Court of Appeal refuses appeal against High Court's refusal to order partial payment of arbitrator's award pending title dispute resolution.

APPROVED NO REDACTION NEEDED

THE COURT OF APPEAL

CIVIL

Neutral Citation Number: [2026] IECA 11

Court of Appeal Record Number: 2015/592

High Court Record Number: 2008/648SP

Whelan J. Butler J. Hyland J.

BETWEEN/

JACKSON WAY PROPERTIES LTD

APPELLANT

- AND -

DÚN LAOGHAIRE RATHDOWN COUNTY COUNCIL

DEFENDANT/ RESPONDENT

JUDGMENT of Ms. Justice Butler delivered on the 11th day of February 2026

Introduction

1. This judgment deals with an appeal from the decision of the High Court (Binchy J. [2015] IEHC 619) refusing the appellant’s application that the High Court direct payment of part of an arbitrator’s award made on 12th November 2003. The award is for a sum of €12,860,700 in respect of the compulsory acquisition of 8.168 hectares of land in South County Dublin by Dún Laoghaire Rathdown County Council (“DLRCC”). The land was used for the construction of part of the M50 motorway. The appellant requested payment of €7,010,700 which it claims represents the portion of the arbitrator’s award which is not potentially subject to a claim for compensation made by adjacent landowners (“the Smiths”) in respect of the value of a restrictive covenant over the appellant’s land. The application for part payment was made in the context of proceedings issued by the appellant in 2008 seeking enforcement of the arbitrator’s award under s. 41 of the Arbitration Act 1954.

2. DLRCC argued successfully before the High Court that there was a significant issue as to whether the appellant would be able to prove the title which was the basis of its claim for compensation and on which the valuation of its lands by the arbitrator and his subsequent award was based. Consequently, it disputed the appellant’s entitlement to any payment on foot of the award, much less an interim payment of a substantial portion of the award pending resolution of those issues. In light of the very significant issues between the parties, the High Court judge was concerned that if it were to accede to the appellant’s application, this could result in a substantial overpayment to the appellant. He was also satisfied that the appellant had not met the test for the grant of a mandatory interlocutory injunction – a test the applicability of which was, and is, disputed by the appellant.

3. In the considerable period which has passed since the High Court judgment was delivered, separate proceedings were instituted and concluded between the appellant and the Smiths (“the Smith proceedings”), the net result of which is to confirm that the appellant’s title was affected by a restrictive covenant in favour of the Smiths’ lands. This in turn means that the unencumbered freehold title claimed by the appellant cannot – at least as things stand

– be proved. As a result, much of the analysis contained in the High Court judgment which was delivered at a time when this issue remained unresolved, has now been overtaken and the arguments presented on this appeal proceeded on a materially different basis. Amongst other things, the appellant now claims that the defect in its title compared to the title claimed can be made good by an application currently pending before the High Court to discharge the restrictive covenant in favour of the Smiths under s. 50 of the Land and Conveyancing Law Reform Act 2009.

4. For the reasons which are set out in the balance of this judgment, I am satisfied that it would not be appropriate to order part payment of the arbitrator’s award at this stage - assuming of course that the Court has jurisdiction to make such an order, a matter which was also in dispute. There are very fundamental issues which remain to be determined regarding the enforceability of this award. Those issues affect the core basis on which compensation was claimed and upon which the valuation was conducted and are not limited to discrete elements of the award which might be severed from the balance so as to allow for immediate payment of some of it. It would be singularly inappropriate to direct that a sizeable portion of the award be paid out whilst the enforceability of the entire remains in dispute.

5. I have reached this conclusion notwithstanding a point strongly made by the appellant, which, by any standards, must be accepted as correct. The appellant was the owner of a property which was compulsorily acquired by DLRCC more than a quarter of a century ago. The CPO dates from October 1998; the Notice to Treat was served on 14th June 2000 thereby fixing this as the valuation date; DLRCC took possession of the lands in October 2001; after a protracted – and disputed – arbitration process, the arbitrator issued his award in November 2003 and, finally, on 30th June 2005 the section of the M50 constructed over the appellant’s lands was open to the public. Despite all of these by now historic events, the appellant still has not received any of the compensation for the acquisition of its lands to which it is undoubtedly entitled. It is a fundamental principle underlying the protection the Constitution affords private property that any interference with an individual’s property rights will be compensated. Therefore, it is a matter of serious concern to the Court that although the appellant has been deprived of its property for more than 25 years, it has not yet been compensated for this loss.

6. The appellant blames DLRCC for this delay and asserts that from the outset DLRCC was implacably opposed to paying compensation to it. It points to exchanges between DLRCC and both An Garda Síochána and the Criminal Assets Bureau, which, it contends, led to the taking of legal proceedings by CAB against the appellant and to criminal proceedings against an associated individual which in turn led to a multiplicity of litigation between the appellant and these bodies. Although the CAB proceedings were protracted, they did not result in the making of any order against the appellant and the criminal prosecution concluded in the entry of a nolle prosequi after the trial had commenced.

7. When the issues in this case are examined closely three things become apparent. Firstly, DLRCC was clearly anxious that it should not be required to pay substantial compensation to the appellant, which it regarded as having been involved in improper conduct. However, once the Supreme Court set aside an interlocutory injunction which had been granted in the High Court to restrain the conduct of the arbitration, DLRCC engaged with the arbitration and the subsequent conveyancing process without further delay. It is fair to observe that the Supreme Court (Keane C.J., ex tempore judgment 17th June 2002) was extremely critical of DLRCC for having issued proceedings seeking to restrain the arbitration in the absence of any evidence to support its claim.

8. Secondly and more importantly, the issue between the parties which has prevented the enforcement of the award to date is a purely legal one relating to the appellant’s title. As will be set out in more detail below, this issue was raised by DLRCC before the arbitration in 2002 and before the arbitrator in 2003. The appellant resisted any suggestion that the arbitrator should deal with the issue, accepting that in due course it would be required to prove the title it had claimed. As things have transpired, the appellant has not been able to prove that title which now gives rise to complex issues regarding the enforceability of the award based, as it is, on that title. DLRCC cannot be faulted for its reliance on an issue which it brought promptly to the appellant’s attention, and which was subsequently resolved in its favour.

9. Thirdly, the length of the delay makes the pragmatic resolution of issues between the parties even more complicated. This is because the original award, if enforceable, would attract interest at very favourable rates for a period of more than 20 years. That interest would now itself amount to a very sizeable sum. Consequently, the appellant is unwilling to countenance any suggestion that the 2003 award is unenforceable or that its title cannot be retrospectively rectified to meet that claimed in 2000. For the opposite reasons, DLRCC is equally unwilling to treat the existing award as the appropriate starting point to which adjustments (the appellant suggests only minor adjustments) should be made before it is enforced. This is clearly not an issue which can or should be resolved on this appeal. Nonetheless it may perhaps illustrate why a solution has not yet been reached in a dispute which must ultimately be resolved on a financial basis.

10. The balance of this judgment will examine the issues before the Court in the following order. Firstly, I will look in some detail at the factual and procedural background to the restrictive covenant issue and, in less detail, at the resolution of that issue by this Court in Jackson Way Properties Ltd v. Smith [2023] IECA 185. I will then look at the pleadings in the proceedings in which this application is made which date from 2008 and at the grounds on which interlocutory relief was sought. There are two preliminary legal issues which I will then address. The first concerns the jurisdiction of the Court to make an order directing part payment of an arbitral award, an issue which was not decided by the High Court. Given that I do not propose to make such an order it is unnecessary to determine whether the jurisdiction exists, but as the parties have made detailed arguments I will address it on an obiter basis. The second concerns the legal test applicable to a decision to order part payment of a sum in respect of which judgment is sought and whether the trial judge was correct to equate it with that applicable to a mandatory interlocutory injunction. As much of the High Court judgment has been overtaken by subsequent events, I do not propose to consider it under a separate heading but will address it where relevant to the issues as they now stand.

