Property I
Cases
Article 26 of The Constitution In the Matter of the Health Bill
Articles 40.3.2 and 43
The Court now turns to what it considers to be the core issues which arise from the submissions of counsel concerning the constitutionality of the Bill. These concern the nature of the existing rights of persons entitled to recover charges unlawfully paid and the justification of the State for delimiting those rights. In their submissions counsel assigned by the Court also argued that such legislation would be specially objectionable insofar as it purported to interfere with vested rights. They cited the judgment of O’Higgins C.J. in Hamilton v Hamilton [1982] IR 466 at 474:
“Retrospective legislation, since it necessarily affects vested rights, has always been regarded as being prima facie unjust.”
Henchy, Griffin and Hederman JJ. agreed with the conclusions of the Chief Justice. Henchy J. added at p. 484:
“The judicial authorities (which are mentioned in the judgment which the Chief Justice has just delivered) make clear that, because there is a presumption that a statute does not intend to operate unfairly, unjustly or oppressively by trenching on rights or obligations lawfully acquired or created before the statute came into force, it should be construed as prospective in its application and not retrospective, unless there is a clear and unambiguous intention to the contrary expressed, or necessarily implied, in the statute, or unless the change effected by the statute is purely procedural”.
These two statements concern only the approach of the common law to the interpretation of retrospective legislation. The topic was further considered by this Court in Minister for Social Welfare –v- Scanlon [2001] 1 IR 64. Fennelly J., speaking for a unanimous Court, referred to the need “to segregate the two issues, namely the correct approach to the interpretation of statutes with potential retrospective effect in accordance with common law principles and the interpretation of provisions with such effect in the light of the Constitution.” In the case of this Reference, it is not suggested that any particular issue of interpretation arises. It is acknowledged that subsection (5) has the retrospective effect of deeming the past collection and payment of charges to be lawful and that that will deprive the affected persons of the right to restitution. Indeed, that is its acknowledged purpose. The relevance of the Hamilton case is, therefore, its repetition of the presumption that retrospective legislation which affects vested rights is prima facie unjust. The relevance of the Scanlon case is that retrospective legislation is not necessarily unjust. In that case, the defendant had received disability benefits over a number of years, although he had been working during that time. At the time of payment of the benefits, there was no provision for their recovery. An amendment was introduced with retrospective effect. The constitutionality of the provision was not challenged, but it was submitted that it should, to be compatible with the Constitution, not be construed so as to have retrospective effect. This submission was rejected, except in one respect, on the ground that there was no identifiable constitutional right to retain benefits which had been wrongly obtained.
The nature of the property right enjoyed by patients affected by subsection (5) has already been analysed as being a chose in action. It is now necessary to consider the constitutional provisions protecting the rights of private property.
Under the heading, “Private Property” the Constitution contains the following Article:
Article 43
1. 1° The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2° The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.
Article 40, s. 3 of the Constitution provides:
3. 1° The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2° The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
As was stated by Keane C.J. delivering the judgment of the Court in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 at p. 347, “the interpretation of these Articles and, in particular, the analysis of the relationship between Article 40.3.2 and Article 43 have not been free from difficulty”. A comprehensive discussion of evolving jurisprudence on this subject is contained in Hogan and Whyte J. M. Kelly: The Irish Constitution (4th Ed., Lexis Nexis Butterworths, Dublin, 2004, pp. 1978 to 1993). The learned authors conclude, at p. 1993, that “when considering constitutional protection of property rights, these Articles mutually inform each other”. Keane C.J., in the judgment mentioned, recalled, firstly, the statement of O’Higgins C.J. delivering the judgment of the Court in Blake –v- Attorney General [1982] IR 117 at p. 135:
“Article 43 is headed by the words “private property.” It defines… the attitude of the State to the concept of the private ownership of external goods and contains the State’s acknowledgement that a natural right to such exists, antecedent to positive law, and that the State will not attempt to abolish this right or the associated right to transfer, bequeath and inherit property. The Article does, however, recognise that the State “may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.” It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading “personal rights” and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property”.
Keane C.J. proceeded, however, to suggest some modification of the approach adopted in Blake. He said, at p. 348:
It is clear, particularly when the later decisions of the court are examined, that this approach cannot now be adopted without at least some reservations. It is no doubt the case that the individual citizen who challenges the constitutional validity of legislation which purports to delimit or regulate the property rights undertakes the burden of establishing that the legislation in question constitutes an unjust attack on those rights within the meaning of Article 40. It is also possible to envisage an extreme case in which the Oireachtas by some form of attainder legislation purported to confiscate the property of an individual citizen without any social justification whatever. In such a case, no inquiry would be called for as to whether the legislation also conformed to the requirements of Article 43. The challenge typically arises, however, as it has done here, in circumstances where the State contends that the legislation is required by the exigencies of the common good. In such cases, it is inevitable that there will be an inquiry as to whether, objectively viewed, it could be regarded as so required and as to whether the restrictions or delimitations effected of the property rights of individual citizens (including the plaintiff in cases other than references under Article 26) are reasonably proportionate to the ends sought to be achieved.
That the provisions of Article 43 are relevant to the inquiry undertaken by the courts where they are considering a challenge to the constitutionality of legislation on the ground that it constitutes an unjust attack on the property rights of the citizen within the meaning of Article 40 was made clear in the subsequent decision of this court in Dreher –v- Irish Land Commission [1984] ILRM 94, which it will be necessary to consider at a later point.
In the case of Dreher –v- Irish Land Commission, mentioned in that passage, Walsh J., with the agreement of the other members of the Court, had expressed the opinion that “any State action that is authorised by Article 43 of the Constitution and conforms to that Article cannot by definition be unjust for the purposes of Article 40.3.2”. This statement was followed in several later cases, notably O’Callaghan –v- Commissioners of Public Works, [1985] ILRM 364 and Madigan –v- Attorney General [1986] ILRM 136 at p. 161. It remains a correct statement of the close relationship between the two Articles. It remains, of course, necessary to consider how the Court should interpret Article 43 and, in particular how it should exercise its own power of review of legislation, which the Oireachtas has enacted in accordance with its own views of necessary regulation of property rights in the interests of social justice and the exigencies of the common good.
In Tuohy –v- Courtney, [1994] 3 IR 1 this Court was concerned with a challenge to the constitutionality of a provision of the Statute of Limitations, 1957, proceeding, without necessarily deciding the point, on the basis that the right to litigate was a property right protected by the Constitution. It had been agreed that, “in legislating for time limits on the bringing of actions, [the Oireachtas] is essentially engaged in a balancing of constitutional rights and duties”. Finlay C.J., delivering the judgment of the Court, laid down a principle of general application when dealing with such legislation. He said, at p. 47:
“What has to be balanced is the constitutional right of the plaintiff to litigate against two other contesting rights or duties, firstly, the constitutional right of the defendant in his property to be protected against unjust or burdensome claims and, secondly, the interest of the public constituting an interest or requirement of the common good which is involved in the avoidance of stale or delayed claims.
The Court is satisfied that in a challenge to the constitutional validity of any statute in the enactment of which the Oireachtas has been engaged in such a balancing function, the role of the courts is not to impose their view of the correct or desirable balance in substitution for the view of the legislature as displayed in their legislation but rather to determine from an objective stance whether the balance contained in the impugned legislation is so contrary to reason and fairness as to constitute an unjust attack on some individual’s constitutional rights.”
The foregoing statement was followed by this Court in Iarnród Éireann & Anor –v- Ireland and the Attorney General [1996] 3 IR 321, a case concerning a challenge to the constitutionality of certain provisions of the Civil Liability Act, 1961, regarding concurrent wrongdoers, though the judgment of the Court is silent as to whether the rights of litigants in that context constituted property rights. Keane J., as he then was, had treated them as property rights in his High Court judgment. The same passage from Tuohy was applied by this Court in White –v- Dublin City Council [2004] 2 ILRM 509, also a case dealing with the constitutionality of a limitation period. Once more, the Court found it unnecessary, following the view of Finlay C.J., to determine whether the right to litigate constituted a property right. Implicit in the statement that there would be no material difference in the constitutional protection provided is the assumption that the Oireachtas may have been involved in deciding whether the principles of social justice required the regulation of the exercise of the property rights in question and whether their delimitation was therefore justified by the exigencies of the common good. Denham J., delivering the judgment of the Court, stated, at p. 531, that “striking a balance in the form of a limitation period is quintessentially a matter for the judgment of the legislator”. She went on to state that the passage from the judgment of Finlay C.J. “in effect restates………the presumption of constitutionality enjoyed by all acts of the Oireachtas”.
An important part of the analysis of justification for interference with constitutional property rights is the question of compensation. Reference has already been made to the statement of Keane C.J. in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 (at p. 352):
“There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property.”
That Reference concerned a form of taking of property with a measure of compensation. There have been cases where the Court has upheld interference with property rights without compensation. In O’Callaghan –v- Commissioners of Public Works [1985] ILRM 364 the Court did not consider that the absence of any provision for compensation for the making of a preservation order in respect of a public monument on the plaintiff’ s lands rendered the relevant legislation repugnant to the Constitution. The Court, in the judgment of O’Higgins C.J., pointed out, at p. 367, that “the order does not deprive the owner of his ownership nor of his rights to use the monument in any manner not inconsistent with it preservation”. It also pointed out that the plaintiff was aware of the limitation at the time of purchase and that what was involved was “a requirement of what should be regarded as the common duty of all citizens”. In Dreher –v- Irish Land Commission [1984] ILRM 94 this Court rejected a challenge to provisions of the Land Acts to the effect that compensation for land compulsorily acquired under that legislation was to be paid only in the form of land bonds, the value of which was liable to fluctuation. An examination of the facts of that case shows that, as the Court pointed out, the plaintiff received full compensation for the value of his land, that the bonds were issued at and intended to be kept at par and that, on the facts of the case, they had traded above par at a time when the plaintiff could have disposed of them. For these reasons, Keane C.J., in the judgment of the Court in Re Article 26 of the Constitution and the Planning and Development Bill, 1999, at p. 351, expressed the view that Dreher “should be regarded as one essentially decided on its own special facts”. Against these cases may be set the decision of this Court in Electricity Supply Board –v- Gormley [1985] IR 129, where a statutory power of the plaintiff to erect masts to carry electricity power lines across the defendant’s lands, though not a power to lop trees and branches, without payment of compensation, was held to be unconstitutional. In a number of cases also, there has been discussion of the appropriate level of compensation: see Blake –v- Attorney General [1982] IR 117 In Re Article 26 of the Constitution and the Housing (Private Rented Dwellings) Bill, 1981 [1983] IR 181; Dreher, already discussed. From a consideration of these and other decided cases, it is clear that, where an Act of the Oireachtas interferes with a property right, the presence or absence of compensation is generally a material consideration when deciding whether that interference is justified pursuant to Article 43 or whether it constitutes an “unjust attack” on those rights. In practice, substantial encroachment on rights, without compensation, will rarely be justified.
For the purposes of its consideration of whether the Bill or any provision thereof is repugnant to the Constitution, the Court is satisfied that the correct approach is: firstly, to examine the nature of the property rights at issue; secondly, to consider whether the Bill consists of a regulation of those rights in accordance with principles of social justice and whether the Bill is required so as to delimit those rights in accordance with the exigencies of the common good; thirdly, in the light of its conclusions on these issues, to consider whether the Bill constitutes an unjust attack on those property rights.
According to the text of Article 43, the private ownership of external goods is a “natural right”. For that reason, it is “antecedent to positive law”. It inheres in man, “by virtue of his rational being.” The former Supreme Court, in Buckley –v- Attorney General [1950] IR 67 recalled that these rights had “been the subject of philosophical discussion for many centuries”. But it did say that the constitutional guarantee meant that “man by virtue, and as an attribute of, his human personality is so entitled to such a right that no positive law is competent to deprive him of it……” The right to the ownership of property has a moral quality which is intimately related to the humanity of each individual. It is also one of the pillars of the free and democratic society established under the Constitution. Owners of property must, however, in exercising their rights respect the rights of other members of society. Article 43.2.1, therefore, declares that these rights “ought, in civil society, to be regulated by the principles of social justice”. The property of persons of modest means must necessarily, in accordance with those principles, be deserving of particular protection, since any abridgement of the rights of such persons will normally be proportionately more severe in its effects.
