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NAMA’S Rates Bill

Under Section 15 (3) of the Valuation Act 2001 State property is not rateable. Consequently, there is no obligation to pay rates on such property.

The Section reads:

“Subject to section 16 , relevant property, being a building or part of a building, land or a waterway or a harbour directly occupied by the State (including any land or building occupied by any Department or office of State, the Defence Forces or the Garda Síochána or used as a prison or place of detention), shall not be rateable.”

We have not heard (it’s early days) what proportion of the property taken by NAMA from the banks is now occupied by NAMA.

We need answers to some questions:

Is NAMA “the State”?

What does “occupied” mean?

A lot of money hangs on those questions.

Auditors

This blog has not been silent on negligence by auditors. See HERE and HERE and a suggested remedy to deal with major frauds HERE.

Every audit will follow a plan. If there is no plan, that’s evidence of negligence. The plan will show whether or not the auditor did his/her job properly. Of course if the “auditee” posts sudden enormous losses, that is evidence that there was a major problem in the auditee. Why did the audit not pick up those losses?

A profitable area for examination would the valuations of assets furnished to the auditee. Those valuations may have been provided by “independent” agents (auctioneers), commissioned either by the auditee or a third party. If those valuations were radically wrong that is a basis for litigation against the valuer to recover the loss arising from the deal or property which was the subject of the negligent valuation.

However, an auditor is obliged to take account of the possibility of fraud. Just because a valuation is on a file from an “independent” agent the auditor is not relieved of his/her obligation to consider whether the accounts show a true and fair view of the fiinances of the entity being audited. The fraud may be in the valuations.

The Prosecutor

Under the Prosecution of Offences Act 1974 most criminal prosecutions are in the charge of the Director of Public Prosecutions (“DPP”). Some offences are assigned to other legal persons (e.g. Government Ministers) for processing in prosecution by the statute under which they are created.

In fact most criminal prosecutions are brought by members of the Garda Siochana in the name of the DPP.

Before the 1974 act the prosecutor was the Attorney General. Consequently, it was, before 1974, a social fiction imposed on the nation that the decision to prosecute or not to prosecute was taken by the Attorney General without regard for the fact that he was a highly politicised figure, held his post at the behest of the Taoiseach and was the confidante and counsellor of the Governement and its members.

The DPP has no role in the investigation of crime. He (or she) receives a file from the Garda Siochana. The file contains the available evidence. The DPP decides, on the evidence in the file, to prosecute or not to prosecute and whether to prosecute on indictment (in the Circuit Court or Central Criminal Court) or summarily (in the District Court).

Prosecutions on indictment are “contracted out” to barristers in private practice. It is a valuable connection to be on the panel for work coming from the DPP.

Ideally, such a person would have considerable experience in criminal cases. That experience can be gained only when working in defence of prosecutions (otherwise the prosecution of offences would be placed in the hands of inexperienced practitioners and that, it is submitted, ought not to happen).

Experience, it is hoped, should dampen zealotry. It is not the job of a prosecutor to “win”, but to facilitate in doing justice. The steady presentation of the available evidence is the job of the prosecutor. That evidence must be such that there is left no reasonable doubt as to the guilt of the defendant.

In fact, the DPP has issued “Guidelines for Prosecutors”. stressing the need for the prosecutor to act honestly, fairly, impartially and objectively. The Guidelines enjoin the prosecutors to;

“(k) carry out their functions honestly, fairly,
consistently impartially and objectively
and without fear, favour, bias or prejudice;”

This is fine in theory, but the decision to prosecute is often made in circumstances where the complainant, sometimes inevitably, has a private grudge against the accused. It is, in such circumstances more important than ever that the circumstances in which the prosecutor got his or her experience qualifying him or her to get work from the State, should have no bearing on whether the private grudge can be advanced at the expense of the public purse and at no risk to the complainant and great risk to the accused.

Kaczynski Crash

President Kaczynski of Poland died with, among others, his wife in the Smolensk air accident. Death of spouses simultaneously is called Commorientes.

If they had been Irish, probably they would have owned their residence in joint names (in joint tenancy). The effect of this form of ownership is to vest full ownership in the survivor. Significantly, the property never becomes part of the estate of the first partner to die. However, commorientes defeats this process. Which died first?