11. Finally, I will consider the substance of the issue between the parties – i.e. whether part payment of an arbitrator’s award can be directed in circumstances where the appellant is unable to prove the title upon which that award was based. Many of the issues which were argued under this heading are neither suitable nor capable of resolution on an application for part payment of the award. These include the effect the restrictive covenant would have had on the valuation of the lands in 2000 and whether the discharge of the restrictive covenant on foot of the application currently pending before the High Court can operate retrospectively so as to clear the appellant’s title as of 2000.

Restrictive Covenant – Factual Background

12. The following summary of the factual background is drawn in large part from the judgment of my colleague, Whelan J., in Jackson Way Properties v. Smith [2023] IECA 185 (also “the Smith proceedings”) which contains a detailed account of how the restrictive covenant issue arose between the parties to these proceedings. The judgment also contains a very thorough analysis of the law – and indeed the legal history – on whether and how the burden of such covenants ran with the land so as to bind the successor-in-title of the original covenantor. A summary could not do justice to the depth of this analysis and, fortunately, it is not necessary in circumstances where that judgment has definitively determined the position regarding the restrictive covenant in issue which must now be accepted as affecting the appellant’s title to the lands which were the subject of the CPO. The residual issues are the impact the restrictive covenant would have had on the valuation of the land as of 2000 and whether the restrictive covenant can now be cleared from the title so as to retrospectively remove it as of 2000. These are not necessarily issues which can or should be determined on an appeal from an application for part payment of the award, but the appellant relies on what it contends to be the correct outcome of those issues to assert that the original award made by the arbitrator in 2003 should stand and, consequently, that it would be appropriate for the Court to order payment out of the supposedly undisputed portion of it.

13. The lands owned by the appellant, which include the 8 hectares the subject of the CPO, and the lands owned by the Smiths were originally part of a single landholding comprising approximately 129 acres which, in 1944, was acquired by a man named Murphy. These lands were registered in Folio 1849 Co. Dublin (Folio 1849). In 1947 Murphy transferred approximately 108 acres from Folio 1849 to one Wilson. Those lands, carved out of Folio 1849, were registered on Folio 4940 Co. Dublin (Folio 4940) and approximately 18 acres known as Priorsland (“the retained lands”) remained in Folio 1894.

14. As part of that transaction, in the Deed of Transfer Wilson entered into a restrictive covenant to the effect that he and his successors-in-title “will not at any time erect any building on the property herein”. Although the restrictive covenant was registered as burden No.4 on folio 4940, i.e. the servient lands, the terms of the covenant did not expressly identify the dominant lands for whose benefit the restrictive covenant was reserved. For estate management reasons, in 1956 Murphy transferred the retained lands in Folio 1849 to a company called Bedford.

15. In 1962 Wilson sought to modify the restrictive covenant in order to build a dwelling house on part of the lands comprised within Folio 4940. In response to a query raised by the Land Registry, Murphy swore an affidavit dated 6th March 1962 in which it was confirmed that the primary purpose of the covenant was to benefit the dwelling house at Priorsland. He also agreed to the proposed modification of the restrictive covenant’s application by excluding its application from the portion of the lands sold in 1947 on which Wilson wished to build, thus facilitating the construction of the dwelling house on lands in Folio 4940. Bedford, by then the registered owner of Folio 1849, joined in the transaction. The affidavit was included in the documents relating to dealing 0045/4/62 filed in the Land Registry and the modification was registered as burden No.5 on Folio 4940.

16. The lands in both folios were further subdivided and transferred over the years. In 1978 the dwelling house at Priorsland and the lands surrounding it were sold separately with Messrs. Kilcoyne, Darragh and O’Halloran acquiring the lands (approximately 18 acres) and the Smiths’ predecessor-in-title acquiring Priorsland House together with approximately 1/3 of an acre. The Smiths purchased their property in 1983. Thus, the Smiths acquired a portion of the retained lands in Folio 1849 which benefited from the restrictive covenant entered into in 1947 which covenant was confirmed and modified in 1962.

17. Meanwhile after a series of transfers, in 1994 the appellant acquired the bulk of the lands in Folio 4940 which had been transferred to Wilson in 1947. To a certain extent the appellant accepted that the restrictive covenant as registered at burden Nos.4 and 5 of its folio affected its title and it procured the release and discharge of the covenant for a nominal fee from Messrs. Kilcoyne, Darragh and O’Halloran. However, it took the view that the benefit of the restrictive covenant did not extend to the very small portion of the Priorsland lands acquired by the Smiths. Consequently, in the claim for compensation submitted to DLRCC in response to service of Notice to Treat and in all subsequent correspondence, the appellant asserted an unencumbered freehold title subject only to certain wayleaves, which are not relevant for present purposes.

18. It is clear from the decision of Whelan J. in the Smith proceedings that that assertion was incorrect. For reasons which are set out in detail in that judgment, she held that the restrictive covenant was not purely personal in nature but was intended to benefit the retained lands held by the covenantee; that extrinsic evidence of the 1962 transaction was admissible to show that the restrictive covenant was validly attached to the entire of the retained lands and that the conduct of Wilson in entering into and executing the deed of modification of the restrictive covenant in 1962 gave rise to an estoppel by deed which bound his successors-intitle.

Restrictive Covenant – Procedural Background

19. The preceding section of this judgment explains how the title to the CPO lands owned by the appellant came to be subject to a restrictive covenant the terms of which precluded the erection of any buildings on the land. Effectively, this covenant operated to sterilise the land for development purposes – unless its release were to be negotiated between the appellant and the Smiths. This step was not taken because of the appellant’s firm, but ultimately incorrect, view that the restrictive covenant did not benefit Priorsland House. It will be appreciated that the value of the lands depended very much on the extent to which they could be developed as of the reference date in 2000. Indeed, much of the initial discord between DLRCC and the appellant concerned the circumstances in which the zoning status of the land had been changed from agricultural to industrial in 1998, thus significantly enhancing their development potential and hence their value.

20. A sterilisation of lands by reason of a restrictive covenant is, of course, materially different to their zoning status. A restrictive covenant can be removed by private agreement between the landowners, and since 2009 by way of an application to Court (see further below), whereas the zoning status of the lands can only be changed by the members of a local authority following a statutory process in which the public have a right to participate. This difference may well be reflected in the extent to which the existence of a restrictive covenant which sterilises lands affects the value of those lands for CPO purposes. The difficulty the appellant currently faces is that there has been no valuation of the lands as affected by the restrictive covenant. Moreover, the fact that no such valuation was carried out is entirely due to the stance taken by the appellant during the course of the arbitration which I propose to outline briefly below.

21. As noted, the appellant’s claim for compensation was based on an unencumbered freehold title. In July 2002 DLRCC raised a notice for particulars regarding the appellant’s claim. Item 6 of that notice referred to burdens Nos. 4 and 5 on Folio 4940 and asked for copies of the instruments reflecting the 1947 and 1962 dealings (i.e. numbers 257/6/47 and 45/4/62) to be provided. The reply ultimately received from the appellant’s solicitors, contained in a letter to the arbitrator dated 2nd September 2002 restated the basis of the claim and concluded: “… The claimant says its interest in the property is a freehold free from encumbrances and this is the basis upon which the claim is made. I submit it is a matter for you to adjudicate the claim upon this basis and should the Claimant not be able to vouch the title claimed following publication of your Award it would then be open to either party to seek to have the matter remitted to you for the purpose of adjusting your Award.”

