The Supreme Court has found that a woman was not liable for some €50,000 she paid under the derelict sites levy which had first been imposed on the previous owner of a property she bought.
The five-judge court unanimously dismissed an appeal by Dublin City Council against a High Court decision which also found that Michelle Maher was not liable to pay the levy on the East Wall property.
The council claimed the High Court decision had important implications for local authorities throughout the State because it may have the effect of depriving them of a source of funding. Ms Maher opposed the appeal.
In concurring judgments, Ms Justice Marie Baker and Mr Justice Brian Murray dismissed the appeal. Ms Justice Elizabeth Dunne, Mr Justice Séamus Woulfe and Mr Justice Maurice Collins agreed.
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Ms Maher bought the property in 2014 for €176,600 from Bank of Ireland, which had called in a mortgage it granted to the previous owner. In 2015, the council demanded payment from Ms Maher of €50,153 in outstanding derelict sites levies which had been imposed on the land in 2008 by the local authority.
Ms Maher decided to pay the levy under protest after an exchange of correspondence between her solicitors and the council’s lawyers. She subsequently brought proceedings against the council seeking recovery of the money.
The Circuit Court dismissed her case but she won on appeal to the High Court, which found responsibility for payment of the derelict sites levy resided with the previous owner and not the purchaser.
In her decision on the appeal, Ms Justice Baker noted the levy and statutory charge securing it reflect a valuable social purpose in addressing derelict sites.
However, she said the scheme of the Derelict Sites Act 1990 does not purport to impose an obligation to pay the levy “on anyone other than the owner of the land” and the definition of owner expressly excludes a mortgagee not in possession (which was the bank which sold the property to Ms Maher).
The ordinary rules of registration and the scheme of priorities for which the law of property generally provides, whether the land is registered or unregistered, does not allow for an interpretation of the 1990 Act that gives the levy “a form of super priority over prior registered charges”.
In the absence of any clear provisions in the 1990 Act that the levy be treated as having “special characteristics”, the charge must be treated as one requiring registration, she said. It must also be subject to the general principles attaching to the creation of security interests over unregistered land.
The High Court was correct to hold that the sale by the Bank of Ireland to Ms Maher meant the charge was payable by the owner of the land and remained (at the time of the closing of the sale) recoverable by the city council as a simple contract debt against the previous owner, she said.
Mr Justice Murray, in his judgment, said if the Oireachtas wishes to effectively impose on prior encumbrancers the derelict sites levy, then it is incumbent on it to do so clearly. It must make express provision for the rights of fair procedures that would normally attend decisions of public bodies when they have significant adverse effects on their legal rights.
As this had not been done in the Derelict Sites Act, there was no warrant for concluding that a section of that Act (S 24.1), which converts the levy into a charge on the land, was intended to have the effect contended by the city council, he said.
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