Under Section 5 of the Succession Act 1965 simultaneous death is presumed in some circumstances.

Under Section 68 of the Civil Law (Miscellaneous Provisions) Act 2008 a joint tenancy in commorientes is converted into a tenancy in common in equal shares and each share forms part of the estate of the deceased partner.

Quinn Insurance

Here are some issues not addressed so far (in the papers I read).

(A) Quinn Insurance has a board of Directors. Sean Quinn is not on that board. The board has said nothing about the seizure of the company by the Provisional Administrators. Sean Quinn never stops talking about it and issuing press releases and public statements, including TV interviews.

Is he in fact in charge of Quinn Insurance?

This is possible. Under Section 27 of the Companies Act 1990:-

“…a person in accordance with whose directions or instructions the directors of a company are accustomed to act (in this Act referred to as “a shadow director”) shall be treated for the purposes of this Part as a director of the company…”

Does the Financial Regulator know anything about this that we don’t?

(B) Quinn Insurance has been accepting professional indemnity business from British solicitors. The mind boggles. Every now and again a wave of mortgage fraud sweeps Britain. Irrespective of whether the solicitors are complicit, the claims are numerous and large. It is very difficult to calculate the proper premium to match the risk. It is not easy, either, to refuse indemnity; the insured solicitors can fight.

Saying… No!

Ireland is currently coming to the consideration of profound derelictions of duty of a number of people, including and particularly, leading politicians.

The generalized defence coming out is that someone else was responsible.

The law has long had to deal with that kind of response. A solicitor, for example, is not entitled to say that he/she is following the advice of Counsel; that advice must be assessed by the solicitor and not be blindly followed.

Probably a nurse should not follow a doctor’s directions where they are clearly and obviously wrong. A pharmacist should not dispense a prescription where the pharmacist knows or should know that the wrong drug is being prescribed (or the perception is of such; bad handwriting should be considered).

Trouble for Builders

Remarkably, the builder of the Courts of Justice in the Strand, in London, became insolvent during and as a consequence of the work.
Many Irish builders are now becoming insolvent. That’s inevitable in circumstances where their employers, developers, are now insolvent and heading into NAMA.
Whatever the reason, this kind of difficulty is endemic for builders. In Marlborough v Strong [1721] 1 Bro. (P.C.) 175 the builder of Blenheim Palace was shortchanged by the Duke of Marlborough to the tune of £7,300 (an enormous sum).
The Duke refused to pay the shortfall on the grounds that his alleged agent, the Earl of Godolphin was not his agent. In fact the Duke had engaged the services of the Earl precisely to act for him in relation to the building; to employ people (including the architect, Sir John Vanbrough); and to enter contracts for the purpose. The Duke claimed that the Earl was acting as Lord High Treasurer of England and not as his private personal agent. The court thought otherwise and gave judgment for the builders.
(The Duke resembled some of Ireland’s developers; the Duchess reported him as not bothering, on one occasion, to remove his high riding boots in going to the task of “pleasuring” her.)

Professional Negligence

Many professionals (doctors, solicitors, dentists, architects, surveyors etc.) provide services to “consumers”.
Section 2 (1) of the Consumer Protection Act 2007 defines a consumer:

“” consumer ” means a natural person (whether in the State or not) who is acting for purposes unrelated to the person’s trade, business or profession;”

Services are covered by the Act of 2007 explicitly and under the definition of “product” which “means goods or services”.
The Act prohibits misleading commercial practices and provides:

“46.- (1) A commercial practice is misleading if the trader omits or conceals material information that the average consumer would need, in the context, to make an informed transactional decision…”

The Act defines “transactional decision” as:

” transactional decision ” means, in relation to a consumer transaction, any decision by the consumer concerning whether, how or on what terms to do, or refrain from doing, any of the following:
…(e) exercise a contractual right in relation to the product;”

Section 46 transposes the terms of Article 7 of the Unfair Commercial Practices Directive into Irish law. The section prohibits the omission or concealment of information and/or the provision of such information if it is… “unclear”… etc. Prior to Section 46 it was not statutorily misleading to withhold relevant information from a consumer. “Contractual right” includes the right to issue proceedings and to know the factual basis of that right. In short, Section 46 of the Act of 2007 appears to require of a “trader” that he/she/it disclose to a consumer facts necessary to ground a claim of negligence against the professional.
Previously, the nearest pertinent law on this was seen applied in Gough v Neary & Anor. [2003] IESC

Judge Goeghegan said in that case:

“The plaintiff did not know that contrary to the false information given to her the hysterectomy was unnecessary until late 1998 or, indeed, some time after that when as a consequence of media coverage in relation to Dr. Neary and hysterectomies which he had carried out on a number of patients in connection with birth deliveries, she acquired the knowledge that the operation was unnecessary. That being so and in the absence of authorities, I would be of opinion that the plea of statute bar must fail.”