22. Accepting that claim at face value, DLRCC made an unconditional offer (of some €9.5 million) by letter dated 13th September 2002. Although the appellant asserts that this is the base value DLRCC attributes to the lands, I think DLRCC is correct in saying that this offer was made on the basis that the appellant would be able to prove the unencumbered freehold title which it had claimed. Further, for the purposes of this discussion, it was clear that the appellant owns the freehold title to the lands in question. The only issue was the extent to which, if at all, the title was encumbered by the restrictive covenant. Thus, it was accepted from the outset by DLRCC that the appellant was entitled to compensation “and probably fairly substantial compensation” (per counsel on behalf of DLRCC in moving the application for an interlocutory injunction to restrain the arbitration on 21st January 2002).

23. Just prior to the commencement of the arbitration on 19th September 2002, the appellant’s solicitor provided DLRCC with an updated copy of Folio 4940 and indicated his understanding that certain burdens, including those at burdens Nos.4 and 5, no longer affected the property. He indicated that this would “be vouched in due course following publication of the property arbitrator’s award”.

24. The arbitration proceeded and ran for over 16 days commencing in October 2002. DLRCC continued to make enquiries regarding the burdens registered in the folio and, on 18th December 2002, received a letter from the Smiths’ solicitors confirming that the Smiths had not entered into any arrangements with the appellant varying or releasing the covenant which the Smiths contended was primarily intended to benefit their property, Priorsland House.

25. At this stage the arbitration hearings had concluded but the award had not been made. Consequently, on 17th January 2003 DLRCC wrote to the arbitrator advising him of the correspondence received from the Smiths. DLRCC suggested that this issue was germane to the making of an award and asked for the arbitrator’s directions. The appellant objected to the re-opening of the arbitration which it contended was complete. In a letter to the arbitrator dated 21st January 2003 the appellant’s solicitor stated: – “Issues of title were dealt with prior to the Arbitration hearing. It is a matter for the Claimant to prove the title for which compensation is claimed and, as previously stated, the claimant believes it will be able to vouch the title in respect of which compensation has been claimed. This, however, is not a matter relevant to your function and you have already made this quite clear to the County Solicitor.”

26. In reply, by letter dated 28th January 2003, the law agent set out DLRCC’s view that the title on which an award is based is that which existed on the date of the Notice to Treat, which it said “fixes the date by reference to which the interest being acquired is to be valued”. Consequently, DLRCC claimed to have legitimate concerns that the title to the property as of the date of Notice to Treat was different to that represented to the arbitrator. As a result of this exchange of correspondence, the arbitrator met the parties’ legal representatives in February 2003 and, ultimately, the arbitration was re-opened on 2nd October 2003.

27. At the re-opened arbitration hearing, counsel for DLRCC made two alternate applications, both of which were refused by the arbitrator. The first was that the arbitrator should hear further evidence as to whether the restrictive covenant was valid and subsisting and, if so, assess the effect on the quantum of the appellant’s claim. The second was to ask the arbitrator to make his award in the form of a case stated and on two alternate bases, i.e. the value of the property assuming the title was not burdened by the restrictive covenant and its value assuming it was burdened by the restrictive covenant. This, it was submitted, would allow a Court to determine the validity of the restrictive covenant whilst preserving the finality of the valuation process. Somewhat prophetically, counsel for DLRCC suggested this would avoid “duplicatory and unnecessary legal proceedings after the arbitration process has concluded” and at a later point he emphasised DLRCC’s belief that there was a restrictive covenant “that will inevitably lead to further conflict”.

28. Counsel for the appellant strenuously opposed both courses of action proposed by DLRCC in doing so he stated: – “And if, for some reason, there is a dispute as to whether or not this covenant affects the land, it is up to me to establish to the satisfaction of the acquiring authority, or if they are not satisfied, to establish to the satisfaction of a court of law, that that covenant does not affect. If it does affect, then I can't collect my compensation on the basis of the claim on the title that I have claimed… However, as I have already indicated, we are proceeding on the basis that the covenant does not affect the land, and it is up to us to satisfy either the acquiring authority, or if they are not satisfied, a Court of Law, that is does not so affect the lands.”

29. The arbitrator proceeded to make his award on 12th November 2003 on the basis of the unencumbered freehold title claimed by the appellant. Almost immediately on 18th November 2003 the law agent wrote to the appellant’s solicitor requesting the production of the appellant’s title as required by the Housing Act 1966. The appellant’s solicitors responded saying that as DLRCC already had a copy of their folio, it should be used to raise requisitions on title and asked for a draft Deed of Transfer. In reply on 22nd December 2003 the law agent wrote expressing concern that the appellant was dragging its heels and “[did] not appear to have procured the back title dealing with the various burdens”. On 15th March 2004, the appellant’s solicitors furnished “the last” of the Land Registry instruments including dealings numbered 275/6/47 and 45/4/62 (i.e. those dealing with the restrictive covenant registered at burden Nos.4 and 5). On 29th March 2004 the appellant’s solicitors confirmed, in response to a query from the law agent, that it was apparent “that neither burdens number 4 or 5 have been discharged or amended”.

30. There matters rested, save of course that on the ground the relevant section of the M50 was constructed and opened to the public, until 2008. At that point on 7th July 2008 a new firm of solicitors wrote to DLRCC on behalf of the appellant asking that a Deed of Transfer be provided to them, seeking payment of the amount of the award plus interest and threatening legal proceedings if that sum was not paid. These proceedings were instituted by way of special summons on 31st July 2008 seeking orders under s. 41 of the Arbitration Act 1954 enforcing the award made by the arbitrator by way of judgment in the sum of the award plus interest at the rate of 4.5% per annum (the “2008 proceedings”). I will return to the pleadings in due course.

31. The matter came before the Master of the High Court on 15th October 2008 and, unsurprisingly, he transferred the case to the Judge’s list. However, in the course of that brief hearing, counsel for DLRCC explained that the non-payment of the award was due to the appellant’s subsequent failure to prove the title upon which the award was based. He acknowledged that there was a dispute as to whether the appellant had the title claimed. The same stance was adopted by DLRCC when the case appeared in the Chancery List the following month. Laffoy J. accepted the matter should go to plenary hearing and directed the exchange of points of claim and points of objection. Amongst the issues raised by DLRCC was whether the validity of the restrictive covenant could be determined in proceedings brought under s. 41.

32. While these matters were ongoing, on 13th January 2009 the Smiths filed a formal application for compensation from DLRCC in respect, inter alia, of “the devaluation caused to the interest [of the Smiths]…by virtue of the acquisition… by the Council of adjoining lands under the Motorway Scheme” (“the Smiths’ claim”). That claim, which I understand has not yet been determined, appears to proceed, at least in part, on the basis that the construction of the motorway was itself a breach of the restrictive covenant. The Smiths’ claim was particularised in an amount of €5,850,000.

33. A copy of the appellant’s amended points of claim was served on the Smiths because they were potentially affected by the appellant’s claim for declaratory relief in respect of the restrictive covenant. On 25th May 2009 when the matter was still making its way through the Chancery list, counsel appeared on behalf of the Smiths. He strongly urged that issues concerning title and the validity of the restrictive covenant could not be determined nor relief granted in respect of them in proceedings under s. 41. He also pointed out that the applicability or non-applicability of the restrictive covenant affected a substantially greater parcel of lands than that subject to the CPO. Ultimately, on 1st February 2010 Laffoy J. refused to join the Smiths to these proceedings, and the proceedings (i.e. the 2008 proceedings) were adjourned generally to allow the title issue involving the Smiths to be determined in separate proceedings.