For the reasons already given, the Court is satisfied that patients upon whom charges for in-patient services were unlawfully imposed from and after 1976 and, a fortiori, after 2001, and who paid those charges were entitled, as of right, to recover those charges. The actions for recovery could be based upon the law of restitution already discussed. They might be based on the modern approach to the recovery of money paid under a mistake of law (see Rogers –v- Louth County Council [1981] IR 265). The action might take the simple form of a claim for the repayment of money had and received to the use of the plaintiff or a claim in equity for a declaration that certain monies were held in trust. The form of the action is immaterial for present purposes. What is clear is that the patients had a property right consisting of a right of action to recover the monies. While the Attorney General has not seriously contested the existence of this form of right, counsel on his behalf have advanced some arguments designed to cast doubt upon it. Firstly, it was said that the right was a mere statutory right, the right to the free provision of services, a right susceptible of change or amendment. This, in the view of the Court, does not address the nature of the property right. Because the statutory right existed, patients were entitled to receive the relevant services free of charge. This right persisted so long as s. 53(1) of the Act of 1970 remained unchanged, as it did. Secondly, it was said that the patients had, in fact, received the services. The same response is appropriate. The services should have been supplied on the express legal basis that they were free of charge. The charging was unlawful. Thirdly, it is said that, in many cases, the beneficiaries of any recovery will be the relatives, often the distant relatives of the patients, who, in many cases are now deceased. This argument does not address the legal character of a property right. The right in question is assignable and will devolve on the estates of deceased persons. In any event, the Bill does not seek to establish any scheme for distinguishing between meritorious and unmeritorious beneficiaries of recoupment claims. All are treated in the same way.
In contrast to the approach taken by counsel for the Attorney General, as outlined in the preceding paragraph, counsel assigned by the Court relied on the views expressed by the European Court of Human Rights in Pressos Compania SA –v- Belgium (1995) 21 EHRR 301. That case concerned retrospective Belgian legislation concerning claims for damages by a number of ship-owners as a result of alleged negligence of Belgian pilots. The Belgian Government claimed that, as a result of a decision of the Cour de Cassation, it found itself exposed to enormous unforeseen damages claims. Belgium adopted a law exempting the Belgian Government from liability for the negligence of pilots, with retrospective effect. The applicants had existing claims. The Court held that the interference with existing claims to be “a deprivation of property within the meaning……” of Article 1 of Protocol 1. It noted that the justification was “the need to protect the State’s financial interests……” Dealing with the proportionality of the interference, the Court stated that “the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation can be considered justifiable……only in exceptional circumstances.” (para. 38). Responding to reliance on financial considerations, it stated:
“Such considerations could not justify legislating with retrospective effect with the aim and consequence of depriving the applicants of their claim for compensation.
Such a fundamental interference with the applicants’ rights is inconsistent with preserving a fair balance between the interests at stake.”
While the Court does not rely on that case for its final conclusions, and although it has its own particular facts giving rise to issues to be resolved under the terms of the European Convention on Human Rights, it is nonetheless illustrative of the issues which can arise for courts when retrospective legislation affects the legal status of previous transactions.
As regards the issues arising in this Reference it bears repetition that the property rights to be abrogated in their entirety by the Bill belong to the most vulnerable members of society. While the extension of full eligibility to all aged seventy or over, regardless of means, in 2001 means that a number will not be of limited means, the reality is that a great many will still be among the poorest in our society. Whatever exceptions may exist, it is an undoubted fact that the Bill will affect very many people who are old, or poor or disabled, mentally or physically, or in many cases all of these. As already stated, persons so situated will almost certainly have had little or no capacity to understand their rights under the legislation or to protest at the unlawfulness of the charges. All of these elements will be relevant to a consideration of the grounds upon which the Attorney General justifies the legislation.
Although counsel for the Attorney General on occasions referred to the Bill as curative the Court does not consider that the Bill is simply a curative or remedial statute, insofar as its retrospective provisions are concerned. Curative statutes are those measures that will either ratify prior official conduct or make a remedial adjustment in an administrative scheme. They often are the result of previous court decisions which overrule certain administrative conduct. In these situations the legislature is simply correcting the statutory flaws or filling a gap in statutory authority which had not been considered necessary and which the Oireachtas could always have adopted. Curative statutes, in the classical sense, remove unintended flaws in existing legislation and help to give full effect to the legislative intent behind the initial or original legislation. It goes without saying that any such legislation must be in conformity with the Constitution but its purely curative or remedial nature is a factor to be taken into account in the consideration of any constitutional issue.
The situation which the Bill addresses is quite different. The original intent of the legislature is to be found in s. 53 of the Act of 1970, which expressly conferred on persons of full eligibility under the Health Acts the right to in-patient services without charge. In deeming the charges imposed contrary to the provisions of that section as lawful the Bill is not simply curative, since it goes directly contrary to the legislative intent of the initial legislation. It thereby seeks to alter the legal effect of completed transactions which had been conferred on them by an Act of the Oireachtas. This inevitably gives rise to considerations that differ from the simply curative or remedial legislation of the kind referred to above, particularly in respect of the rights of persons to recover monies paid for charges which were imposed on transactions contrary to the express intent of the Oireachtas.
Furthermore, for this reason it should be emphasised that it would be entirely inaccurate to characterise the recovery by persons of the monies which they paid in respect of the unlawful charges as anything in the nature of a windfall for such persons with a valid claim.
Justification Expense to the State
It is admittedly not possible to establish definitively the factual background to the legislation, although this judgment seeks to identify certain matters of fact on the basis of common sense. The basic proposition advanced on behalf of the State is clear and simple. It is that the cost to the exchequer of repaying all patients in the relevant category will be very great. It was not contended on behalf of the State that it is faced with a serious financial crisis. It was stated that, going back as far as 1976, some 275,000 patients would have received the relevant services. Taking into account the right of the State to limit its liability by reliance on the Statute of Limitations, it was said that the figure to be repaid for the past six years could be of the order of €500 million. Counsel assigned by the Court pointed out that the total budget for the health services for the current year is of the order of €11 billion, which was not contradicted by counsel for the Attorney General.
The Court accepts that, upon discovery of an unforeseen liability to reimburse patients in the relevant categories, the State may find itself faced with a significant additional financial burden. However, while it is the opinion of the Court that the financial burden on the State of making the relevant repayments is a substantial one, it is by no means clear that it can be described as anything like catastrophic or indeed that it is beyond the means of the State to make provision for this liability within the scope of normal budgetary management.
Counsel for the Attorney General has submitted, in reliance especially on Article 43 of the Constitution and of the judgment of this Court in Tuohy –v- Courtney [1994] 3 IR 1 that the Oireachtas, in enacting the Bill, was engaged in balancing complex economic and social considerations, a matter classically within legislative rather than judicial competence. Accordingly, the Court should be extremely slow to intervene. It should be recalled also that Keane C.J. wrote to similar effect in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 where, speaking of the presumption of constitutionality, he said at p. 358:
“It is peculiarly the province of the Oireachtas to seek to reconcile in this area the conflicting rights of different sections of society and that clearly places a heavy onus on those who assert that the manner in which they have sought to reconcile those conflicting rights is in breach of the guarantee of equality.”
In considering that argument, it is of prime importance to consider the extent of the interference with property rights proposed by the Bill. What it proposes is the extinction of the rights in question. All patients, from whom charges have been unlawfully collected, regardless of their circumstances, are simply to be deprived of any right to recover sums lawfully due to them. No relief against this effect is provided, discretionary or otherwise, in the Bill, though the Court was informed of the discretionary decision of the State to make ex gratia payments of €2,000 each to some 20,000 people. The absence of compensation is, in reality, the object of the legislation. This aspect of the case law is not, therefore, particularly relevant, except to show the exceptional nature of these aspects of the Bill.
In the view of the Court, such legislation cannot be regarded as “regulating” the exercise of property rights. It is straining the meaning of the reference in Article 43.2.1 of the Constitution to the “principles of social justice” to extend it to the expropriation of property solely in the financial interests of the State. This is not at all the type of balancing legislation which was in contemplation in Tuohy –v- Courtney, White –v- Dublin City Council [2004] 2 ILRM 509 or Iarnród Éireann & Anor –v- Ireland and the Attorney General [1996] 3 IR 321. All of these cases concerned legislation designed to reconcile the interests of different categories of people in society. The case of the Planning Bill, 1999 might be thought to present an alternative case of such reconciliation. However, that Bill was not designed to protect the financial interests of the State, but rather to provide land for housing for social reasons. Furthermore, there was provision for compensation. The Court does not exclude the possibility that, in certain cases, the delimitation of property rights may be undertaken in the interests of general public policy. However, the invocation of these Articles in circumstances where rights such as arise in this case, rights very largely of persons of modest means, are to be extinguished in the sole interests of the State’s finances would require extraordinary circumstances.
Moreover, it is evident from the terms of the Bill and the submissions on behalf of the Attorney General, that the persons who are affected by its retrospective provision are being required by the Bill to bear the consequential burden of the unlawful charges in order to protect the exchequer generally, or the health budget in particular, from that burden. The rationale for so doing, according to the submissions of the Attorney General, is that these were persons who actually benefited from the services in question. The Court does not accept this as a rational basis for requiring that class of person to bear the burden of the ultimate cost of the charges which were unlawfully imposed on them. Those persons are in no different position from all other persons who enjoyed a whole range of free statutory services or benefits under the Health Acts. The fact that they received a service to which they were freely entitled by statute is not a distinguishing feature. Their only distinguishing feature is that they were unlawfully charged for the service.
It is, in effect, for this reason that their property rights are being abrogated.
Where a statutory measure abrogates a property right, as this Bill does, and the State seeks to justify it by reference to the interests of the common good or those of general public policy involving matters of finance alone, such a measure, if capable of justification, could only be justified as an objective imperative for the purpose of avoiding an extreme financial crisis or a fundamental disequilibrium in public finances.
Having regard to the terms of the Bill and taking into account all of the submissions of counsel, nothing has emerged in the course of the Reference from which the Court could conclude that the abrogation of the property rights in question is an imperative for the avoidance of an extreme financial crisis or a fundamental disequilibrium in public finances.
For the reasons set out above the Court is satisfied that subsection (5) and the associated provisions of the Bill constitute an abrogation of property rights and an unjust attack on them contrary to the provisions of the Constitution and in particular Articles 43 and 40.3.2..
Having regard to the conclusion expressed in the immediately preceding paragraph, it is unnecessary to consider any argument based on the principle of proportionality. It is also not necessary to consider the arguments related to Article 40.1 and Article 34. The Court does not consider that any issue arises concerning subsection (8) of s. 53 of the Act of 1970 as inserted by s. 1(b) of the Bill.
Decision of the Court pursuant to Article 26
The prospective provisions of the Bill, that is to say those provisions which require the imposition of charges for in-patient services to be provided in the future, concern matters for which the Oireachtas has power to legislate. The power to regulate and impose such charges delegated to the Minister by s. 1(a) of the Bill falls within the principles and policies of the Bill and, in the view of the Court, is compatible with Article 15.2.1 of the Constitution. Having regard to the maximum level of charges and the discretionary provision concerning the imposition of charges in individual cases, the Court does not consider that those charges, either in principle or in themselves, could be considered an infringement of any constitutional right.
The retrospective provisions of the Bill are those which abrogate the right of persons, otherwise entitled to do so, to recover monies for charges unlawfully imposed upon them in the past for the provision of certain in-patient services.
The practice which gave rise to the imposition of such charges was not one which was followed simply in the absence of lawful authority but was one which was contrary to the express provisions of s. 53(1) of the Health Act, 1970 by virtue of which the Oireachtas has decreed that the in-patient services in question be provided without charge. The recovery of such monies thus unlawfully charged by those entitled to do so could not properly be characterised as a ‘windfall’.
The Court considers that the right to recover monies for the charges thus imposed is a property right of the persons concerned which is protected by Articles 43 and 40.3.2 of the Constitution from, inter alia, unjust attack by the State.
The Constitution, in protecting property rights, does not encompass only property rights which are of great value. It protects such rights even when they are of modest value and in particular, as in this case, where the persons affected are among the more vulnerable sections of society and might more readily be exposed to the risk of unjust attack.
For the reasons expressed in this judgment the Court has decided that the retrospective provisions of the Bill contained in s. 1(b) which provide for the insertion of subsections (5), (6) and (7), and subsection (11) insofar as it defines “relevant charge”, in s. 53 of the Act of 1970, are repugnant to the Constitution and in particular Articles 43 and 40.3.2 thereof.
Buckley and Others (Sinn Fein) v. Attorney General and Another.
[1950] I.R. 81
O’Byrne J.
