A Supreme Court decision that compensation can be awarded for depreciation of the value of lands due to having electricity power lines installed across them could potentially affect thousands of landowners.
The five-judge court on Thursday rejected arguments by the ESB that a property arbitrator was not entitled to include compensation for land depreciation – referred to in the relevant 19th century law as ‘injurious affection’ – in an award of €39,500 statutory compensation to a couple over power lines installed across their farm.
Arbitrator Peter Good, since deceased, had made the award to Peter and Rose O’Reilly concerning lands owned by them at Crubany, Co Cavan. Compensation for “injurious affection” formed a substantial part of the award; its inclusion was successfully appealed by the ESB to the High Court.
The couple appealed the High Court decision to the Court of Appeal, which decided the matter raised issues of public importance requiring determination by the Supreme Court.
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On Friday, Mr Justice Brian Murray, giving the court’s main judgment, upheld arguments by Peter Bland SC, with barrister Michael O’Donnell, instructed by solicitor Gabriel Toolan, that the entitlement to compensation includes that for “injurious affection”.
The case arose after the couple entered landowner agreements with the ESB in 2011. In return for unobstructed access to their lands to construct electric lines, they were entitled to compensation under the Electricity Supply Act 1927.
The main issue in the Supreme Court appeal concerned the extent of the right to compensation. Mr Good decided that as well as compensation for the loss of value of house sites on the land holding across which the lines travel, they were entitled to compensation for injurious affection, or general loss of value of their entire holding.
Among his findings, Mr Justice Murray said none of the legal authorities demand a “perfect equation” between the compensation mandated by the Constitution for interference with property interests, and the compensation enabled either by developments of the common law or by early Victorian legislation governing the compulsory acquisition of property.
The ESB was correct in saying the exercise of powers conferred by section 53 of the 1927 Act did not give rise to the transfer or creation of interests “in land”, he said. There was therefore no basis on which it could be said the ‘injurious affection’ provisions of the 1845 Land Clauses Consolidation Act were automatically incorporated into the procedure for deciding compensation under the 1927 Act.
No significance could be attached to the fact the 1927 Act did not expressly include or exclude those provisions, he said.
He said the High Court had erred if it found the Acquisition of Land (Assessment of Compensation) Act 1919 operated in any way to preclude a claimant seeking compensation for injurious affection or depreciation of the value of their holding caused by the presence of the electric lines, poles and pylons, he said.
In other findings, he held Mr Good erred when he fixed compensation for anticipated exercise of the power of re-entry on to the lands. He upheld the High Court decision there was no breach by Mr Good, in his handling of the matter, of the ESB’s right to fair procedures.
The precise amount of compensation was referred for decision, in line with the court’s findings, by a new arbitrator.
In a separate concurring judgment, Mr Justice Séamus Woulfe agreed with his colleague on all issues other than the constitutional issue and said he was reserving his position on that to an appropriate case.