34. On 8th March 2010 the appellant issued proceedings against the Smiths to which DLRCC was a notice party (i.e. the Smith proceedings). The High Court made declarations in 2018 that the burden of the restrictive covenant was not annexed to the lands in Folio 4940 and that the servient lands were not otherwise bound by the covenant. As previously set out, those declarations were overturned on appeal by this Court in 2023. Whilst the Smith proceedings were still pending these proceedings were re-activated by motion issued on 12th January 2015 in which the appellant sought part payment of the arbitrator’s award. At the time the motion came on for hearing before Binchy J. in the High Court, the Smith proceedings remained outstanding. Thus, arguments were made on the alternate assumptions that the appellant would be in a position to transfer and unencumbered freehold title to DLRCC and that it would not be in a position to do so.

35. A number of matters are apparent from this chronology. Firstly, DLRCC raised issues regarding the restrictive covenant at burdens Nos. 4 and 5 of Folio 4940 from a very early stage, even before the arbitration hearing had commenced. As soon as it became aware of the Smiths’ claim it brought it to the attention of the arbitrator and the appellant at a time before any award was made. Whatever might be said about its actions at the outset in attempting to delay the arbitration, no blame can be attributed to DLRCC for the delay in payment of the compensation resulting from the fact that the appellant has been unable to prove the title it claimed precisely because of the issues identified by DLRCC.

36. Second, this issue was initially raised by DLRCC on the basis that the applicability or non-applicability of the restrictive covenant needed to be addressed by the appellant to prove its title. Between the date of the award in 2003 and the institution of proceedings in 2008 the appellant did not make any concrete efforts to deal with the issue, relying instead on its understanding that the burdens in question no longer affected the property. In the event it was unable to vouch its claim.

37. Third, the appellant was entitled to dispute the Smiths’ claim that their property continued to have the benefit of the restrictive covenant but the initial refusal to acknowledge the issue and the subsequent failure to deal with the matter head-on has undoubtedly been a major contributor to the overall delay.

38. Fourthly, and most relevantly for the outcome of this appeal, consequential matters flowing from the fact that the restrictive covenant applies are still not resolved. The appellant argued before this Court both that the restrictive covenant had “zero impact” on the value of its land on the reference date and that it could, even now, clear the restrictive covenant from its title with retrospective effect going back to the reference date. It may or may not be correct on either of these points but, even if it is, the consequences for the existing valuation premised on an unencumbered freehold title are, at best, very unclear. Therefore, this Court is not really in a much better position than the High Court was 10 years ago when the validity of the covenant was unresolved. The appellant, however, is in a substantially worse position as its best-case scenario before Binchy J. is no longer available to it.

Pleadings

39. As noted, these proceedings were issued by way of special summons in July 2008 seeking enforcement of the arbitration award under s. 41 of the Arbitration Act 1954. Under s. 41, if the Court grants leave, an arbitration award may be enforced in the same manner as a judgment and judgment may be entered in the terms of the award. In circumstances where non-payment of the award was due to a dispute as to whether the appellant had proved its title, it is unsurprising that the Master of the High Court transferred the case to the judge’s list rather than granting summary judgment in the amount of the part payment claimed.

40. The points of claim filed (and subsequently amended) in response to Laffoy J.’s directions contended that the Smiths’ property, consisting of two small parcels of land, were physically separate from the vast majority of the retained lands and together comprise less than one third of an acre. Consequently, the appellant pleaded that they were too insignificant to support an action on the covenant and did not enjoy the benefit of it. Alternatively, the appellant pleaded that the covenant was personal to Wilson and did not bind his successors-in-title. There were other pleas relating to the use of the acquired lands as a roadway and whether this constituted the erection of a building in breach of the covenant which need not concern us further. The amended version of the points of claim seeks declarations, including one to the effect that even if the restrictive covenant were subsisting at the relevant date “the compensation payable… is not to be reduced thereby”.

41. DLRCC’s points of objection/defence/counterclaim reflect the stance it has maintained since the date of the arbitrator’s award. The award, it pleads, it is declaratory of the quantum of compensation but does not determine the right of the appellant to receive it nor the liability of DLRCC to pay that amount and that the pleas made regarding the restrictive covenant preclude the appellant from seeking enforcement of the award. A procedural plea is made to the effect that the issues regarding the effect of the restrictive covenant on the appellant’s title could not be determined in enforcement proceedings under s. 41 and would have to be determined in proceedings between the appellant and the Smiths. This has been overtaken by the institution and determination of the Smith proceedings. DLRCC formally counterclaimed seeking an order setting aside the arbitrator’s award on the basis that the appellant had been unable to prove an unencumbered freehold title on which its claim for compensation was based. Alternatively, it sought an order remitting the award to the arbitrator.

42. In a reply and a defence to the counterclaim, the appellant maintained the position that the restrictive covenant did not affect its lands, pleaded that as purchaser-in-possession over a lengthy period of time DLRCC was estopped from denying the appellant’s title, denied that the Smiths were entitled to any compensation and denied that DLRCC was entitled to an order either setting aside the arbitrator’s award or remitting the award to the arbitrator.

43. It is clear that much of what is pleaded in the 2008 proceedings is now moot as the validity and applicability of the restrictive covenant has been determined in the Smith proceedings in the Smiths’ favour. Nonetheless, there is still an issue between the parties as to whether the 2003 award can be enforced to any extent against DLRCC or whether it should be set aside and/or the matter remitted to an arbitrator. The emphasis in the argument before this Court shifted to two questions neither of which are expressly pleaded on the face of the pleadings as they stand but which, at least arguably, come within the scope of the pleaded case more generally. These are whether the restrictive covenant, accepting its validity and applicability, had any effect on the value of the appellant’s lands in 2000 and whether the restrictive covenant can now be removed from the title with retrospective effect back to the reference date. If the 2008 proceedings are now to be litigated, substantial updating and amendment of the pleadings will be required to ensure that the issues before the Court reflect the real issues between the parties.

Grounds of Appeal

44. The appellant’s grounds of appeal have also been overtaken in large part by the outcome of the Smith proceedings. The appeal is premised on the same contention inherent in the Notice of Motion, i.e. that the land was valued at €12.8 million on the reference date so that even if the Smiths’ claim based on the restrictive covenant was worth the €5.8 million claimed, there is an undisputed sum of some €7 million which should be paid immediately to the appellant having regard to the fact that DLRCC took possession of the land in 2001. The Constitution and the European Convention on Human Rights are invoked in support of the appellant’s property rights and it is contended that the trial judge failed to apply the relevant jurisprudence in this regard. The appellant contends that the trial judge incorrectly applied the test for a mandatory interlocutory injunction and erred in finding that the appellant had not satisfied the test. Further, it is pleaded that in the context of an interlocutory application the trial judge made inappropriate comments or findings regarding the valuation of the land in the event that the appellant could not prove its title and/or the need for the appellant to submit its claim for compensation afresh.

45. I will deal briefly with this last issue. The High Court judgment does indicate, at a number of points, that the appellant would face very significant difficulties if it failed in its proceedings against the Smiths, as has now transpired. At para. 21 the judgment observes that if the lands were subject to the restrictive covenant “then there is no valuation of the plaintiff's interests in the lands which can be enforced as against the defendant because it is absolutely clear that the valuation of the property arbitrator of 12th November, 2003 is a valuation of the lands acquired on the basis that the restrictive covenant does not affect the same”. At para. 40 the judgment states that even if the appellant were to reach an agreement with the Smiths to release the covenant “this would not overcome the problem of determining whether or not the interest of the plaintiff was subject to such a restriction as of the date of the notice to treat, which of course is the date on which the plaintiff's interest in the lands must be valued for the purpose of determining compensation”.

