High Court: Arbitrator should have referred ESB’s question regarding double compensation to the High Court

About this case:

• Citation:
  [2019] IEHC 475
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Michael Twomey

Background

In June 2014 Mr Kenneth Payne was notified that works would be commenced on his land for the purpose of the placement of an electric line pursuant to section 53 of the Electricity (Supply) Act 1927 (as amended by section 1 of the Electricity (Supply) (Amendment) Act 1985). 

Mr Payne was informed that he would be provided with “Flexibility of Access” (FOA) payments made in recognition of the disruption caused by construction. He was also informed that he would be entitled to compensation for any reinstatement works needed on his land as a result of the construction of the line. 

Between 2015 and 2017, Mr Payne was paid €66,000 in FOA payments. In 2016, Mr Payne submitted a compensation claim in the sum of €640,500 to ESB. 

Appointment of property arbitrator

Section 1 of the Acquisition of Land (Assessment of Compensation) Act 1919 provides for the appointment of an arbitrator to determine any question of disputed compensation. In May 2017, Mr Desmond Boyle was appointed as property arbitrator. In January 2018, the arbitration began – at which point Mr Payne reduced his compensation claim to €400,660.

In October 2018, ESB wrote to Mr Boyle requesting him to state a case to the High Court in relation to his assessment of compensation under section 53(5) of the Electricity (Supply) Act 1927. ESB wanted Mr Boyle to ask the High Court: 

“Having regard to the fact that €66,000 has been paid by or on behalf of [ESB] to [Mr Payne] by reason of the placement of the electricity line on his land … ought I (a) take into account the said payment or (b) disregard the fact of the said payment, in assessing the compensation to be awarded to [Mr Payne] against [ESB]?”

Mr Boyle refused to state a case to the High Court as he did not view the preliminary issue as “a point of law germane to this Arbitration” and he lacked the jurisdiction “to state a case of that nature”.

Thereafter, ESB issued the present proceedings, seeking an order of certiorari quashing Mr Boyle’s decision refusing ESB’s application to have a special case stated to the High Court on a point of law. ESB also sought a declaration that Mr Boyle erred fundamentally in law and acted irrationally, and an order of mandamus to direct Mr Boyle to refer the point of law to the High Court.

Considerable national significance

ESB argued that the resolution of the point of law was not just a matter of real and substantial importance to the parties in the present case, but that it was also a matter of considerable national significance – “likely to have a considerable significance for not just the public funds used in building new lines, but also for the competitiveness of the Irish economy”.

Mr Justice Twomey said it was clear from Shackleton v Cork County Council [2007] IEHC 241 that the exercise of powers by a property arbitrator are amenable to judicial review. Mr Justice Twomey was also satisfied that Article 5 of the UNCITRAL Model Law, stating that no Court shall intervene in matters governed by the Model Law (adopted into Irish law by section 6 of the Arbitration Act 2010), did not apply to property arbitrations and therefore the decision was amenable to judicial review.

Mr Justice Twomey said that in ESB v Boyle & Anor [2018] IEHC 718, Mr Justice Quinn endorsed Halfdan Greig & Co v Sterling Coal Ltd [1973] QB 843 which set out three pre-requisites to be satisfied before an arbitrator should state a case on a point of law. Namely, that the point of law should be:

1. Real and substantial and such as to be open to serious argument and appropriate for a decision by a court of law – as distinct from a point which is dependent on the special expertise of the arbitrator or umpire;

2. Clear cut and capable of being accurately stated as a point of law – as distinct from the dressing up of a matter of fact as if it were a point of law;

3. Of such importance that the resolution of it is necessary for the proper determination of the case – as distinct from a side issue of little importance.

Firstly, Mr Justice Twomey said it was clear that the question of whether Mr Payne is being “doubly compensated at the expense of the public purse” was “not an insignificant issue”. He said it was significant for ESB and for Mr Payne; that it was a real and substantial issue; and it was open to serious argument appropriate for a decision by a court of law.

Secondly, Mr Justice Twomey said that since the issue of whether the FOA payments should be taken into a count would require either a “yes” or “no” answer – the issue was clear cut and capable of being very accurately stated as a point of law.

Thirdly, Mr Justice Twomey said that since the final amount of compensation could only be finalised upon a decision on whether to take account of the FOA payments, it was self-evident that the point of law in question was one of such importance that its resolution was necessary for the proper determination of the case.

In all the circumstances, Mr Justice Twomey was satisfied that Mr Boyle should have stated a case and directed that he should do so in the terms requested by ESB.

• by Seosamh Gráinséir for Irish Legal News