Article 6 provides that all powers of government, legislative, executive and judicial, derive, under God, from the people, and it further provides that these powers of government are exercisable only by or on the authority of the organs of State established by the Constitution. The manifest object of this Article was to recognise and ordain that, in this State, all powers of government should be exercised in accordance with the well-recognised principle of the distribution of powers between the legislative, executive, and judicial organs of the State and to require that these powers should not be exercised otherwise. The subsequent articles are designed to carry into effect this distribution of powers.
Articles 15 to 27, inclusive, deal with the exercise, through the Oireachtas, of the legislative powers of the State; Art. 28 provides for the establishment of a Government to exercise the executive powers of the State, and Arts. 34 to 37, inclusive, provide for the establishment of Courts and the appointment of Judges to exercise the judicial powers of the State. At the commencement of the latter set of Articles it is provided, by Art. 34, that justice shall be administered in Courts established by law by Judges appointed in the manner provided by the Constitution. This seems to us to contemplate and require that justice shall be administered in such manner and not otherwise. Counsel for the Attorney General relied upon the distinction between the latter Article and Art. 64 of the Constitution of Saorstát Eireann; but we are of opinion that when regard is had to Art. 6 there is no substantial distinction.
Article 40 deals with the fundamental right of the citizens of the State. In clause 3, 1, of that Article, the State guarantees in its laws to respect, and, as far as practicable, to defend and vindicate the personal rights of the citizen and, in the next succeeding clause (viz., 3, 2), it is provided that the State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen. It is clear, from the latter clause, that rights of property are included amongst the personal rights which, by the former clause, the State guarantees to respect, defend and vindicate.
The Article upon which the argument before us principally turned is Art. 43, which deals with private property. The Article provides as follows:”
“1. 1 The State acknowledges that man, in virtue of his rational being, has the natural right antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath and inherit property.”2. 1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
We do not feel called upon to enter upon an inquiry as to the foundation of natural rights or as to their nature and extent. They have been the subject-matter of philosophical discussion for many centuries. It is sufficient for us to say that this State, by its Constitution, acknowledges that the right to private property is such a right and that this right is antecedent to all positive law. This, in our opinion, means that man by virtue, and as an attribute, of his human personality is so entitled to such a right that no positive law is competent to deprive him of it and we are of opinion that the entire Article is informed by, and should be construed in the light of, this fundamental conception. Consistently with, and as an adjunct to, this recognition, the Constitution proclaims (1) that in a civil society, such as ours, the exercise of such rights should be regulated by principles of social justice, and (2) that, for this purpose, the State may pass laws delimiting the exercise of such rights so as to reconcile their exercise with the requirements of the common good.
It was contended by counsel for the Attorney General that the intendment and effect of Art. 43, 1, 2, was merely to prevent the total abolition of private property in the State and that, consistently with that clause, it is quite competent for the Oireachtas to take away the property rights of any individual citizen or citizens. We are unable to accept that proposition. It seems to us that the Article was intended to enshrine and protect the property rights of the individual citizen of the State and that the rights of the individual are thereby protected, subject to the right of the State, as declared in clause 2, to regulate the exercise of such rights in accordance with the principles of social justice and to delimit the exercise of such rights so as to reconcile their exercise with the exigencies of the common good.
Clause 2 of this Article introduces a principle of paramount importance. It recognises in the first instance, that the exercise of the rights of private property ought, in a civil society such as ours, to be regulated by the principles of social justice and, for this purpose, (i.e. to give effect to the principles of social justice) the State may, as occasion requires, delimit by law the exercise of such rights so as to reconcile their exercise with the exigencies of the common good. In particular cases this may give rise to great difficulties. It is claimed that the question of the exigencies of the common good is peculiarly a matter for the Legislature and that the decision of the Legislature on such a question is absolute and not subject to, or capable of, being reviewed by the Courts. We are unable to give our assent to this far-reaching proposition. If it were intended to remove this matter entirely from the cognisance of the Courts, we are of opinion that it would have been done in express terms as it was done in Art. 45 with reference to the directive principles of social policy, which are inserted for the guidance of the Oireachtas, and are expressly removed from the cognisance of the Courts.
Article 15, 4, of the Constitution provides (1) that the Oireachtas shall not enact any law which is in any respect repugnant to the Constitution or to any provision thereof, and (2) that every law enacted by the Oireachtas which is in any respect repugnant to the Constitution or to any provision thereof, shall, to the extent only of such repugnancy, be invalid. Where it is alleged that a law is repugnant to the Constitution, the jurisdiction and duty to determine such question is expressly conferred on the High Court by Art. 34, 3, 2, with appeal in all such cases to this Court (Art. 34, 4, 4). This is a duty of fundamental importance which must be discharged in every case where such a question arises, however onerous that duty may be.
In the present case there is no suggestion that any conflict had arisen, or was likely to arise, between the exercise by the plaintiffs of their rights of property in the trust moneys and the exigencies of the common good, and, in our opinion, it is only the existence of such a conflict and an attempt by the Legislature to reconcile such conflicting claims that could justify the enactment of the statute under review.
In the opinion of this Court, the Sinn Fein Funds Act, 1947, is repugnant to the solemn declarations as to the rights to private property contained in Art. 43 of the Constitution and, accordingly, we are of opinion that it was not within the power of the Oireachtas to pass such an Act. We are not purporting, in this opinion, to deal with the Act in so far as it is confined to the administration of gifts made to the Board under s. 14. To that extent the Act is quite unobjectionable.
There is another ground on which, in our view, the Act contravenes the Constitution. We have already referred to the distribution of powers effected by Art. 6. The effect of that article and of Arts. 34 to 37, inclusive, is to vest in the Courts the exclusive right to determine justiciable controversies between citizens or between a citizen or citizens, as the case may be, and the State. In bringing these proceedings the plaintiffs were exercising a constitutional right and they were, and are, entitled to have the matter in dispute determined by the judicial organ of the State. The substantial effect of the Act is that the dispute is determined by the Oireachtas and the Court is required and directed by the Oireachtas to dismiss the plaintiffs’ claim without any hearing and without forming any opinion as to the rights of the respective parties to the dispute. In our opinion this is clearly repugnant to the provisions of the Constitution, as being an unwarrantable interference by the Oireachtas with the operations of the Courts in a purely judicial domain.
Blake v. The Attorney General
[1982] IR 135
O’Higgins C.J.
Articles 40 and 43
Article 43 is headed by the words “private property.” It defines3 the attitude of the State to the concept of the private ownership of external goods and contains the State’s acknowledgement that a natural right to such exists, antecedent to positive law, and that the State will not attempt to abolish this right or the associated right to transfer, bequeath and inherit property. The Article does, however, recognise that the State “may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.” It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading “personal rights”and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property.
This question of the relationship of Article 40, s. 3, sub-s. 2, to Article 43 was discussed in The Attorney General v. Southern Industrial Trust Ltd. 4 In that case Lavery J., when delivering the judgment of the Court, said at p. 176 of the report: “In any event, in the opinion of the Court, the property rights guaranteed are to be found in Article 43 and not elsewhere and the rights guaranteed by Article 40 are those stated in Article 43.”
The Court is unable to accept this view. Article 43 does not state what the rights of property are. It recognises private property as an institution and forbids its abolition. The rights in respect of particular items of property are protected by Article 40, s. 3, sub-s. 2, by which the State undertakes by its laws to protect from unjust attack and, in the case of injustice done, to vindicate the property rights of every citizen. It is the duty of the Courts to protect such property rights from unjust attack and the decision as to what is such an attack is to be made by the Courts. This view has acceptable judicial support. In his judgment in the High Court in The Attorney General v.Southern Industrial Trust Ltd. 4 Davitt P. gave his view as to the relationship between the two Articles in the following terms at p. 168 of the report:
“If the matter were res integra and untouched by authority I confess that my reading of these articles [Article 40.3.2 and Article 43]would be as follows: There is a clear distinction to be drawn between (1) the general and natural right of man to own property, (2) the right of the individual to the property which he does own, and (3) his right to make what use he likes of that property; and I think this distinction is to be observed in these articles. Article 40.3. seems to me to be the only provision in the Constitution which protects the individual’s rights to the property which he does own. By it the State guarantees to respect this right and by its laws, as far as practicable, to defend it and as best it may to protect it from unjust attack, and where injustice has been done to vindicate it. This is no absolute guarantee but is qualified in more than one respect. Itimpliedly guarantees that the State itself will not by its laws unjustlyattack the right, and I think that the justice or otherwise of any legislative interference with the right has to be considered in relation, inter alia, to the proclaimed objects with which the Constitution was enacted, including the promotion of the common good.”
The application of Article 40.3.2
In this case the plaintiffs claim that their rights to the private property in question have been subjected, by the impugned legislation, to unjust attack and that what has been done is in breach of Article 40, s. 3, sub-s. 2, of the Constitution. In the opinion of the Court, this legislation cannot be regarded as regulating or delimiting the property rights comprehended by Article 43. Accordingly, it requires to be examined for its validity in relation to the provisions of Article 40, s. 3, sub-s. 2. Therefore, the question to be decided is whether the impugned provisions of the Act of 1960 (as amended) constitute an unjust attack on the property rights of the plaintiffs.
The subject of the constitutional challenge
Before entering upon this question, it is necessary to clarify certain matters. As already indicated, the Act of 1960 was amended extensively by the Act of 1967. The amendments included an extension of the power to review certain rents given to the court by s. 8 and a widening of the permitted basis for comparison on the determination of rents under section 9. However, by s. 4, sub-s. 3, of the Act of 1967, it was provided that no application for the review of rent under s. 8 of the Act of 1960 could be made after the expiration of two years from the passing of the Act of 1967 on the 9th May, 1967. This sub-s. 3 was in turn amended in so far as it related to reviews under s. 8, sub-s. (1A), of the Act of 1960 by s. 10 of the Act of 1971 which revived and extended the power of the court to review under sub-s. (1A) for one year after the passing of the Act of 1971 on the 7th December, 1971. Accordingly, the power to review has now ceased.
In considering the validity of the impugned parts of this legislation, the Court cannot have regard to provisions which have been amended or repealed or which no longer operate. The Court proposes to consider this legislation as it now operates following the last amendment, which was effected by s. 10 of the Act of 1971.
Examination of Part II
As already indicated, the long title of the Act of 1960 describes it as “an Act to make provision for restricting the increase of rent and the recovery of possession in certain cases and to provide for other matters connected therewith.” (Emphasis added)
Part II of the Act of 1960 contains the statutory provisions by means of which rents are determined and increases restricted. The legislation which contains these provisions is not limited in its duration. Its terms are mandatory and, generally, do not permit any person affected by its provisions to contract out of their application. The result is that the property rights of the owners of affected houses and dwellings are interfered with, without their consent, and agreements entered into by them for the letting of such premises are, if contrary to the statutory provisions, overridden and rendered ineffective. To the extent, therefore, that these statutory provisions interfere with and render ineffective the exercise by the owners of the houses and dwellings affected of their property rights in relation thereto, they constitute, in the opinion of the Court, an attack upon such rights. The question which must be decided, however, is whether such attack is unjust and therefore in contravention of the provisions of Article 40, s. 3, sub-s. 2, of the Constitution.
In this regard it should first be noted that, in accordance with its long title, the Act of 1960 makes provision for restricting rents only “in certain cases.” As already indicated, these cases comprise lettings of houses or dwellings within specified valuation limits which were built or constructed prior to 7th May, 1941. No reason for this selection is apparent from the impugned legislation and, apart from the fact that rent control existed only in such cases in the previous temporary legislation, no reason was advanced by counsel for the Attorney General. The result is that lettings of all houses and dwellings outside the specified valuation limits and of all such houses and dwellings, irrespective of valuation, built after 1941 are free of any form of rent control.
Further, the legislation expressly excludes all lettings of dwellings made under the Labourers Acts, 1883-1958 or the Housing of the Working Classes Acts, 1890-1958 (to be read in conjunction with s. 120 of the Housing Act, 1966) and thereby excludes the many thousands of lettings made by local authorities to persons in need of housing assistance.
It is further to be noted that the statutory provisions contained in Part II of the Act of 1960 operate in respect of the house or dwelling controlled, irrespective of the means of the tenant. Neither the means of the tenant nor the lack of means of, or possible hardship to, the landlord may be considered in determining the permitted rent. Therefore, it is apparent that in this legislation rent control is applied only to some houses and dwellings and not to others; that the basis for the selection is not related to the needs of the tenants, to the financial or economic resources of the landlords, or to any established social necessity; and that, since the legislation is now not limited in duration, it is not associated with any particular temporary or emergency situation.