46. At para. 41 the judgment observes that if the applicability of the restrictive covenant to the lands were established “then the determination of the property arbitrator of 12th November 2003 does not avail the plaintiff at all because there will then be no valuation of the plaintiff’s actual interest in the property as of that date. In that event it will be necessary for the plaintiff to submit its claim afresh reflecting its actual interest in the lands”. Finally, at para. 42 the judgment opines that if the lands were subject to a restrictive covenant which prohibited development “it seems likely that a strong argument can be made that this would have a significant impact upon the value placed upon the lands by the property arbitrator.” It is in that context the trial judge observed that payment out of the amount sought could result in a substantial overpayment to the appellant.

47. I am reluctant to be critical of the trial judge for making these observations. For the most part they reflect commonly accepted principles relating to property arbitration. Further, the application before the High Court was couched in terms which focused on the applicability or non-applicability of the restrictive covenant, not on the circumstances which now prevail in which the Court is asked to consider the consequences of its application. Since 2002 the applicant had been consistent in its stance that the restrictive covenant did not apply to its lands and that it would be able to prove the title claimed. Its formal position, both when DLRCC sought to reopen the arbitration and in the exchange of correspondence thereafter, was always that if it could not prove the title claimed, then it would not be able to enforce the award, at least not without returning to the arbitrator. Thus, the High Court judge’s remarks are consistent with the position which the appellant had adopted up to that point.

48. Clearly all of the trial judge’s observations were contingent as they depended on the outcome of the Smith proceedings regarding the validity of the restrictive covenant. In circumstances where the appellant has lost on that issue, its stance has now materially changed. I appreciate that it regards those observations as unhelpful to the case it now wishes to make. However, I do not regard the trial judge’s observations as precluding the appellant advancing the very different case it now appears to intend to make in the substantive proceedings. It is a case which, on many levels, challenges the accepted orthodoxy and thus the appellant will have to establish that the various observations made by the trial judge are not correct. I offer no view as to whether it will succeed in doing so save that I see nothing in the trial judge’s interlocutory judgment which would preclude a Court accepting the appellant’s arguments after a full hearing of the substantive case.

Jurisdiction to Order Part Payment of An Arbitral Award

49. There are two preliminary legal issues, the resolution of which is very much tied up with the appropriateness of making a payment out in the particular circumstances. The first of these is the jurisdiction of the Court to make such an order, a matter strenuously disputed by DLRCC. The trial judge did not find it necessary to decide this issue in circumstances where he felt that the criteria by reference to which such an order could be made had not, in any event, been met. The second concerns the test the trial judge applied at para. 45 of his judgment, i.e. that the appellant had not met the test for granting a mandatory interlocutory injunction. I note that para. 45 starts with the trial judge saying that he was “also satisfied” that this test had not been met which suggests that this was a secondary or additional finding to those made in the preceding paragraphs of his judgment. Nonetheless, the appellant takes strenuous issue with the application of the test applicable to mandatory interlocutory injunctions arguing that its application was for payment out of part of a liquidated sum which should have been dealt with under the rules applicable to summary judgments. I will return to this point.

50. In its supplemental written submissions, the appellant relies on three cases under the heading “The (lack of) authority for directing a part payment”. These are Abbey International Finance v. Point Ireland Helicopters [2012] 2 IR 694; Shawl Property Investments v. A and B [2021] IECA 53 and Ulster Bank Ltd v. Quirke [2022] IECA 283. DLRCC, in my view, correctly disputes the relevance of these cases to the actual issue between the parties.

51. In Abbey International Finance, plenary proceedings seeking an unliquidated sum in damages, Kelly J. recognised that despite the lack of any provision in the Rules of the Superior Courts, the High Court had inherent jurisdiction to grant relief on a summary basis to a plaintiff where the defendant had no real or bona fide defence to the claim. In Shawl, where the parties did not dispute the existence of such inherent jurisdiction, at para. 45 of her judgment Whelan J. observed that the implications of this argument and the “nature, extent and scope of any such jurisdiction” would likely fall to be considered in another case. In Quirke, the Court of Appeal (Binchy J.) held that the assignee of part of a judgment debt could be given leave to execute.

52. None of these cases are of assistance as none of them deal with the precise issue before the Court, namely whether the Court has jurisdiction to order payment out of part of an arbitral award in circumstances where the respondent has raised a bona fide and substantial defence to the proceedings seeking to enforce the award under s. 41. Even accepting that the trial judge’s comments cannot be determinative of the issues between the parties in the substantive proceedings, there is undoubtedly a real issue as to whether an award premised on the valuation of the appellant’s freehold interest in the property unencumbered by the restrictive covenant can be enforced now that it has been established that the restrictive covenant did apply such that the appellant cannot establish the title upon which its claim was valued. The underlying premise on which Kelly J. reached his conclusions in Abbey International Finance – an unmeritorious defendant deliberately delaying the plaintiff’s recovery of monies which were undoubtedly owed – has no resonance in this case. DLRCC brought the appellant’s and the arbitrator’s attention to the potential effect of the restrictive covenant on the valuation of the appellant’s interest in the CPO lands before the award was made and invited the arbitrator to make alternate awards pending resolution of the legal issue as to its application. The appellant refused to countenance this suggestion. Thus, the fact the valuation is premised on a title which does not reflect that which actually pertained is entirely due to the appellant. A defence based on the potential effect of the restrictive covenant on the value of property and the validity or enforceability of an award which does not take account of it is by no means unmeritorious.

53. In fairness to the appellant, most of the argument on this point at the hearing of the appeal centred on two cases referred to in DLRCC’s written submissions namely Nigerian National Petroleum Corporation v. IPCO (Nigeria) Ltd [2008] EWCA Civ.1157 (“NNPC”) and Danish Polish Telecoms v. Telekomunikacja Polska SA [2012] 3 IR 44. In the NNPC case, on an application to enforce an award in the UK the validity of which was under challenge in protracted proceedings in Nigeria, the Court of Appeal of England and Wales upheld the decision of the Commercial Court that there was no objection in principle to the enforcement of part of an arbitral award provided the part to be enforced could be ascertained on the face of the award and that judgment could be given in the same terms as the award.

54. The portion of the award in respect of which judgment was granted was described as the sum which was “indisputably due”. The judgment acknowledges both that there were discrete parts of the award capable of immediate enforcement and that the Nigerian Court had power on the substantive challenge to the award to sever it so as to preserve the “good” parts and set aside those parts which were “unsupportable”. Tuckey J. in the Court of Appeal regarded an “all or nothing” approach to the enforcement of an award as being “unnecessarily technical” and inconsistent with the purpose of the New York Convention which was to ensure the effective and speedy enforcement of international arbitration awards. Such an approach would, he said, “encourage unscrupulous parties to mount minor challenges to awards to frustrate their speedy and effective enforcement”. He stated at p.662 of the reported judgment: - “In these circumstances I think that the word "award" in this part of the [Arbitration Act 1996] should be construed to mean the award or part of it. To be enforceable it must be possible to enter judgment “in terms of the award” but in this case there is no difficulty about that as the exact correspondence between the award and the judgment shows. Put less formally if one were to ask whether enforcement of part of an award in accordance with its terms was enforcement of the award the answer would be “of course””.

55. Like NNPC, Danish Polish Telecoms also involved the enforcement in Ireland of a foreign arbitral award. The award of which enforcement was sought in this jurisdiction, which had been made in Vienna, was itself a partial award. In circumstances where the respondent had acknowledged in the course of the arbitration that money was due to the applicant, the applicant argued, relying on NNPC, that if the Court were to adjourn the enforcement application, as it did, it should make an order for enforcement of part of the partial award. Finlay Geoghegan J. declined to do this on the basis that although it was recorded by the arbitral tribunal as not being in dispute, the amount of which the appellant sought enforcement was not reflected in the order of the tribunal. Consequently, judgment in that amount could not be considered a judgment “in terms of the award” under s. 23(1) of the Arbitration Act 2010. Finlay Geoghegan J. noted that the dispositive part of the partial award “directs the payment of specified money sums under five separate headings” and stated that had the applicant sought an order for the enforcement of the specified amounts, she was satisfied the Court would have jurisdiction to grant leave to enter judgment for one or more of the amounts specified. She left open the question of whether an Irish Court should follow the NNPC approach and “look beyond the actual formal dispositive part of the award for payment of a total sum and to have regard to the summary specifying the individual amounts awarded”. As it was unnecessary to decide the issue, she left it for decision on an application where it was material to the facts.

