Kerr v NIHE
| Jurisdiction | Northern Ireland |
| Judge | Coghlin LJ,Mr Spence |
| Judgment Date | 10 January 2013 |
| Neutral Citation | R/37/2010 |
| Court | Lands Tribunal (Northern Ireland) |
| Date | 10 January 2013 |
LANDS TRIBUNAL FOR NORTHERN IRELAND
_______
The Lands Compensation (Northern Ireland) Order 1982
Local Government Act (Northern Ireland) 1972
______
IN THE MATTER OF A REFERENCE - R/37/2010
BETWEEN:
JOEL KERR - CLAIMANT
-and-
NORTHERN IRELAND HOUSING EXECUTIVE – RESPONDENT
ATTORNEY GENERAL FOR NORTHERN IRELAND
AND
DEPARTMENT OF FINANCE AND PERSONNEL INTERVENING
_______
RE: 98 MOLTKE STREET, BELFAST
________
LANDS TRIBUNAL – THE RIGHT HONOURABLE LORD JUSTICE COGHLIN
AND
MR HENRY M SPENCE MRICS Dip Rating.
________
[1] This is a reference by Mr Joel Kerr (“the applicant”) to the Tribunal requiring
the Tribunal to fix the amount of compensation payable to the applicant in
accordance with the provisions of the Local Government Act (Northern Ireland) 1972
(“the 1972 Act”) and Article 6(1) of the Land Compensation (Northern Ireland)
Order 1982 (“the 1982 Order”) in respect of the vesting of the applicant’s property at
98 Moltke Street, Belfast (“the property”) by the respondent. The applicant
commenced this reference as a personal litigant but he has subsequently been
represented by Mr Michael Humphries QC while Mr Patrick Good QC and Mr Sean
Doran appeared on behalf of the respondent. During the course of the proceedings
the Tribunal gave leave for Mr John Larkin QC, the Attorney General for Northern
Ireland, and the Department of Finance and Personnel, represented by Dr
McGleenan QC, to intervene. The Tribunal wishes to acknowledge the considerable
assistance that it has derived from the well marshalled written and oral submissions
of counsel and it is grateful, in particular, to the Attorney General whose detailed
analysis of the relevant European jurisprudence has been of considerable assistance
in illuminating that legal dimension in the course of these proceedings.
Background facts
[2] The applicant is 30 years of age and he has enjoyed secure employment
during the whole of his adult life. He purchased the property, when he was
approximately 25, for £152,500 the purchase being funded, initially, with an interest
only 25 year term mortgage provided by the First Trust Bank. The mortgage was
guaranteed by the applicant’s father and subsequently converted to a variable
mortgage. The purchase was completed in February 2007 and the applicant was
required to make repayments of £589 per month. The applicant resided in the
property as owner-occupier from February 2007 until June 2011 when he moved to
private rented accommodation in respect of which he pays rental in addition to the
mortgage repayments.
[3] In or about April 2008 the applicant became aware of the possibility that the
property might be vested by the respondent for redevelopment. On 9 February 2010
the respondent applied for a Vesting Order and the applicant received formal
notification of the making of the Vesting Order by letter dated 18 March 2010. The
operative date of the Vesting Order was 19 April 2010.
[4] Since the operative date of the Vesting Order the applicant has continued to
make monthly repayments of £589.11 to the First Trust Bank. From the date of the
Vesting Order until June 2011, when the applicant vacated the property, the
applicant paid a nominal monthly rent to the respondent of approximately £15 per
week. The applicant’s outstanding mortgage debt on 29 April 2012 was £145,665.61.
The applicant remains liable to continue to make repayments of £589 per month to
the First Trust Bank for the next 20 years.
[5] The applicant has been offered the sum of £91,000 by the respondent in
respect of compensation for his interest in the property based upon open market
value. In addition the applicant believes that he is entitled to a disturbance payment
of £800 and an additional payment amounting to 10% of the above compensation
amount. Thus, in total, the claim in respect of compensation would amount to
approximately £100,900. The payment of such a figure would result in a shortfall of
approximately £45,000 which the applicant, currently, remains liable to discharge in
accordance with the terms of the mortgage. The applicant claims that such a degree
of debt is likely to preclude him from being able to purchase an equivalent property
in the current market and may prevent him from purchasing his own home during
the remainder of the mortgage term. Should the applicant default in making the
mortgage repayments both he, and his father as guarantor, face the risk of
proceedings for recovery at the hands of the bank involving, ultimately, the
possibility of bankruptcy. It seems that the vast majority of the 538 homes affected
by the compulsory scheme are likely to be in “positive equity” as a consequence of
vesting and that a residual mortgage debt, after payment of compensation, has
resulted/ is likely to result in the cases of only some 54 landlords and 6 owner
occupiers.
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