Such legislation, to escape the description of being unfair and unjust, would require some adequate compensatory factor for those whose rights are so arbitrarily and detrimentally affected. No such compensatory factor is to be found in the impugned provisions of Part II of the Act of 1960.
The vast majority of the rents in question are determined under the provisions of s. 7 of the Act of 1960. This section declares that the basic rent of premises to which it applies shall be the net rent at which such premises were let on the 8th June, 1966. The net rent, where the landlord paid or allowed a deduction in respect of rates, is declared to be the rent payable less the rates; otherwise it is the rent payable on the specified date. However, the rent payable on the 8th June, 1966, was in all cases regulated by the rent control legislation previously in force. This had the effect that all rents so payable were related to the rent chargeable in 1914 in respect of the older controlled dwellings, and to the rent charged on the 7th May, 1941, in respect of the later ones. It was alleged by the plaintiffs, and not seriously disputed by the Attorney General, that the direct effect of this control has been that rents have been pegged or frozen at a level which is usually oppressively uneconomic and which is further eroded by the statutory obligation to repair and maintain the controlled premises.
Section 9 of the Act of 1960 applies only to cases not covered by section 7. It permits determination by the court of such rent as the court considers reasonable having regard to the rents of “dwellings which are comparable in regard to location, accommodation, amenities, state of repair and rateable valuation.” It is accepted by the plaintiffs that rents determined under s. 9 of the Act of 1960 are comparably higher than rents determined under s. 7 and that, accordingly, such rents yield an element of profit for the owner.
Once basic rents are determined under s. 7 or s. 9 of the Act of 1960, no review thereof is now permitted. The temporary revival of the power to review under s. 7 in certain cases, provided by the Act of 1971, has long since expired. This means that all owners whose rents are controlled are restricted in their income to the amount of the basic rent and to such lawful additions as may be related to increases in rates and to a percentage of actual expenditure on maintenance, repair or improvement. This absence of any power to review such rents, irrespective of changes in conditions, is in itself a circumstance of inherent injustice which cannot be ignored. When this is coupled with the absence of any provision for compensating the owners whose rental incomes are thus permanently frozen, regardless of the significant diminution in the value of money, the conclusion that injustice has been done is inevitable.
In the opinion of the Court, the provisions of Part II of the Act of 1960 (as amended) restrict the property rights of one group of citizens for the benefit of another group. This is done, without compensation and without regard to the financial capacity or the financial needs of either group, in legislation which provides no limitation on the period of restriction, gives no opportunity for review and allows no modification of the operation of the restriction. It is, therefore, both unfair and arbitrary. These provisions constitute an unjust attack on the property rights of landlords of controlled dwellings and are, therefore, contrary to the provisions of Article 40, s. 3, sub-s. 2, of the Constitution.
Examination of Part IV
Section 29 in Part IV of the Act of 1960 restricts the landlord’s right to recover possession of controlled premises. It is also impugned in these proceedings as being invalid having regard to the provisions of Article 40, s. 3, sub-s. 2, of the Constitution. The relevant provisions in Part IV are mandatory and constitute an interference with the normal property rights of the landlords affected. It is an interference which has the effect, in some cases, of causing an almost permanent alienation from the landlord of the right to get possession of the premises, because of the extensive right of the tenant’s family to retain possession after the tenant’s death.
In the view of the Court, a restriction to this extent of a landlord’s right to obtain possession of rented premises is not in itself constitutionally invalid, provided the restriction is made on a basis that is not unconstitutionally unfair or oppressive, or has due regard both to the personal property rights of the landlord and the rights that should be accorded to tenants having regard to the common good. However, the restriction on the right to recover possession contained in Part IV of the Act of 1960 is not distinguishable, or capable of being saved, by such considerations. It is an integral part of the arbitrary and unfair statutory scheme whereby tenants of controlled dwellings are singled out for specially favourable treatment, both as to rent and as to the right to retain possession, regardless of whether they have any social or financial need for such preferential treatment and regardless of whether the landlords have the ability to bear the burden of providing such preferential treatment.
Even if Part IV could be said not to be infected with the constitutional infirmity which invalidates the provisions governing rent control, it could survive the challenge made to its constitutionality only if it could be held to have been enacted by the Oireachtas in a manner and in a context that would leave it with a separate and self-contained existence as a duly enacted measure representing the law-making will of the Oireachtas: see Maher v. The Attorney General 34 (at p. 147); The State (Attorney General) v. Shaw 35 , and the varying views expressed in King v. The Director of Public Prosecutions.
It is clear that it was not so enacted. It acquired a legislative existence as an integral part of a statutory scheme in which controlled dwellings, and only controlled dwellings, had attached to them restrictions as to rent and as to the right to recover possession. For the reasons given earlier in this judgment, those provisions as to rent restriction amount to an unconstitutional interference with the property rights of the relevant landlords. Even if it could be held that the restrictions on the right to recover possession contained in Part IV did not suffer from the same fatal invalidity, those provisions could not be given a life of their own as representing duly enacted provisions. The whole of the provisions governing both rent control and right to possession were enacted (and re-enacted) as a package and, as such, were intended to have an interconnected statutory operation. It would be impossible to say that if the Houses of the Oireachtas had been presented with the option of enacting the restrictions on getting possession of controlled premises that are contained in Part IV, as a type of control separate and distinct from the control of the rents of such dwellings, they would have enacted Part IV on its own. It is a hypothesis that never became a parliamentary choice, express or implied. It would be impossible, therefore, to say that the Houses of the Oireachtas ever visualised the existence of Part IV as distinct from Part II. Neither of those Parts can be deemed to have been given a viable statutory existence apart from the other.
Accordingly, Part IV must also fall as part of an unconstitutionally unjust attack on the property rights of the landlords affected.
Further observations
This decision has the effect that a statutory protection which many thousands of families relied on for the continuance of the existing tenancies in the dwellings in which they live is no longer available to them. A ruling of this nature on the constitutional validity of a particular statutory provision usually exhausts the functions of this Court. In this instance, however, because of the special features of the case and the consequences involved, the Court considers that some further observations are called for.
The removal from the affected tenants of the degree of security of possession and of rent control which they hitherto enjoyed will leave a statutory void. The Court assumes that the situation thereby created will receive the immediate attention of the Oireachtas and that new legislation will be speedily enacted. Such legislation may be expected to provide for the determination of fair rents, for a degree of security of tenure and for other relevant social and economic factors. Pending the enactment of such legislation as may be decided upon, it may be possible in many cases for agreement to be reached between landlords and tenants. Where, however, such agreement is not possible, either because of the tenant’s inability to pay the rent demanded or because of the landlord’s determination to recover possession, considerable hardship would be caused in certain cases if possession were obtained by the ejectment of the tenant. This Court does not wish to pre-empt or prejudge any situation of litigation that may flow from this judgment. It desires to emphasise, however, that it is the duty of the Courts to have regard to the basic requirements of justice when exercising their jurisdiction. In this regard, in the reasonable expectation of new legislation, when a decree for possession is sought, the court should, where justice so warrants, in a case where the now condemned provisions of Part IV would have given a defence against the recovery of possession, either adjourn the case or grant a decree for possession with such stay as appears proper in the circumstances.
Phonographic Performance (Ireland) Ltd. v. Cody
[1998] 4 IR 511
Keane J. 511
That brings me to the third and most contentious relief sought by the plaintiff on this application, i.e. an order permitting the plaintiff to establish the matters of fact contained in certain specified draft affidavits. In considering this application, it is necessary to set out in some more detail the provisions of the Act of 1963 and the background to the present dispute.
Section 60(4) of the Act of 1963 provides that no right in the nature of copyright “shall subsist otherwise than by virtue of this Act or of some other enactment in that behalf”. The right of the creator of a literary, dramatic, musical or artistic work not to have his or her creation stolen or plagiarised is a right of private property within the meaning of Article 40.3.2 and Article 43.1 of the Constitution of Ireland, 1937, as is the similar right of a person who has employed his or her technical skills and/or capital in the sound recording of a musical work. As such, they can hardly be abolished in their entirety, although it was doubtless within the competence of the Oireachtas to regulate their exercise in the interests of the common good. In addition and even in the absence of any statutory machinery, it is the duty of the organs of the State, including the courts, to ensure, as best they may, that these rights are protected from unjust attack and, in the case of injustice done, vindicated. The statements in some English authorities that copyright other than by statutory provision ceased to exist with the abolition of common law copyright are not necessarily applicable in Ireland.
Moynihan v. Greensmyth
[1975] IR 192
O’Higgins C.J. 55
As the Civil Liability Act, 1961, was passed after the Constitution of Ireland came into operation, the decision of the Supreme Court (consisting of O’Higgins C.J., Henchy, Griffin, Kenny and Parke JJ.) was pronounced by one of the judges of that Court in accordance with the provisions12 of Article 34, s. 4, sub-s. 5, of the Constitution.
….
The Civil Liability Act, 1961, which was passed a few weeks after the Road Traffic Act, 1961, repealed both s. 117 of the Road Traffic Act, 1961, and the Fatal Injuries Act, 1956. In their place was enacted the provision14contained in s. 8 of the Civil Liability Act, 1961, with regard to causes of action subsisting against deceased persons, and in Part IV of the same Act with regard to fatal injuries. As to the limitation of actions, the former rules were those laid down in the Common Law Procedure Amendment Act (Ireland), 1853. Section 20 of that Act laid down different periods of limitation for different causes of action. Six years would have been the appropriate period in relation to the plaintiff’s claim. Section 22 of that Act provided that, where at the time of the accrual of such a right of action to any person such person was under 21 years of age, he or she could bring the action within six years after attaining that age. These provisions continued to apply until the Statute of Limitations, 1957, by which they were repealed.
By s. 11, sub-s. 2(b), of the Statute of 1957 a period of three years was provided as the period of limitation in an action, such as the plaintiff’s, where the claim is for damages for personal injuries based on negligence. Section 49 of the Statute of 1957 provides for an extension of time in case of disability, which includes infancy. In a claim such as the plaintiff’s, where the incapacity of infancy exists, this section has the effect that an action may be brought at any time before the expiration of three years after the plaintiff reaches the age of 21 years: see s. 49, sub-s. 2(a)(i), of the Statute of 1957. Therefore, the position was that, had the plaintiff’s accident occurred after the passing of the Statute of 1957 and before the enactment of the Civil Liability Act, 1961, it could not have become statute barred until the expiration of three years after the plaintiff reached the age of 21 years. The accident occurred on the 6th August, 1966, at which date the Civil Liability Act. 1961, was already law. Section 5 of that Act repealed s. 117 of the Road Traffic Act, 1961, and in its place there had been substituted the general provisions of s. 8 of the Civil Liability Act, 1961, by which it was provided that thenceforth all causes of action (other than excepted causes) subsisting against a person should on his death survive against his estate.
On the date of the plaintiff’s accident it was these provisions of s. 8 of the Civil Liability Act, 1961, and not the former provisions of s. 117 of the Road Traffic Act, 1961, which gave the plaintiff a right of action against the estate of the late William Greensmyth. However, the provisions of s. 8 of the Civil Liability Act, 1961, were followed and qualified by the provisions of s. 9 of the same Act. By s. 9 it is provided that no proceedings shall be maintainable in respect of any cause of action which has survived against the estate of a deceased person unless either”(a) proceedings against him in respect of that cause of action were commenced within the relevant period and were pending at the date of his death, or (b) proceedings are commenced in respect of that cause of action within the relevant period or within the period of two years after his death, whichever period first expires.” Sub-paragraph (a) applies only where proceedings had been commenced within the appropriate period laid down in s. 11 of the Statute of 1957 and were pending at the death; obviously this has no relevance in the plaintiff’s case. In her case, sub-paragraph(b) applies and the period of limitation laid down is two years from the death. As the death of the late William Greensmyth occurred in the accident in which the plaintiff was injured, the plaintiff’s proceedings (which were issued on the 5th August, 1969) were 12 months later than the period laid down in s. 9 of the Civil Liability Act, 1961.
In these circumstances it has been contended on behalf of the plaintiff that s. 9 of the Civil Liability Act, 1961, is repugnant to the Constitution because, in its enactment, the State failed to observe the duty (prescribed by Article 40, s. 3, sub-s. 2, of the Constitution) to protect from unjust attack the property rights of the plaintiff. Reliance was placed by counsel on behalf of the plaintiff on two decisions of this Court, namely, O’Brien v.Keogh 15 and O’Brien v. Manufacturing Engineering Co. Ltd. 16
In O’Brien v. Keogh 15 the Court considered the validity of sub-paragraph 2 of sub-s. (2)(a) of s. 49 of the Statute of 1957. That sub-paragraph provided that the extension of time given in relation to incapacity would not apply unless it was proved that the person under incapacity was not in the custody of a parent when the right of action accrued. The Court held this sub-paragraph to be invalid because it offended against Article 40, s. 3, sub-s. 1, of the Constitution. The basis of this decision was that the common-law right of action of the infant plaintiff in that case was a property right which, the Court held, by reason of the enactment of the sub-paragraph of the Statute of 1957 had not been protected and vindicated by the State as it ought to have been under the provisions of Article 40, s. 3, sub-s. 1, of the Constitution.