56. I too have concluded that the jurisdiction of the Court to order part payment of an arbitral award which does not direct payment of discrete sums under discrete headings should be left for decision in another case where it squarely arises on the facts and that the trial judge was correct not to determine the issue in this case. The sum identified by the appellant in its Notice of Motion is predicated on a mathematical calculation which involves the subtraction of the value of the claim made by the Smiths to DLRCC (in 2009) from the total value of the award made by the arbitrator in 2003. It manifestly is not - and indeed could not have been - identified as a discrete sum due to the appellant in the formal dispositive part of the arbitrator’s award. I will explain further in the next section of this judgment why I do not regard the appellant’s assertion, on the basis of this mathematical calculation, that at a minimum it must be entitled to payment of the amount of the award less the value of the Smiths’ claim, as a sound basis on which to make a payment out.

57. DLRCC argues that there are differences between awards made in commercial arbitrations between private parties and the award made in an arbitration such as this which involves a public body exercising statutory functions. I agree that the Court must be cognisant of the fact that the award in this case has been made through the mechanism of a long-established statutory process in which it has always been regarded as essential that the landowner adduce the title on which its claim is based in order to be entitled to payment of compensation reflecting that title. Without shutting out arguments the appellant might wish to make in the substantive proceedings, it would be inappropriate for the Court to bypass the statutory regime and, on the premise that the appellant must be entitled to some compensation, to attempt to assess what portion of this award could be said to reflect that entitlement.

58. Further, DLRCC contends that under s. 41 leave to enforce an award can only be granted in the terms of the award and that the Court cannot be asked to parse an award into constituent parts when the arbitrator has not done so. This is consistent with the views expressed by Finlay Geoghegan J. in Danish Polish Telecoms insofar as her willingness to partially enforce an award was premised on the part to be enforced appearing as a discrete sum specified in the formal dispositive portion of the award.

59. The appellant argues that it has an undisputed right to compensation for the loss of its property which has been acknowledged by DLRCC. This is undoubtedly so but, as DLRCC points out, the compensation to which the appellant is entitled must, if not agreed, be determined pursuant to the statutory scheme which requires the value of that entitlement to be decided by a property arbitrator. In the absence of any indication on the face of the award of an undisputed amount to which the appellant would be entitled, the Court cannot assess at first instance the amount of compensation which the appellant should receive and which DLRCC should pay.

60. NNPC and Danish Polish Telecoms are authorities which strongly suggest, at least in the context of the international enforcement of arbitral awards between private parties, that the Courts do have an inherent jurisdiction to make interim orders for payment of part of an arbitral award. Whether this line of authority applies to awards made as a result of property arbitrations in this jurisdiction remains to be determined. However, I am satisfied that as a matter of principle this issue should not be determined in a case in which the appellant does not satisfy the criteria set out in those two cases which require it to be established that there is a sum which is indisputably due and is reflected in a discrete part of the award which is capable of immediate enforcement such as the direction to pay a specified sum of money under a specified heading.

Test to be Applied to Partial Payment of Award

61. The appellant’s grounds of appeal specifically take issue with para. 45 of the High Court judgment and contend that the trial judge incorrectly applied the test for mandatory interlocutory injunctive relief and also that he erred in finding the appellant did not meet such test. In response DLRCC contends that the relief sought in the appellant’s notice of motion, namely an order directing payment of some €7 million was, in substance, a form of mandatory injunction.

62. I have noted that the comments in para. 45 of the judgment are made after the trial judge had already reached a series of conclusions adverse to the appellant on other grounds without applying the impugned standard. Crucially, and consistent with the conclusions I have reached in the preceding section, at para. 43 of the judgment the trial judge rejects the appellant’s reliance on Danish Polish Telecoms because of its inability to establish an amount that is indisputably due by DLRCC under the award. He had previously acknowledged the likelihood of a significant dispute between the parties as to the value of the lands as of the date of the Notice to Treat which, in his view, raised issues too complex for the Court to resolve on an interlocutory application so as to reach a conclusion which would justify an order requiring DLRCC to make a significant payment to the appellant. Neither of these conclusions are predicated on the application of the test applicable to mandatory interlocutory injunctions, the potential application of which is simply considered as an additional ground for refusing the application at para. 45.

63. The test applicable to the grant of a mandatory interlocutory injunction was set out by the Supreme Court (Fennelly J.) in Maha Lingham v. Health Service Executive [2005] IESC

89 as follows: –

“The ordinary test of a fair case to be tried is not sufficient to meet the first leg of the test for the grant of an interlocutory injunction where the injunction sought is in effect mandatory… It is necessary for the applicant to show at least that he has a strong case that he is likely to succeed at the hearing of the action.”

64. This paragraph imposes an appreciably higher test for the grant of an interlocutory injunction where the relief sought is mandatory in nature than the test which applied to a grant of a prohibitory interlocutory injunction at the material time under Campus Oil Ltd v Minister for Industry and Energy (No.2) [1983] IR 88. Our understanding of the law has since been recalibrated and rephrased by the judgment of O’Donnell J. in Merck Sharp & Dohme v. Clonmel Healthcare [2020] 2 IR 1.

65. Although counsel for the appellant contended that his application was not for an interlocutory injunction, much less a mandatory interlocutory injunction, he nonetheless directed the Court to the series of steps outlined in para. 65 of the Merck judgment. The third of these suggest that if there is a fair issue to be tried, and that it probably will be tried, “the court should consider how best the matter should be arranged pending the trial, which involves a consideration of the balance of convenience and the balance of justice”. Taking this strand of the appellant’s argument at its highest, it is very difficult to see how either the balance of convenience or the balance of justice should require DLRCC to make a payment of over €7 million to the appellant on foot of an award made on the basis of a title which the appellant has, to date, been unable to prove. Although the adequacy of damages as a final remedy is no longer a threshold criterion for the grant of an interlocutory injunction, the fact that the claim is a purely monetary one such that damages should, in principle, be an adequate remedy certainly tips the balance of convenience against the making of an interlocutory order in circumstances such as these.

66. However, the appellant argues that the application should not have been treated as one for an interlocutory injunction at all, whether mandatory or prohibitory. Instead, it argues that the standard by reference to which its application should have been judged was that applicable to summary judgment. In other words, the Court should have started by asking itself whether DLRCC has an arguable defence to the appellant’s claim. In principle I accept that the application made in the Notice of Motion was not one for a mandatory interlocutory injunction. In fact, although the application was one made at a point in time when the substantive proceedings were still pending, it was not interlocutory in the sense that the relief was not intended to be temporary in nature pending the determination of the substantive proceedings. Instead, it was intended to secure the payment out – on a permanent and final basis – of part of an award. Consequently, I accept that the Maha Lingham test was not an appropriate one to apply. However, I do not think that the appellant has satisfied the test which it contends should have been applied either.

67. The appellant asserts that there is no defence to the enforcement of at least an element of the payment in circumstances where it was not disputed by DLRCC that it had to compensate the appellant for the compulsory acquisition of its property. The appellant asserts that at a minimum this would be the agricultural value of the lands which counsel claimed was some €3.5 million. In fact, there was no evidence before the Court which suggested that the agricultural value of the lands at the material time was €3.5 million. That figure appears to reflect the unconditional offer made by DLRCC prior to the commencement of the arbitration less the amount of the claim submitted by the Smiths, a calculation referred to in the course of correspondence by the appellant’s solicitor.

