Department gave the quintessential reason as to why one can say "no" in six reasonable ways. It is a gem of its kind. The Minister, with a certain degree of west of Ireland blas wrote the script, gave it a particular twist——

Mr. Flynn

If I were writing that script I would not be in here, but I know what the Deputy is getting at.

Mr. Quinn

To say that the idea is a marvellous one but it is badly written is one way of saying it. To say that the idea is a terrific one but it is inappropriate at this time, is another way of saying it. To say that the idea is one with which I personally fully agree but that regrettably it contravenes natural justice is a third way. There are a few others — I am paraphrasing in a very pedestrian way the eloquence with which they were written in that particular television series.

The Minister really has a very simple choice at this stage, to accept the amendment or not. It is clear from what the spokesman for the environment for Fine Gael, Deputy Shatter, said that the amendment will be pressed and it is clear that it will have the support of the other two parties, and that is contrary to the spirit in which we have been trying to do our business today. We have made a lot of progress although we are only at section 6. If this amendment is accepted by the Minister in its present form or if, as invited by Deputy Shatter, the Minister were to signal that he will come back on Report Stage with a tidied up wording of the same amendment, all it would achieve at this stage is simply to say that there is a blacklist, a register of people who have failed to complete planning permissions in respect of housing estates, and only housing estates; that is all it confines itself to; and that in so far as such developers might ever wish to seek compensation from a local authority — and the grounds of compensation clearly are now going to be totally constrained if this legislation has the successful impact that we seek for it — then the occasions on which such persons will in fact be formally denied compensation will, by the Ministers own estimation, be very low. What, therefore, is the legislative benefit of such a provision? It has a two-fold benefit. It has the marvellous benefit of being a deterrent and an encouragement. It is both a carrot and a stick, the carrot being that if they do not get their act together they will forfeit the possibility of claiming compensation at some stage in the future for a compensatable reason — and the Deputies in question, all four of whom have spoken here recently, are members of a local authority that has been the victim of precisely the situation that has been described. It will give to the public at large, albeit in a rather incomplete manner, some degree of warning in respect of the performance of certain types of builders in relation to the construction of housing estates. To that extent it is a bit like a small trader taking on a new customer and wanting to get some indication of how this person performs from the point of view of credit and having reference to the Gazette or some of the companies that provide such credit ratings on people.

I cannot see what is impeding the Minister from accepting that as it stands except the argument of natural justice which has some validity. I have offered a mechanism that may deal with that but I am not a constitutional lawyer and that may not be adequate. I accept, however, that there may be other technical drafting measures that need to be tidied up. I do not accept — and we have done this far too often — that because there is better legislation down the road that will do all of these things and more besides that we should wait for that. Our record in this House in terms of legislation across the board is not as good as any of us would like it to be and there are, regrettably, other sets of reasons for that over which we have little control, for example, the logjam of the parliamentary draftsmen. In this instance one would not solve the problem to which Deputy Shatter and Deputy Owen and the two Workers' Party Deputies have referred, but one would certainly put down a very clear marker and it could be a very effective marker if it were done in the manner of this amendment, without any amendment, without any subsequent change, or in a manner similar to this amendment with whatever polishing and refinement the people in the Department feel they need to do. I can see that in a matter of this nature they may want to get some legal advice apart from the legal advice of Deputy Shatter. I readily accept that that may be so. However, notwithstanding the skill with which "Sir Humphrey" evasions have been offered to the House, the Minister's bona fides in this matter are at test.

Mr. Flynn

Do not put it in those terms.

Mr. Quinn

I would urge the Minister, if he will not accept it as it stands, to come back to the House on Report Stage.

Mr. Rabbitte

I would like to repeat that request to the Minister because there are tens of thousands of people in this city alone, especially in Dublin county — the Minister has said it is a provincial problem as well — who would wish us to avail of the opportunity that is now presented in dealing with this Bill. Legislation promised down the road is all very well but, as Deputy Quinn has said, it may take us a very long time to get there.

I want to underline what Deputy Owen has said, without repeating it. We do operate the bond system and the phased contract basis, but they are not adequate, having regard to the scale of the developments that we are talking about. I take it from what the Minister has said that the Mayo local authority are more successful in dealing with Mayo builders than are Dublin local authorities, but the problem remains and it is so vast and on such a scale in Dublin county that this opportunity should be availed of. It is not that Deputies have come into this House today to take advantage of the opportunity to put on the record the names of certain developers. It is not that at all. It is the track records of the developers that have been mentioned, and one developer, one group of companies, has been mentioned here this evening. I have given the incidence of a 1,590 house estate in my own constituency, Deputy Shatter gave another in my constituency of 1,400 houses, where they have walked off the job. Yet we have, with another hand in Dublin County Council, paid out this vast amount in compensation. For example, in my constituency this developer has walked off and left houses unfinished. They are not the only developer. There is a number of developers in west Dublin and in the Dublin South-West constituency that have left houses half finished, partially finished, almost finished. One can say that is due to market forces, that the bottom fell out of the market and so on and that there is nothing that can be done about that. These houses, however, are a source of intolerable nuisance to the people living in the estate. The dangerous buildings legislation is not adequate or suitable to deal with them. The lives of people in these estates are blighted, the quality of life is blighted by the track record of some of these developers.

We have an opportunity here to deal with this. What I am talking about is a situation where a particular developer puts in a new planning application to, for example, Dublin County Council, for a planning development in another part of the county. Meanwhile he has a number of unfinished houses in other parts of the city. They may very well be more low demand areas of Dublin county or Dublin city as compared to the more prestigious part of the city that they are now seeking planning permission in respect of, but it is appalling that ordinary people who have paid their mortgage through building societies and other financial institutions are left in this predicament. They simply do not understand why we should be according new planning permission to such a developer when these houses are left in that state in unfinished estates. It is Deputy Shatter's amendment and he may want to press it before 7 p.m.

Mr. Shatter

In response to me the Minister said that an unscrupulous developer might get planning permission in somebody else's name. So be it if he builds the estate but he will be on the register and will not sell his houses in those circumstances. Therefore, there would be no incentive for him to behave in that way. That ties up that problem. In the context of the Minister's reply, I will be pressing my amendment.

Mr. Flynn

Planning authorities are administrative authorities and do not exercise penal or quasi-penal powers. The administration of justice is a matter for the courts and the objective the Deputies are seeking to achieve cannot be achieved by this method. If there are no compensation claims following our new policy, how can a developer forfeit a compensation which is non-existent?

Mrs. Owen

Will the Minister clarify——

An Ceann Comhairle

Sorry Deputy, if we continue for much longer I shall have to proceed to other business.

Mr. Shatter

Perhaps we should proceed to other business.

Progress reported; Committee to sit again.