In O’Brien v. Manufacturing Engineering Co. Ltd. 17 the Court was asked to consider the validity of s. 6, sub-s. 1, of the Workmen’s Compensation (Amendment) Act, 1953, having regard to the provisions of the Constitution. This section of the former Workmen’s Compensation code provided that an injured workman who had accepted compensation under the Workmen’s Compensation Acts could maintain a common-law action in respect of his injurybut only if he brought it within two years of the accident. As this provision made a distinction between injured workmen who had accepted compensation and other injured plaintiffs who had three years to sue under the Statute of 1957, it was contended that the sub-section offended both s. 1 and s. 3 of Article 40 of the Constitution. The Court held against these contentions, but accepted that a cause of action at common law for damages for personal injuries caused by negligence is a property right which is protected by the provisions of sub-s. 2 of s. 3 of Article 40 of the Constitution: see the portion of the judgment of the Court at p. 367 of the report.
In both O’Brien v. Keogh 18 and O’Brien v. Manufacturing Engineering Co. Ltd. 17 the Court acted on the assumption that a right to litigate a particular claim was a property right and that, as such, its protection was guaranteed by Article 40, s. 3, sub-s. 2, of the Constitution. In neither of those cases does it seem that the Court’s attention was directed to its earlier decisions in Foley v. Irish Land Commission 19 and in Attorney General v.Southern Industrial Trust Ltd. 20 In these cases it was held, in effect, that the property rights guaranteed by Article 40, s. 3, sub-s. 2, of the Constitution are not rights over particular items of property but are the property rights guaranteed by Article 43, namely, the natural right to the private ownership of external goods and the general right to transfer, bequeath and inherit property. To divest a citizen of the ownership of a particular item of property in certain circumstances was held to be permissible under Article 43, s. 2, of the Constitution. If this opinion were to be adhered to, the reasoning underlying the decisions in the two O’Brien cases would seem to be incompatible with the Court’s ruling in Foley v. Irish Land Commission 21and Attorney General v. Southern Industrial Trust Ltd. 22 Accordingly, in order to give a comprehensive answer to the question posed by the present case, it would be necessary for the Court to give a considered ruling as to whether the right claimed by the plaintiff is a property right and, if so, whether it is one of the property rights guaranteed by Article 40, s. 3, sub-s. 2, of the Constitution. For that purpose it would be necessary to review the Court’s decisions in O’Brien v. Keogh 23; O’Brien v. Manufacturing Engineering Co. Ltd. 24; Attorney General v. Southern Industrial Trust Ltd. 22;and in earlier cases such as Foley v. Irish Land Commission 21 and Buckley and Others (Sinn Fein) v. The Attorney General 25not all of which decisions are reconcilable with each other.
However, counsel for the defendant and counsel for the Attorney General have conceded that the right claimed by the plaintiff is a property right and it has not been contended that such property right does not come within the category of property rights guaranteed by Article 40, s. 3, sub-s. 2, of the Constitution.
Therefore, the Court is constrained to decide this appeal on the basis of those two concessions or assumptions but it wishes to make it clear that, in doing so, it does not necessarily accept that those concessions or assumptions are well founded. The points have not been argued in this case, so the Court is unable to express any opinion on them. In particular, the Court reserves for a case in which the point has been duly raised and argued the question whether it was correctly decided in O’Brien v. Keogh 23that s. 49, sub-s. 2(a)(ii), of the Statute of Limitations, 1957, is repugnant to the Constitution.
Proceeding, therefore, on the assumption that the right to sue claimed by the plaintiff is a property right which is guaranteed by Article 40, s. 3, sub-s. 2, of the Constitution, the question is whether that right has been subjected to unjust attack or whether there has been an injustice which required vindication by the State. It is noted that the guarantee of protection given by Article 40, s. 3, sub-s. 2, of the Constitution is qualified by the words “as best it may.” This implies circumstances in which the State may have to balance its protection of the right as against other obligations arising from regard for the common good.
As the law stood, prior to the passing of s. 9 of the Civil Liability Act, 1961, an infant could wait up to three years after attaining majority before suing the personal representative of a deceased motorist in respect of his negligent driving. This could mean that the administration of an estate might be greatly delayed or, alternatively, that after many years those entitled on a death might be subjected to a claim for damages of which there had been no prior notice. Obviously in such circumstances severe hardship might be caused and injustice done to innocent people. As the law then stood, this could only happen to those who represented, or shared in, the estate of a person who had been guilty of negligent driving. In relation to others the common-law rule continued to apply and liability terminated at the death of the wrongdoer.
When it was decided to provide generally for the survival of causes of action, a general limitation period of two years was provided in the impugned provisions of s. 9, sub-s. 2(b), of the Civil Liability Act, 1961. It was conceded in argument that this could not be regarded as an unjust attack on those not suffering from incapacity and that, in such circumstances, the period was reasonable and fair. In relation to those (such as the plaintiff) who at the time of the accrual of the cause of action are under 21 years of age, is a two-year period from the death of the wrongdoer so unreasonably short as to constitute an unjust attack on their rights? Bearing in mind the State’s duty to othersin particular those who represent the estate of the deceased, and beneficiariessome reasonable limitation on actions against the estate was obviously required. If the period of infancy were to form part of the period of limitation, as was formerly the case, then the danger of stale claims being brought would be very real and could constitute a serious threat to the rights of beneficiaries of the estate of a deceased. The alternative was to apply a period of limitation which would have general application. It had to be either one or the other; and it does not appear that any compromise was possible.
In these circumstances, in the view of the Court, having regard to the conflicting claims on the State’s protection, this sub-section cannot be regarded as constituting an unjust attack nor can its enactment be a failure to vindicate the alleged property rights of infants. In the view of the Court it has not been shown that the State has not fulfilled its obligations under Article 40, s. 3, sub-s. 2, to protect from unjust attack and, in the case of injustice done, to vindicate the property rights of the plaintiff. Accordingly, this appeal is dismissed.
The specific answer the Court will give to the question set out in the issue is that, on a consideration of even the restricted arguments put forwardin this case, it has not been shown that s. 9 of the Civil Liability Act, 1961, is repugnant to Article 40, s. 3, sub-s. 2, of the Constitution; and that the plaintiff’s claim is, therefore, not statute barred.
Jeremiah Lovett v. Minister for Education; Ireland and; the Attorney General;
[1997] 1 I.L.R.M. 89
1995 No. 269
The constitutional argument
I accept that when the applicant was approved for early retirement on grounds of disability he became entitled to the payment of a pension. Indeed, were he not so entitled, the pension in question could not have been forfeited. Paragraph 8(1) of the scheme means that this pension right is automatically forfeited and lost to the applicant. His monthly pension entitlement has been calculated at a sum of approximately £1,100. Applying an actuarial multiplier to that from the applicant’s present age to his 73rd year, it amounts to a capital loss of approximately £330,000. This sum was not questioned by the respondents. Accordingly, the forfeiture of this entitlement is of major significance for the applicant. It must be borne in mind that the pension in the instant case was a contributory one.
The applicant contends that the provisions of paragraph 8(1) of the scheme constitute a failure by the State to protect the constitutional rights of the applicant and in particular his property rights in his pension.
Paragraph 8 of the scheme is part of a pre-1937 law and therefore falls to be dealt with pursuant to the provisions of Article 50 of the Constitution. It must therefore be examined to see whether it is inconsistent with the provisions of the Constitution. It does not enjoy any presumption of constitutionality. On this aspect of the case heavy reliance is placed by the applicant on the decisions of both this Court and the Supreme Court in Cox v. Ireland [1992] 2 IR 503 .
In that case the plaintiff, who was employed as a teacher in a community school, had been convicted by a Special Criminal Court of a scheduled offence. He was sentenced to two years’ imprisonment. On his release from prison, the said plaintiff wished to resume his former teaching position. By reason of the provisions of s. 34 of the Offences Against the State Act 1939 , he was barred from so doing. That section provided that whenever a person was convicted by a Special Criminal Court of an offence set out in the schedule to that Act, and that person held at the time of such conviction an office or employment remunerated out of the central fund or monies provided by the Oireachtas or raised by local taxation, then that person should, immediately upon conviction, forfeit that office or employment and should be disqualified from holding any like office or employment for a period of seven years subsequent to the date of conviction.
Mr Cox sought a declaration that the provisions of s. 34(1) to (4) of the Act were invalid having regard to the provisions of the Constitution. He was successful both in this Court and on appeal.
In the course of his judgment Finlay CJ said at p. 522:
It is clear that the provisions of s. 34 of the Act of 1939, when it becomes applicable to any person convicted of a scheduled offence in a Special Criminal Court, potentially constitutes an attack, firstly, on the unenumerated constitutional right of that person to earn a living and, secondly, on certain property rights protected by the Constitution, such as the right to a pension, gratuity or other emolument already earned, or the right to the advantages of a subsisting contract of employment.
I am satisfied that the applicant’s right to a pension in the instant case constitutes a property right which is protected by the Constitution. I am fortified in that conclusion by what is stated in the passage which I have just cited.
Later in the same judgment Finlay CJ said this:
The court is satisfied that the State is entitled, for the protection of public peace and order, and for the maintenance and stability of its own authority, by its laws to provide onerous and far-reaching penalties and forfeitures imposed as a major deterrent to the commission of crimes threatening such peace and order and State authority, and is also entitled to ensure as far as practicable that amongst those involved in the carrying out of the functions of the State, there is not included persons who commit such crimes. The State must in its laws, as far as practicable, in pursuing these objectives, continue to protect the constitutional rights of the citizen.
The net question which therefore falls for determination here is whether there has been a failure in the protection of the constitutional rights of the applicant, which is not warranted by the objectives which it is sought to secure.
In my view, paragraph 8(1) of the scheme amounts to an unreasonable and unjustified interference with the applicant’s constitutional entitlements. It is not warranted by the objectives which it is sought to secure.
Quite apart from the fact that such objectives do not appear to me to be justified by any provision of the Act of 1928, it is clear that paragraph 8(1) can apply to a very large number of crimes of widely varying seriousness.
So for example, a conviction of a crime or offence which merits a period of seven days’ imprisonment with hard labour gives rise to a forfeiture whereas a term of imprisonment of 11 months does not. On the other hand, a suspended sentence of 15 months’ imprisonment gives rise to a forfeiture whereas a custodial sentence of eleven months’ imprisonment does not. It is reasonable to assume that a judge, when imposing a suspended sentence, takes a less serious view of the offence alleged than when a custodial sentence, even if of lesser duration, is imposed. In the above example, however, the suspended sentence attracts a forfeiture whilst the custodial sentence does not.
It is also to be noted that paragraph 8(1) applies across the entire range of the criminal law. Nowhere is it suggested that the crime or offence which attracts the penalty which triggers paragraph 8(1) has to have anything to do with the office or occupation formerly held by the retiree. Indeed, it is difficult to see why retired teachers should be subject to these provisions. What legitimate objective of the State is being satisfied by this provision? It is true of course that the State has an interest in deterring crime in general but that would not justify the singling out of retired teachers for these special measures. Some case might be made to support such a provision concerning serving teachers who hold positions of trust in our society but none can, in my view, be advanced concerning retired teachers.
Paragraph 8(1) is mandatory in its application. In my view, it fails to pass the test prescribed by the Supreme Court in Cox’s case and does not, as far as practicable, protect the constitutional rights of the applicant. A retired teacher cannot escape its effects even in circumstances where he could show that the offence of which he was convicted was a minor one, had nothing to do with his former occupation, and attracted only a sentence of a few days’ imprisonment with hard labour or a suspensory sentence of more than 12 months. It does not even have an ameliorating provision similar to that which was contained in s. 34(5) of the Offences Against the State Act . Under that subsection the government was entitled at its absolute discretion to remit in whole or in part any forfeiture or disqualification incurred under the section. Although that provision did not save s. 34 from its constitutional invalidity, it was at least an attempt to provide a mechanism whereby the harshness of the remaining provisions of that section might in an appropriate case be remitted. In the present case, paragraph 8(1) takes effect regardless of personal circumstances once the appropriate punishment has been imposed by the court of trial. Whilst the existence of such a provision would not, in my view, save paragraph 8(1) from being unconstitutional, it might very well have rendered this application unnecessary. The application might also have been unnecessary had the letter from the department on 21 June 1995, made reference to paragraph 8(1) so as to alert the applicant’s then legal advisers and the Circuit Court judge as to its existence.