68. This argument overlooks a very important factor in this case. DLRCC has always acknowledged that it must compensate the appellant for the acquisition of its property. In default of agreement, the mechanism through which such compensation is calculated is a statutory one involving the valuation of the appellant’s claimed interest by a specialist property arbitrator. The obvious difficulty in this case is that the interest claimed by the appellant, an unencumbered freehold title, is not in fact the interest that it held at the material time. Consequently, the valuation exercise did not value the interest which the appellant actually held. In short, the appellant has been unable to prove the title that it claimed and no valuation has been conducted of the interest it held. In principle DLRCC is obliged to compensate it for the compulsory acquisition of its property but it does not follow that DLRCC is obliged to make a payment on foot of this particular award.

69. Legally, DLRCC contends that all of this means the award is unenforceable and should be set aside. It is unnecessary at this stage to express a view as to whether that defence will succeed, but it is undoubtedly an arguable defence and, moreover, for the reasons which I have just stated, it is one which relates to the entire of the award.

70. Thus, the appellant faces significant difficulties in succeeding in this application whether the standard be that applicable to summary judgment or a higher standard such as that applicable to the grant of a mandatory interlocutory injunction. In principle it is inappropriate to characterise an order directing payment out of a sum of money as a mandatory interlocutory injunction. Payment out in the manner sought would be intended to be a final order as regards the sum of money paid. It would be made on an interim basis pending the final determination of the proceedings but, in line with the case law discussed above, such an order should only be made where the sum of money to which it relates is not disputed either in terms of its quantum or the liability to pay it. However, this does not significantly avail the appellant. Even if the appropriate standard in such circumstances were that applicable to summary judgment, the applicant does not meet that standard either. Therefore, success on this ground of appeal has no bearing on the outcome of this appeal.

The Balance of the Appellant’s Case

71. The substance of the appellant’s case rested heavily on two arguments both of which are inconsistent with the approach adopted on behalf of the appellant at earlier stages of the arbitration and litigation process. Counsel appearing on behalf of the appellant quite frankly admitted that had he appeared at an earlier stage, he would not have made the concession that the appellant would be required to prove the title claimed in order to receive the compensation awarded by the arbitrator on the basis of that title. This is something of a startling proposition, but it was logically necessary in order to advance the particular arguments the appellant now wishes to make. These are twofold. Firstly, it is contended that the restrictive covenant has and had at the material time “zero effect” on the value of the lands. Second, it is contended that through the invocation of s. 50 of the Land and Conveyancing Law Reform Act 2009, which came into operation on 1st December 2009, the appellant will be able to retrospectively clear the restrictive covenant from its title.

72. In my view neither of these arguments are sufficiently clear-cut to warrant the making of a payment out on foot of the arbitrator’s award to the appellant at this stage. Looking firstly at the suggestion that the restrictive covenant had zero effect on the value of the lands, the appellant faces a significant difficulty in that no valuation of the lands with the restrictive covenant has yet been carried out. The appellant successfully resisted DLRCC’s proposal that the arbitrator value the lands on the alternate basis that the restrictive covenant did and did not apply. The argument made to and accepted by the arbitrator was that the arbitrator’s jurisdiction was to value the property based on the title claimed by the appellant and the appellant would then have to prove that title in order to receive the award. As noted, counsel now wishes to disassociate the appellant from the latter part of that argument.

73. Even if the appellant is correct in asserting that it is not obliged to prove the title that it claimed, it still faces a problem in that there has been no valuation of the title it actually held. The argument that the restrictive covenant has zero effect on the value of the property may or may not be found to be correct, but that assessment can only be made by a property arbitrator who has the jurisdiction to value the lands. Carrying out such a valuation at this stage, more than 25 years after the reference date, is bound to be a difficult and technical exercise. The Court cannot simply assume that that the restrictive covenant has no effect on the value of the lands nor is the Court in a position to value the lands without the restrictive covenant having neither the expertise nor the jurisdiction to do so. Issues as to the ambit and/or applicability of ss.48 or 49 of the Land and Conveyancing Law Reform Act 2009 may or may not arise for determination including in light of the original reference date or otherwise and nothing herein is to be taken to constitute a view thereon.

74. The appellant may well be able to establish to the satisfaction of a property arbitrator that, notwithstanding the apparent sterilisation of the lands by reason of the restrictive covenant, its effect on their value was not significant. However, the likelihood of the appellant establishing that the restrictive covenant had zero effect (as opposed to a small but insignificant effect) must be open to question, particularly when regard is had to the extent to which the appellant went to ensure that such valuation was not carried out in 2003.

75. The appellant relies on the decision of Brightman J. in Wrotham Park v. Parkside Homes [1974] 1 W.L.R. 798 in which it was held that damages could be awarded in lieu of an injunction for breach of a restrictive covenant and that such damages should be measured at the sum the dominant landowner could have reasonably demanded as a quid pro quo for the relaxation of the restrictive covenant had the developer applied to them for such relaxation. From the judgment it is clear that this sum is intended to be more than merely nominal damages as such would encourage developers to ignore such covenants, but also not equivalent to a ransom sum. By its nature a restrictive covenant is not something which a landowner would expect to have a commercial value which he could “turn to account”. The figure arrived at in the circumstances was 5% of the development value of the lands. Consequently, the argument seems to be that the Smiths’ claim for compensation from DLRCC should be measured at a similar level – and assuming that the appellant is correct that this should then be paid out of the total value attributed to its land without the restrictive covenant - it would still be entitled to 95% of the sum originally awarded.

76. DLRCC argues that the subsequent judgment in Wrotham Park Settled Estates v. Hertsmere Borough Council [1993] 2 EGLR 15 shows the 1974 Wrotham Park judgment to have been wrongly decided. It also contends that this line of case law which deals with such property rights on a private law basis, is of no relevance to the public law situation in this case. Whether or not Wrotham Park was wrongly decided in 1974, these cases do not provide much assistance.

77. The issue here is not the value of the restrictive covenant to the Smiths but the effect the fact the covenant attached to the appellant’s lands in 2000 had on the value of those lands. The value of the covenant may be much less than the Smiths’ claim and its effect on the value of the appellant’s lands may also be relatively small. The point is that the Court does not actually know this because no valuation has been carried out. If there is a difference in the value of the appellant’s land, then it follows that the 2003 award cannot be enforceable either at all or, at very least, without being remitted to an arbitrator for further valuation. If the former is the case, then the appellant’s proceedings under s.41 must fail. It is also arguable that the enforcement proceedings should fail if the award must be remitted and amended before being capable of enforcement. All of this will have a consequent effect on the appellant’s entitlement to interest. None of this can be decided on an interim application for payment out of part of the award.

78. The second argument relies on s.50 the 2009 Act, subs.1 of which provides as follows:

–

“A servient owner may apply to the court for an order discharging in whole or in part on modifying a freehold covenant (whether created before or after the commencement of this Chapter) on the ground that continued compliance with it would constitute an unreasonable interference with the use and enjoyment of the servient land.” Sub-section (3) allows for the payment of compensation to the dominant owner where the court is satisfied that compliance with an order discharging a restrictive covenant will “result in a quantifiable loss”.

79. This section undoubtedly provides a mechanism through which a restrictive covenant may be discharged by the Court in the absence of the consent of the owner of the dominant lands. In its terms, the section can be applied to covenants created before the enactment of the 2009 Act and, thus, it can in principle be invoked to apply for the discharge of a restrictive covenant created in 1947 or 1962. The Court was informed that shortly prior to the hearing of the appeal the appellant had instituted proceedings under s. 50, presumably against the Smiths, with a view to seeking such an order (“the s.50 proceedings”).