The Consumer Protection Act 2007 appears to have moved the focus from the positive action of the Defendant to the deprived (of knowledge) state of the Plaintiff.
Concomitant rights of discovery would seem to follow in any litigation where the Plaintiff is a “consumer”. Current rules of court do not appear to recognize this.

Where the professional is in the building business (or is a builder), Section 46 of the Act of 2007 will affect the “contractual” duty on such a professional of making disclosure of defects in, say, design, even after the completion of the contract.
See New Islington New Islington and Hackney Housing Association Ltd v. Pollard Thomas and Edwards Ltd [2000] EWHC Technology 43.

Insurance Claims

See HERE for a post on the possibility of difficulties with insurance companies. Readers might like to know of the provisions of Section 55 (3) (f) of the Consumer Protection Act 2007.

It reads:

“55.- (3) A trader shall not engage in any of the following commercial practices:

… (d) in relation to a consumer’s claim on an insurance policy, doing either or both of the following:
(i) requiring the consumer to produce documents irrelevant to the validity of the claim;
(ii) persistently failing to respond to the consumer’s correspondence on the matter, in order to dissuade the consumer from exercising contractual rights in respect of that claim;…”

Practically, when you get this kind of run-around, phone your solicitor.

Stolen goods

Receivers of stolen property do not pay full value for the property. A receiver is a person who buys the property from the thief or someone deriving, consciously, possession from the thief. Anyone in possession after the theft derives possession from the thief, whether they know it or not. The knowledge of the person decides the point as to whether they are a receiver or an innocent person in possession. (That knowledge can be inferred; if the property is bought for a considerable discount on its true value there is an implication that the purchaser knows the goods are stolen. To be suspicious is to know, for these purposes).

In the world of commerce, possession alone is insufficient to transact business; title or ownership is indispensable. (There are very rare exceptions).

Consequently, purchasers of stolen property are at risk of losing the money they pay for the property. We see this in Mallett & Son [Antiques] Ltd -v- Rogers [2005] IEHC 131.

The Plaintiff purchased a piece of furniture from the Defendant. It was an antique piece and of very high value. It had been stolen ten years previously. When the property was located by its true owner as the Plaintiff put it up for sale in London it was returned to the owner and the Plaintiff claimed for its loss against the Defendant.

Amusingly, as recorded by the judge,

“The defendant claims that the plaintiff was guilty of negligence and breach of the duty of care which it owed inter alia to the defendant, by failing to take any or any reasonable steps to carry out appropriate checks on the authenticity of the bookcase (notwithstanding considerable experience and expertise in the buying, selling and restoration of antique furniture).
The defendant claims that if the plaintiff had exercised reasonable care it would have discovered that the bookcase had in fact been stolen and was the property of Lord Roden and would have to be returned to him.”

This was an absurd proposition. On the facts, the Defendant was in the antiques business himself. As a practical matter he was in at least as good a position, as the Plaintiff, to make inquiries.

More importantly, the issue is dealt with in the Sale of Goods Act 1893 (as amended). Section 12 reads:

“(1) In every contract of sale, other than one to which subs. (2) applies, there is
(a) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods and, in the case of an agreement to sell, he will have a right to sell the goods at a time when the property is to pass,
(b) an implied warranty that the goods are free, and will remain free until the time when the property is to pass, of any charge or encumbrance not disclosed by the buyer before the contract is made and that the buyer will enjoy quite possession of the goods except insofar as it may be disturbed by the owner or other person entitled to the benefit of any charge or encumbrance so disclosed.”

The contract between the parties was governed by the terms of the 1893 Act and the Defendant was in breach of the contract. That breach resulted in a claim for £111,533 and judgment in that amount.

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