Whilst I have considered and given my views on this aspect of the case, I do not propose to grant the declaration sought as to the constitutionality of paragraph 8(1). It does not seem appropriate to do so as I have already struck it down on other grounds. Such an approach, I believe, to be in accordance with the principle of judicial self-restraint.
State (F.P.H. Properties S.A) v. An Bord Pleanala
17th December 1987
[1987] IR 698
I have had the opportunity of reading the judgment about to be delivered by McCarthy J. and I agree with it.
Finlay C.J.
Walsh J.
I also agree with that judgment.
McCarthy J.
Furry Park House was built in 1730 on what is now Howth Road, Killester as a weekend villa for Joseph Fade, a prominent Dublin banker. A son of the distinguished parliamentarian and Lord Chief Justice, Charles Kendal Bushe (“the incorruptible”) lived and died in this house. During the War of Independence it was used as a refuge by Michael Collins, at a time when it was owned by Crompton Davies whose wife was a co-translator of “Fiche Bliain ag Fas”. Others associated with Furry Park House were William Butler Yeats, Sir John and Lady Lavery and George Bernard Shaw. In sum it may be fairly described as a house of real significance in Irish history, politics and literature quite apart from its undoubted architectural significance which make it a valuable part of the national heritage. Houses like Furry Park House were common in the eighteenth century but few of the early part of that century survived: within the national context there are no more than six intact houses. Whilst structurally the house is sound, it is extensively subject to dry rot and wet rot and, for its survival, requires expenditure of something of the order of £250,000. Within the city of Dublin on objective standards the house is unique, but by some oversight was not included in the No. 1 list of houses to be preserved contained in the Dublin City Draft Development Plan of 1980. At the time of the hearing of the planning appeal to which subsequent reference will be made, it was intended to make such a listing in the Draft Development Plan for Dublin City and it is now so listed.
The house along with the cottage and out buildings stands on 2.77 acres on the southern side of the Howth Road with a large commercial garage on one side and a two-storey semi-detached house, No. 243 Howth Road, on the other. The prosecutor “F.P.H.” is the owner of the site and has made four separate applications for planning permission for development on the site; in respect of each such application an appeal was brought to the respondents and all four appeals were heard simultaneously:
Planning Application No. 1
Application for the provision of a commercial vehicle carpark extension adjoining the garage on .27 acres; permission refused for 4 reasons including (1) that the proposed development would necessitate demolition of Furry Park House.
Planning Application No. 2
Proposal for a flat development of 84 flats and the provision of a commercial vehicle carpark extension to the garage on the full site of 2.77 acres; permission was refused.
Planning Application No. 3
A proposal for the provision of 84 flats; permission granted subject to conditions.
Planning Application No. 4
Proposal for the provision of 89 flats; permission granted subject to conditions.
In respect of numbers 3 and 4 condition No. 15 was expressed in identical terms:
“The house known as Furry Park House, number 241 Howth Road, excluding the adjoining cottage and outhouses, shall not be demolished as proposed. Notwithstanding the Local Government (Planning and Development) Regulations, 1977, no internal or external structural alterations shall be carried out without a prior grant of planning permission. The use of Furry Park House shall remain residential unless a subsequent grant of permission is obtained for a change of use.”
This condition was stated to be for reasons “in the interests of the proper planning and development of the area.”
Appeals were carried to the respondents and an oral hearing held following which the inspector appointed to hold such hearing, Mr. A. Bradley, furnished a report dated 30th April, 1985. It is from that report that the facts that I have outlined above are derived. On the 28th June, 1985, the respondents determined the appeal, in effect confirming the refusal of permission that involved the demolition of Furry Park House and granting permission for flat development (89 flats and 84 flats) in accordance with the plans and particulars lodged with Dublin Corporation and subject to the conditions specified in the 2nd schedule of the order of the respondents. It is important to emphasise that these two applications were proposals confined to the development of that portion of the 2.77 acre which excluded Furry Park House itself and its immediate curtilage, the area of proposed development totalling 2.50 acres. Condition 1 of the 2nd schedule reads as follows:
“(a) The entire house known as Furry Park House, number 241 Howth Road or alternatively the early eighteenth century core of the house, excluding in either event the adjoining cottage and out-houses, shall be retained and restored and the internal elements in the house comprising the panelling to the hall, staircase, landings and room at ground floor level as well as the two early eighteenth century fire surrounds along with all original architraves, cornices etc., shall be preserved, conserved or replaced in facsimile as their condition warrants;
(b) Work to the house as required under (a) above shall be completed prior to the occupation of more than thirty of the proposed flats in accordance with details to be agreed with the planning authority or failing that agreement as determined by An Bord Pleanala ;
(c) Following completion of the said work no internal or external structural alterations shall be carried out to the house without a prior grant of planning permission and
(d) The house shall remain in residential use unless a subsequent grant of planning permission is obtained for a change of use.
Reason:
To safeguard Furry Park House which is of architectural historic and artistic interest.”
The prosecutor challenged the validity of this condition and says that, being invalid, it may be severed from the permission so as to leave the remainder valid for their purposes. It concedes that the condition may be a laudable attempt by the respondents to secure, at its expense, the worthwhile preservation of part of the national heritage as a quid pro quo for obtaining what is a very valuable planning permission, but submits that the law does not permit such a manoeuvre, however admirable its purpose and however commercial theirs. The developer also contends that the burden imposed by the condition is out of all proportion to the development planned in that the cost is too great, and, further, that the condition is bad because it is uncertain.
The Law
The Local Government (Planning and Development) Act, 1963, so far as relevant, provides:
“26. (1) Where
(a) application is made to a planning authority in accordance with permission regulations for permission for the development of land or for an approval required by such regulations, and
(b) any requirements relating to the application of or made under such regulations are complied with,
the authority may decide to grant the permission or approval subject to or without conditions or to refuse it; and in dealing with any such application the planning authority shall be restricted to considering the proper planning and development of the area of the authority (including the preservation and improvement of the amenities thereof), regard being had to the provisions of the development plan, the provisions of any special amenity area order relating to the said area and the matters referred to in subsection (2) of this section.
(2) Conditions under subsection (1) of this section may, without prejudice to the generality of that subsection, include all or any of the following conditions:
(a) conditions for regulating the development or use of any land which adjoins, abuts or is adjacent to the land to be developed and which is under the control of the applicant, so far as appears to the planning authority to be expedient for the purposes of or in connection with the development authorised by the permission,
(b) conditions for requiring the carrying out of works (including the provision of car parks) which the planning authority consider are required for the purposes of the development authorised by the permission . . .”
Sub-section 5 of s. 26 made provision for an appeal, at that time to the Minister for Local Government, but now to An Bord Pleanala . The net effect is that an application, the subject of an appeal, is to be treated by An Bord Pleanala as if made to it in the first instance and the provisions of sub-ss. 1 and 2 should apply with necessary modifications.
Section 19 of the Act of 1963 created the obligation on every planning authority to make a development plan and prescribed its contents. By sub-s. 3 it permitted a development plan to indicate objectives for any of the purposes mentioned in the Third Schedule to the Act. Part IV of the Third Schedule under the heading “Amenities” included amongst the purposes for which objectives may be indicated in a development plan. “5. Preservation of buildings of artistic, architectural or historical interest” and, as amended by the Local Government (Planning and Development) Act, 1976. “5A. Preservation of plasterwork, staircases, woodwork or other fixtures or features of artistic, historic or architectural interest and forming part of the interior of structures.”
Reliance was placed upon a number of authorities. In the High Court, Lynch J. was of the view that the planning authority could “reasonably take the view that the preservation of Furry Park House would be an amenity to the authorised development in that it would improve the visual attractiveness of the whole area and in that it would also preserve for low density residential purposes the house itself and its site which immediately adjoins the area to be developed.” Lynch J. rejected the argument of alleged uncertainty and the contention that there was no evidence to support the conclusion of the inspector as to the reasonable distribution of the alleged cost of restoration at a price of £3,000 per apartment. I do not accept these conclusions. I accept Mr. Smyth’s proposition that, since the requirement for planning permission constitutes an encroachment on property rights, it must be strictly construed. No doubt, the curtilage of Furry Park House adjoins, abuts and is adjacent to the land to be developed and is under the control of the prosecutor (see s. 26, sub-section 2 (a)). I do not accept, however that the impugned condition is one for regulating the development or use of such land; further, in my view, it is not covered by the expression”so far as appears to the planning authority to be expedient for the purposes of or in connection with the development authorised by the permission.” I have no doubt it appears to the planning authority to be highly expedient to require the developer to expend a significant sum of money in preserving Furry Park House but that does not make it expedient for the purposes of or in connection with the authorised development. Without seeking to delimit the type of conditions envisaged by s. 26, sub-s. 2 (a), I would think it appropriate for example to conditions which sterilise adjoining land as an integral part of the amenity of a particular development. I do not attach any particular significance to the identified difference between the English Planning Act of 1947 and of 1971 and the provisions of s. 26, save for the provision of s. 26, sub-s. 2 (b) which does provide for conditions for requiring the carrying out of works which, in context, must mean works on the lands the subject of the application for permission. Mr. Brady, for the respondents, falls back, so to speak, on the “catch all” provision of sub-s. 2 that conditions may “without prejudice to the generality of that subsection [sub-section 1]” etc., arguing that sub-s. 2 is merely a check list. I accept his general proposition, but it does not seem to me to advance his case any further. In my view, to enable the relevant authority to impose a condition of the like created by condition 1 would require expression in the clearest terms.
Having regard to this conclusion, it is not necessary that I should express a view on the other two bases of argument uncertainty and unreasonableness. Suffice it to say that I am far from satisfied that these two objections are not also fatal to the condition in question.
Severability
Unless it can be demonstrated that the respondents would have granted the relevant permissions subject only to the other conditions, if it had been advised that the impugned condition was invalid, in my view the impugned condition is not severable from the remainder of the permissions. Having regard to the contents of the inspector’s report and, in context, taking the condition as it stands alongside its fellows, I am far from satisfied to hold that such would be the case. Mr. Brady relied upon the decisions in O’Brienv. Bord na Móna [1983] I.R. 255; The State (Tern Houses) v. An Bord Pleanala [1985] I.R. 725; The State (Genport Ltd.) v. An Bord Pleanala [1983] I.L.R.M. 12 and The State (Boyd) v. An Bord Pleanala (Unreported, High Court, Murphy J., 18th February, 1983). I do not find it necessary to express any view as to the relevance of the particular authorities; I am content to hold that the permissions cannot stand with the conditions severed from them. To hold otherwise would be to rewrite the permissions.
In the course of argument the question arose as to whether or not, in the event of the condition being condemned, the matter should be referred back to the respondents. Without deciding whether or not there is power to make such an order, in my view it is not an appropriate order to make in the instant appeal. As to the form of the order quashing the decisions of the respondents, I would await the submissions of counsel, to whom I would like to express my appreciation for their helpful arguments on the hearing of this appeal.
…..
The issues arising
It was agreed between the parties in the High Court in this action that certain preliminary questions of law arose. The parties sought a determination of these by way of a preliminary issue and agreed on the points of law to be determined. The matter was then heard by McMahon J. in the High Court on the basis of the pleadings and the oral evidence of the senior legal assistant in the Department of the Environment and no other evidence. The agreed points of law to be determined were as follows:
(1). Whether an action in damages for breach of statutory duty, at the suit of the plaintiffs, lay against the first defendant for granting on legal advice the outline planning permission to Patrick Thornton in 1977.
(2). Whether an action in damages for negligence at the suit of the plaintiffs lay against the first defendant for granting on legal advice the said outline planning permission.
(3). Whether an action in damages for negligent misrepresentation at the suit of the plaintiff lay against the first defendant for granting on legal advice the said outline planning permission.
(4). Whether in the circumstances pleaded the second defendant had failed to vindicate the property rights of the plaintiff and if so whether an action for damages lay against the second.
(5). Whether in the circumstances pleaded the second-named defendant had in its laws respected and, as far as practicable by its laws defended and vindicated the property right of the plaintiffs, and if it had not, whether an action in damages lay against that defendant.