80. Without in any way seeking to predetermine the outcome of an application pending before the High Court involving parties who are not before this Court, any application under s. 50 in these circumstances is far from straightforward. To start with, s. 50 only came into effect after the enactment of the 2009 Act and therefore was not in effect as of the date of the Notice to Treat nor the date of the arbitration. Whilst on its face the section is applicable to restrictive covenants created before the commencement of the relevant chapter, it is by no means clear that the discharge of a restrictive covenant now would operate retrospectively, much less retrospectively back to a date prior to the enactment of the 2009 Act. An order discharging a covenant so that it ceases to apply is materially different to an order declaring that it had no prior application.

81. There are other practical problems. Assuming that the appellant has sufficient locus standi as servient owner of the CPO lands in circumstances where the conveyancing process has not been completed, it is still required to establish that continued compliance with the restrictive covenant would constitute an unreasonable interference with the use and enjoyment of servient land of which it is (i.e. as of the date of the s.50 application) no longer in de facto possession. Thus, the appellant must succeed in persuading a Court that not only does it have locus standi to make an application under s. 50, but that the use and enjoyment of the CPO lands, which now comprise a motorway, are being unreasonably interfered with by the continued existence of the restrictive covenant. Obviously different arguments will apply to the balance of the appellant’s lands which I understand are also the subject of the s.50 application. However, I do not think it can be said that this application is so clearly likely to succeed as regards the CPO lands, that the Court should at this stage treat the appellant’s title subject to the restrictive covenant as being equivalent to the unencumbered freehold title claimed.

82. The last aspect of the appellant’s argument which I propose to address here reflects the rationale underlying the application for part payment of €7 million in the first place. The award made by the arbitrator was for €12.85 million. The claim made by the Smiths is for €5.85 million. The difference between these two sums is the €7 million of which the appellant seeks payment out. The appellant’s rationale is that, at a minimum, the €7 million the subject of this application reflects the full value of the lands less the maximum value of the Smiths’ claim. This argument is premised on the assumption that the value of the encumbered lands plus the value of the restrictive covenant to the Smiths must necessarily amount to the value of an unencumbered freehold title.

83. I do not think that the Court can proceed on the basis of a simple mathematical calculation of this nature. There is simply no valuation evidence before the Court which supports the contention that the difference between the value of an unencumbered freehold title and a freehold title subject to a restrictive covenant which sterilises it for development purposes cannot be more than the value of the benefit of that covenant to the owners of the dominant lands. A very significant element of the value attributed to these lands arose from their status as development lands with a zoning for industrial use. The restrictive covenant which sterilised the lands and precluded the erection of any buildings thereon could have a material impact on their value regardless of the zoning status. There is not necessarily a logical connection between the value of the quiet enjoyment of Priorsland House (which the covenant was designed to protect) and the speculative value of development lands in a rapidly expanding suburban area. Again, the appellant may well be correct as to the effect the restrictive covenant had on the value of the lands at the material time, but it would be inappropriate for the Court to accept that this is the case in the absence of a valuation of the lands subject to the covenant.

84. In the course of his oral argument counsel for the appellant submitted that its interest in the lands should be treated as having been converted into a fund pursuant to the Land Clauses Consolidation Act 1845. I must confess to some difficulty in following the appellant’s argument on the 1845 Act, which does not appear to have been made before the High Court and is not included in the written submissions. Under s.76 of the 1845 Act where the owner of lands which have been subject to a CPO fails to make out the title claimed, the promoters of the undertaking (in this case DLRCC) may deposit the purchase money in respect of such lands in a bank account under the supervision of the Courts. Under s.78, any party making a claim to the money so deposited may make a summary application to Court for payment out of the deposited monies and, crucially for the purposes of the appellant’s argument, the Court may make such an order in respect of the entirety or “any part thereof”.

85. Part of my difficulty in following this argument is that there was no evidence before the Court that DLRCC had deposited a sum of money equivalent to the arbitrator’s award in Court under s.76. The section appears to be permissive, i.e. “it shall be lawful for” such monies to be deposited but does not appear to require monies to be lodged in Court in all cases where the purchaser refuses to accept compensation or fails to make out title to the lands. In circumstances where the mechanism does not appear to have been invoked – and certainly there is no evidence before the Court that it was – the statutory provisions relating to payment out of the fund appear to be irrelevant.

Conclusions

86. In summary, the various arguments raised by the appellant do not avail it in the context of an application seeking payment out of part of the arbitrator’s award. The appellant’s proceedings under s. 41 seek to enforce the award of the arbitrator which was made in November 2003. DLRCC’s defence to those proceedings is to contend that the entire award is unenforceable because it is predicated on a title which the appellant has failed to prove. As things stand the appellant was not and is not currently in a position to prove the title that it claimed in 2000. It may be able to resolve its difficulties but faces a number of serious obstacles in seeking to do so.

87. It is doubtful that the Court has jurisdiction to order payment of part of an arbitral award when that part is not identifiable on the face of the award, much less in the formal dispositions made therein (see discussion of Danish Polish Telecoms at paras. 55 – 60 above). There are also questions as to whether jurisdiction exists to make such an order in respect of an award made through a statutory process such as the one applicable here. DLRCC argues, with considerable force, that in the context of a statutory scheme such as this, jurisdiction to direct partial payment of an award must be grounded in the terms of the scheme itself. The appellant has been unable to point to any statutory provision which supports the existence of the claimed jurisdiction. Even if such jurisdiction exists (and we make no finding that it does) it could only ever be exercisable in truly exceptional circumstances. The only such circumstance invoked here is the length of time which has passed since the date of the de facto acquisition of the lands by DLRCC without any payment having been received by the appellant. Unfortunately for the appellant, as the difficulties it now faces were squarely brought to its attention in 2003 and most of the intervening time has been absorbed with its ultimately unsuccessful contention that the restrictive covenant did not apply, it is largely responsible for this delay.

88. It is clear that the appellant wants these issues to be resolved without the existing award being remitted to the arbitrator or it being required to make a fresh application for compensation based on the title it actually held. Presumably, it has adopted this stance in order to preserve its claim for interest on the award of compensation made in 2003. Indeed, both sides have adopted entrenched positions and both positions carry a significant element of risk if the other side should prevail. Given the complexity and range of the issues in dispute between the parties, by any standards it would be singularly inappropriate for the Court to make an order directing payment of over 50% of the disputed award to the appellant at this stage.

89. In the circumstances the appellant’s appeal is refused.

90. As DLRCC has been successful in its defence of this appeal, it seems to me that the appropriate order for costs is an order for costs in its favour and against the appellant. In suggesting such an order, I am conscious that the appellant could be said to have succeeded on one of its grounds of appeal (i.e. whether the application was subject to the test for a mandatory interlocutory injunction). However, for the reasons set out at paragraph 49 and between paragraphs 66 – 70 of this judgment, success on that ground was of no benefit to the appellant in circumstances where it failed to persuade the Court that it had satisfied the test which it said applied. Given that the appeal was heard in a single day, no additional costs were incurred by reason of this ground of appeal being resisted by DLRCC. If the appellant wishes to contend for a different order, it has leave to file written submissions on costs (not to exceed 1,500 words) within 21 days of the date of this judgment and DLRCC will have a similar period within which to reply in similar terms.

91. Further, as the appellant was correct in saying that this was not an interlocutory application, there does not seem to be any reason why payment of those costs should be stayed until the determination of the substantive proceedings. Again, if the appellant wishes to contend that the costs order should be stayed, it has leave to file written submissions on the issue (not to exceed 1,500 words) within 21 days of this judgment and DLRCC has a similar period within which to reply.

92. This judgment has been read in advance of its delivery by my colleagues Whelan and Hyland JJ. who have indicated their agreement with it and with the orders proposed.