Material provisions of the Local Government (Planning and Development) Act, 1963
By s. 26, sub-s. 1 of the Act of 1963 a planning authority is authorised, when an application is properly made to it for permission, to decide to grant permission subject to or without conditions, or to refuse it and, in dealing with any such application, it is restricted to considering the proper planning and development of the area of the authority, including the preservation and improvement of the amenities thereof, regard being had to the provisions of the Development Plan and to the matters referred to in sub-s. 2 of the section.
By s. 26, sub-s. 2 there are provided a great number of conditions which may be applied to a grant of permission dealing with different planning objections and topics.
By s. 26, sub-s. 3 it is provided as follows:
“A planning authority shall not, in a case in which the development concerned would contravene materially the Development Plan or any special amenity area order relating to their area, decide to grant a permission under this section, save with the consent of the Minister.
(b) Where an application is made to the Minister for a consent under this subsection, any person may furnish to the Minister in writing his objections to the grant of the consent, and the Minister shall, before granting the consent, consider any such objections which he receives within twenty-one days after the receipt of the application.”
By s. 26, sub-s. 5 a right of appeal against a decision of the planning authority was provided to the Minister. By s. 26, sub-s. 5 (b) it was provided that where an appeal was brought to the Minister he should determine the application as if it had been made to him in the first instance and the provisions of sub-ss. 1 and 2 of s. 26 should apply, subject to any necessary modifications, in relation to the determination of an application by the Minister on appeal under the sub-section as they apply in relation to the determination, under the section, of an application to a planning authority.
The learned trial judge dealing with the evidence given before him by the principal legal adviser to the first defendant, stated as follows:
“[The] evidence, which I accept, was that all planning appeals to the Minister were scrutinised by the legal section of the department before submission to the Minister and that when the Local Government (Planning and Development) Act, 1963, became law the legal section of the department had advised the Planning Section that the Minister had power on appeal to allow a development which materially contravened the Plan. The legal advisers had not appreciated that s. 26, sub-s. 3 of the Act imposed any conditions precedent to a grant of permission by the Minister in those cases and over the years permission had been granted for many developments of that kind.”
I am satisfied that these inferences or findings of fact made by the learned trial judge are supported by the evidence given and therefore can not be disturbed or interfered with by this Court.
Having regard to that finding, I am quite satisfied that the learned trial judge was right in reaching the conclusion which he did that the first defendant could not be said to have been negligent or to have been guilty of negligent misrepresentation. If a Minister of State, granted as a persona designata a specific duty and function to make decisions under a statutory code (as occurs in this case), exercises his discretion bona fide, having obtained and followed the legal advice of the permanent legal advisers attached to his department, I can not see how he could be said to have been negligent if the law eventually proves to be otherwise than they have advised him and if by reason of that he makes an order which is invalid or ultra vires. The plaintiffs on this appeal expressly waived any question of an allegation of malice or improper motives against the first defendant, nor indeed was any allegation of malice or impropriety made against him in the pleadings. I am, therefore, satisfied that in so far as the plaintiffs have appealed against the learned trial judge’s findings, that an action in damages for negligence or for negligent misrepresentation does not and can not lie, the appeal must fail.
As I understand the plaintiffs’ arguments on the question of a breach of statutory duty it is as follows. They do not contend that the mere fact that the decision made by the first defendant in 1977 was a nullity gives rise to an action for damages even if it could be established that damage flowed to the plaintiff from it.
They expressly disclaim any attempt to put their claim under this heading on the principle which apparently was laid down in the case of Beaudesert Shire Council v. Smith (1966) 120 C.L.R. 145, where it was stated as follows:
“. . . it appears that the authorities cited do justify a proposition that independently of trespass, negligence or nuisance, but by an action for damages upon the case, a person who suffers harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another is entitled to recover damages from that other.”
It is, therefore, not necessary for me to express any view as to whether the principle thus enunciated forms part of the law of this State or not and I do not do so.
What the plaintiffs do contend, however, is that the exercise by the first defendant of his powers under the Act of 1963 in the form of the decision which he made to grant outline planning permission which materially contravened the Development Plan, was such a gross abuse of the power which he was purporting to exercise that it could not reasonably be an exercise of that power.
It was, therefore, submitted that it constituted a breach of a duty owed to the plaintiffs as persons who might become and were in fact affected by the granting of that outline permission. The duty was alleged to be to exercise his statutory power of decision in a reasonable fashion and, it was submitted, a breach of it was actionable in damages.
I am satisfied that this submission also fails. The Minister in making his purported decision to grant an outline planning permission was exercising a decision-making power vested in him for the discharge of a public purpose or duty. The statutory duty thus arising must, however, in law, be clearly distinguished from duties imposed by statute on persons or bodies for the specific protection of the rights of individuals which are deemed to be absolute and breach of which may lead to an action for damages.
The decision-making power or duty purporting to have been exercised on this occasion, in my view, falls, with regard to the question of damages arising from its performance into a quite different category.
I would adopt with approval the clear summary contained in the 5th edition of H.W.R. Wade, Administrative Law, at p. 673, when the learned author states as follows:
“The present position seems to be that administrative action which is ultra vires but not actionable merely as a breach of duty will found an action for damages in any of the following situations:
1. If it involves the commission of a recognised tort, such as trespass, false imprisonment or negligence.
2. If it is actuated by malice, e.g. personal spite or a desire to injure for improper reasons.
3. If the authority knows that it does not possess the power which it purports to exercise.”
I am satisfied that there would not be liability for damages arising under any other heading.
It is, of course, conceivable that proof of what has been submitted in this appeal as a gross abuse of the exercise of a statutory power of decision, or proof of a wholly unreasonable exercise of that power, would be taken by a court to be evidence that the authority knew or must have known that it did not possess the power which it purported to exercise.
I am quite satisfied, however, that the exercise by the defendant of this power in 1977, in the manner in which he did, and having regard to the legal advice which he sought and obtained prior to doing so, could not possibly constitute such a gross abuse of power or wholly unreasonable exercise of power as to lead to an inference that he was aware that he was exercising a power which he did not possess. The only evidence led in this case quite clearly indicates the contrary, and that the Minister was of the belief that he was exercising a power which he possessed.
Not only am I satisfied that this is the true legal position with regard to a person exercising a power of decision under a public statutory duty, but it is clear that there are and have always been weighty considerations of the public interest that make it desirable that the law should be so. Were it not, then there would be an inevitable paralysis of the capacity for decisive action in the administration of public affairs. I would quote with approval the speech of Moulten L.J. in Everett v. Griffiths [1921] 1 A.C. 631 where at p. 695 he states:
“If a man is required in the discharge of a public duty to make a decision which affects by its legal consequences the liberty or property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of his duty to the public, and then to leave him in peril by reason of the consequence to others of that decision, provided that he has acted honestly in making that decision.”
Claim for damages for breach of constitutional rights
The plaintiffs in respect of this claim rely on Article 40, s. 3, sub-s. 1 and Article 40, s. 3, sub-s. 2 of the Constitution. They assert that they had a property right in the lands which they purchased; that that has been diminished in value by reason of the invalidity of the decision granting outline planning permission to the previous owner of the lands upon which they, the plaintiffs, relied in purchasing them; that that constitutes an unjust attack on their property rights or an injustice done to them and that the State has by its laws, in the absence of a right to compensation failed to defend or vindicate those property rights or to protect them.
Some reliance was placed on the provisions of the Local Government (Planning and Development) Act, 1982, which retrospectively validated certain planning decisions made on appeal by the Minister prior to the 15th March, 1977, but which contained a saver for cases involving constitutional rights of other persons, which would appear to exclude the plaintiffs from the benefit of such retrospective validation.
With regard to this submission the first enquiry must, it seems to me, be as to whether there has been an unjust attack on the plaintiffs’ property rights or whether an injustice has been done to them.
What the Minister was doing in making his decision in 1977 to grant outline planning permission to the then owner of these lands was not intended as any form of delimitation or invasion of the rights of the owner of those lands but was rather intended as an enlargement and enhancement of those rights.
The purchase of land for development purposes is manifestly a major example of a speculative or risk commercial enterprise. Changes in market values or economic forces, changes in decisions of planning authorities and the rescission of them, and many other factors, indeed, may make the land more or less valuable in the hands of its purchasers.
I am prepared to accept that prima facie in this instance the fact that the Minister’s decision was ultimately found by this Court to have been a nullity, probably contributed towards a diminution in the value of the land in the plaintiff’s hands. That fact, itself, however, does not, in my view, necessarily mean that an injustice was done to the plaintiffs and I am certain that that does not constitute an unjust attack on the plaintiffs’ property rights.
The obligation of the State in Article 40, s. 3, sub-s. 1 and Article 40, s. 3, sub-s. 2 is in the first instance, as far as practicable by its laws to defend and vindicate the personal rights of the citizen and, in the second instance, to protect as best it may from unjust attack, and in the case of injustice done, vindicate the property rights of every citizen. In its decision in the case of Moynihan v. Greensmyth [1977] I.R. 55, this Court in its judgment delivered by O’Higgins C.J., stated as follows:
“It is noted that the guarantee of protection given by Article 40 s. 3, sub-s. 2 of the Constitution is qualified by the words ‘as best it may’. This implies circumstances in which the State may have to balance its protection of the right as against other obligations arising from regard for the common good.”
I am satisfied that it would be reasonable to regard as a requirement of the common good an immunity to persons in whom are vested statutory powers of decision from claims for compensation where they act bona fideand without negligence. Such an immunity would contribute to the efficient and decisive exercise of such statutory powers and would, it seems to me, tend to avoid indecisiveness and delay, which might otherwise be involved.
I am, therefore, satisfied that there can not be, on the facts of this case, any question of there being a clearcut obligation imposed on the State to provide compensation for the plaintiffs in the circumstances which have arisen. I am, therefore, satisfied that the submissions made with regard to a claim for damages for breach of constitutional rights must also fail. It is not necessary for me to decide, and I express no opinion, on the question as to whether an action does lie for failure on the part of the Oireachtas to legislate in protection of personal rights, as distinct from the action to set aside or invalidate legislation which fails adequately to protect or vindicate them.
I would, accordingly, dismiss the appeal of the plaintiffs against the decision of the High Court in this case.
Henchy J.
In March, 1977, the Minister for Local Govermment (who was the statutory predecessor of the Minister for the Environment) granted outline planning permission for the development for industrial, warehouse and office development of twenty-one and a half acres in an area of County Dublin which had been zoned in the development plan for the further development of agriculture and for the preservation of open space amenity. That planning permission had been refused at first instance by the planning authority, Dublin County Council. It was on appeal that it was granted by the Minister. The County Council refused to implement the Minister’s permission, whereupon Pine Valley Developments Ltd. (“Pine Valley”) who had purchased the lands, brought proceedings in the High Court seeking an order of mandamus to compel the County Council to do so. It was eventually held ([1984] I.R. 407) by this Court, on appeal from the High Court in those proceedings, that mandamus must be refused, as the Minister had acted in excess of his statutory powers in granting the permission. It was further held that, in hearing the appeal in the planning application, the Minister had no authority to contravene the development plan and that in any event he could not have done so without complying with the requirements laid down in s. 26, sub-s. 3 of the Local Government (Planning and Development) Act, 1963. It was plain that he had failed to do so. In the result the planning permission was declared to be invalid.
Pine Valley purchased the lands with the benefit of the Minister’s planning permission. They purchased them in the belief that they would be able to develop them in accordance with the Minister’s planning permission. That planning permission having been declared to be a nullity, they complain that they may now use the lands only for agricultural purposes. This means, they say, that they will lose heavily on their investment. They blame it all on the Minister’s invalid permission. In the proceedings they have instituted in the High Court they claim, amongst other things, damages against the Minister (now the Minister for the Environment) and against the State. McMahon J. in the High Court held that the Minister’s error in issuing an invalid permission did not give the plaintiffs any cause of action, so he dismissed the plaintiffs’ claim. This appeal is against that decision.
The conclusion of McMahon J. that no action lies was based on a consideration of five agreed points of law argued before him. Those five points may be reduced to two questions:
(1). Does an action for breach of statutory duty, or for negligence, or for negligent misrepresentation, lie against the Minister for having issued the planning permission without jurisdiction?
(2). Does an action lie against the State for damages for breach of the constitutional rights guaranteed by Article 40, s. 3, sub-s. 1 or Article 40, s. 3., sub-s. 2 of the Constitution?
As to (1), the evidence which was given in the High Court, and which was accepted by McMahon J., was that in granting this planning permission, the Minister acted in accordance with the best legal advice available to him, namely that of the person who at the time was the senior legal adviser to his department.
The scheme of the Planning Acts shows that certain functions are vested in the Minister, presumably because his ministerial portfolio is specially concerned with the environment and because he has at his disposal certain legal and other experts. If in the discharge of his duties under the Acts he makes a particular decision in a planning appeal, after being advised by his senior legal adviser that he is legally entitled to do so, and if it turns out later that on a true construction of his statutory powers he was not entitled to do so, it does not follow that he was negligent in making the questioned decision. His duty being to give his decision with the care and circumspection to be expected from a reasonably careful minister, I would hold that if he follows the opinion of his department’s senior legal adviser to the effect that he is legally entitled to make the decision in question, he cannot be successfully accused of negligence if the decision is later held judicially to have been unauthorised by the statute. I would therefore acquit the Minister of the charge of negligence.
Breach of statutory duty may occur in a variety of circumstances and with a variety of legal consequences. Here we are concerned only with a breach of statutory duty in the making of a decision which has been committed by statute to the decision-maker. The weight of judicial opinion as stated in the decided cases suggests that the law as to a right to damages in such a case is as follows. Where there has been a delegation by statute to a designated person of a power to make decisions affecting others, unless the statute provides otherwise, an action for damages at the instance of a person adversely affected by an ultra vires decision does not lie against the decision-maker unless he acted negligently, or with malice (in the sense of spite, ill-will or suchlike improper motive), or in the knowledge that the decision would be in excess of the authorised power: see, for example, Dunlop v. Woollahra Municipal Council [1982] A.C. 158; Bourgoin S.A. v.Ministry of Agriculture [1985] 3 All E.R. 585. While the law as I have stated it may be lacking in comprehensiveness I believe it reflects, in accordance with the requirements of public policy, the limits of personal liability within which persons or bodies to whom the performance of such decisional functions are delegated are to carry out their duties.
Because the Minister granted the invalid planning permission on the advice of the senior legal adviser of his department, he must be acquitted of negligence in making that decision. For the same reason he must be acquitted of negligently misrepresenting the planning permission to be a valid permission when in fact it turned out to have been an invalid one to the detriment of the plaintiffs. It is conceded that the Minister acted without malice or any improper motive and it is obvious that he believed the planning permission to be a good one, so the charge of negligent misrepresentation has not been made out. It has been urged in particular on behalf of the plaintiffs that because the grant by the Minister of the planning permission was in disregard of the requirements of s. 26, sub-s. 3 of the Act of 1963 (requiring advance public notification of the grant of the permission and allowing objections and recommendations from the public to be heard), his conduct in granting the permission was such an obvious abuse of his functions that he should be held to have been negligent. However, since the evidence was that the Minister’s deviation from what was required of him by the statute was something which successive senior legal advisers to his department had advised to be within his legal competence, I would hold that the grant of planning permission in those circumstances did not amount to negligence of any kind on his part.
I would accordingly uphold the decision of McMahon J. that the plaintiffs have no cause of action for damages against the Minister.
As to (2), the question whether the plaintiffs have a claim for damages against the State under Article 40, s. 3, sub-s. 1 or Article 40, s. 3, sub-s. 2 of the Constitution depends essentially on the true interpretation of those constitutional provisions in the light of the facts of the case.
Article 40, s. 3, sub-s. 1 states:
“The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.”
The terms of this guarantee with its conditional assurance that the laws of the State will defend and vindicate the personal rights of the citizen, can hardly be said to lay the foundation for a claim for damages against the State in a case such as this. Article 40, s. 3, sub-s. 1 in my opinion is not relevant to a case such as the present where the complaint is essentially not of a failure to defend and vindicate a personal right but of an injustice alleged to have been actually done to a personal right. Such a complaint falls to be decided under Article 40, s. 3, sub-section 2.
Article 40, s. 3, sub-s. 2 proceeds to give particularity and specific force to the general guarantee set out in Article 40, s. 3, sub-section 1. It is in the following terms:
“The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.”
Because the plaintiffs’ case here is concerned with an injustice alleged to have been actually done to a property right, we need not concern ourselves with the State’s duty under the earlier part of Article 40, s. 3, sub-s. 2 as the protector from unjust attack of the personal rights intended to be protected by the guarantee a duty which incidentally is qualified by the words “as best it may” (chomh fada lena chumas). No such qualification is attached to the State’s duty to vindtcate a citizen’s property right (as one of the enumerated rights) when an injustice has actually been done to such right.
The first question, therefore, to be considered under this head of the case is whether an injustice has been done to a property right. Let us consider the relevant facts. In March, 1977, the Minister granted an outline planning permission to Patrick J. Thornton for the development of these lands for industrial, warehouse and office development. The lands, which up to then had only an agricultural value because they were zoned in the development plan for the further development of agriculture and for the preservation of open space amenity, were immediately enhanced in value as a result of the development permission granted by the Minister. So much so
that in November, 1978, Mr. Thornton was able to sell them on the open market, with the Minister’s development permission attached, to Pine Valley for £550,000. It cannot be denied that when the lands were then purchased, the shareholders in Pine Valley had, in the eyes of the law as then understood, acquired through their company valuable property rights in the lands, based on the Minister’s development permission. The State, by the provisions of the Local Government (Planning and Development) Act, 1963, had represented that the Minister’s development permission would enure for the benefit of Pine Valley and of all subsequent owners of the land. It is said on behalf of the plaintiffs that if the development permission had been valid the lands would by now become worth over £2m.
Unfortunately, as we have seen, the development permission was later found by this Court to have been a nullity. This meant that Pine Valley expended £550,000 on the purchase of lands which without the development permission would have been worth much less than that sum.
While the facts as I have stated them have not been proved in evidence or admitted they derive from a reply given by the plaintiffs to a notice for particulars served by the defendants they may be broadly taken as the basis of the contention now made that the shareholders in Pine Valley have suffered an injustice in respect of their property rights in the lands in question. If this contention of Pine Valley fails, then the consequential and secondary claims of the other plaintiffs Healy Holdings Ltd. and Daniel Healy must also fail.
It is to be assumed that there was a conveyance by deed of the lands in question to Pine Valley. This conveyance must have contained, either expressly, or by implication under s. 7 of the Conveyancing Act, 1881, a covenant for title on the part of the vendor. When, as a result of the decision of this Court that the Minister’s planning permission was a nullity, there would have been a breach of the vendor’s covenant for title, which would have given Pine Valley a cause of action for damages against the vendor for breach of that covenant. But even if, for one reason or another, such a claim for breach of covenant did not lie, another form of proceedings could have been used by Pine Valley to prevent the unjust enrichment which may be said to have accrued to the vendor through getting money from Pine Valley for a planning permission which turned out to be worthless. So much of the purchase price as was attributable to the planning permission was paid under a mistake of law, but in my opinion it would be recoverable no less than if it had been paid under a mistake of fact: see Goff and Jones, The Law of Restitution, 2nd edition (1978), page 91. Pine Valley have not shown that they could not recover their loss in that way. It may therefore be said that they have failed to prove that an injustice has been done to them for the purposes of Article 40, s. 3, sub-section 2.
However, even if it be accepted that Pine Valley have suffered a financial loss by reason of the invalid planning prmission, it does not follow that their claim on constitutional grounds should succeed.
Within months of the decision of this Court in February, 1982, that the planning permission was invalid, the State did its best to put matters right, as far as constitutionally possible, by the enactment of the Local Government (Planning and Development) Act, 1982. Section 6 of that Act had the effect of giving retrospective validity to planning permissions such as this granted on appeal prior to the 15th March, 1977, save where such retrospective validation would conflict with a constitutional right of any person. This meant that Pine Valley were excluded from the benefit of the section, for they had exercised their constitutional right to litigate the validity of the planning permission in the Courts. That exclusion has been attacked by counsel for Pine Valley as being unfairly discriminatory as far as they are concerned, but in my view, while a discrimination has resulted, the primary and overriding purpose of the section was to avoid an unconstitutional invasion of the judicial domain by attempting to give validity to any planning permission which the Courts may have held to be lacking in validity. It would follow that no injustice has been done to Pine Valley by s. 6 of the Act of 1982.
Whether Pine Valley’s claim be considered under Article 40, s. 3, sub-s. 2 or under Article 40, s. 3, sub-s. 3 I would hold that it has not been shown that the State has not respected and, as far as practicable, defended and vindicated the property rights in question or protected as best it may those rights from unjust attack or that an injustice has been done which requires vindication. I consider that the exemption of the State from liability in damages for the Minister’s invalid planning permission is not alone not an unconstitutionality but is in harmony with the due operation of the organs of government established under the Constitution.
For the foregoing reasons I would dismiss this appeal.
Griffin J.
I agree with the judgments which have been read.
Hederman J.
I agree with the Chief Justice.
Art 26 and The Planning and Development Bill, 1999
[2000] IESC 20
Articles 40.3.2 and 43
Article 43 of the Constitution under the heading “Private Property” provides that:-
“1.1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2.1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
Article 40.3 provides that:-
“1 The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2 The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.”
The decided cases demonstrate that the interpretation of these Articles and, in particular, the analysis of the relationship between Article 40.3.2 and Article 43 have not been free from difficulty.
At a comparatively early stage in the history of the Constitution, the former Supreme Court in Buckley v. The Attorney General [1950] I.R. 67, emphatically rejected the proposition that the effect of Article 43 was merely to prevent the total abolition of private property in the State. It was also made clear that the courts were entitled to determine whether, in any particular case, a restriction of rights of private property was required by the exigencies of the common good. The finding by the court in a later case, Attorney General v. Southern Industrial Trust Ltd. (1960) 94 I.L.T.R. 161, that the delimitation of private property rights and the assessment of what the common good required were “matters primarily for the consideration of the Oireachtas” has been recognised in subsequent authorities as being in conflict with the statement of the law in Buckley v. The Attorney General and the former decision has not been followed: see The Central Dublin Development Association v. Attorney General (1969) 109 I.L.T.R. 69 and Blake v. The Attorney General [1982] I.R. 117.
In the latter case, which concerned a challenge to the constitutionality of the Rent Restrictions Act, 1960, O’Higgins C.J. speaking for this Court, drew the following distinction between the effects of Articles 43 and 40 at p. 135:-
“[Article 43] is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading ‘personal rights’ and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property.”
In that case, the court held that the legislation in question could not be regarded as regulating or delimiting the property rights comprehended by Article 43 and that, accordingly, its validity fell to be determined solely by reference to the provisions of Article 40.3.2. The sole question to be determined was whether the impugned provisions of the Act of 1960, constituted an unjust attack on the property rights of the plaintiffs.
It is clear, particularly when the later decisions of the court are examined, that this approach cannot now be adopted without at least some reservations. It is no doubt the case that the individual citizen who challenges the constitutional validity of legislation which purports to delimit or regulate the property rights undertakes the burden of establishing that the legislation in question constitutes an unjust attack on those rights within the meaning of Article 40. It is also possible to envisage an extreme case in which the Oireachtas by some form of attainder legislation purported to confiscate the property of an individual citizen without any social justification whatever. In such a case, no inquiry would be called for as to whether the legislation also conformed to the requirements of Article 43. The challenge typically arises, however, as it has done here, in circumstances where the State contends that the legislation is required by the exigencies of the common good. In such cases, it is inevitable that there will be an inquiry as to whether, objectively viewed, it could be regarded as so required and as to whether the restrictions or delimitations effected of the property rights of individual citizens (including the plaintiff in cases other than references under Article 26) are reasonably proportionate to the ends sought to be achieved.
That the provisions of Article 43 are relevant to the inquiry undertaken by the courts where they are considering a challenge to the constitutionality of legislation on the ground that it constitutes an unjust attack on the property rights of the citizen within the meaning of Article 40 was made clear in the subsequent decision of this court in Dreher v. Irish Land Commission [1984] I.L.R.M. 94, which it will be necessary to consider at a later point.
The objectives sought to be achieved by Part V of the Bill are clear: to enable people of relatively moderate means or suffering from some form of social or economic handicap to buy their own homes in an economic climate where housing costs and average incomes make that difficult and to encourage integrated housing development so as to avoid the creation of large scale housing developments confined to people in the lower income groups.
It can scarcely be disputed that it was within the competence of the Oireachtas to decide that the achievement of these objectives would be socially just and required by the common good. It is accepted on behalf of the State that the use of planning legislation, which has traditionally been concerned with the orderly and beneficial planning and development of the physical environment, for a purely social objective of this nature is novel and even radical. The court is satisfied, however, that it is an objective which it was entirely within the competence of the Oireachtas to decide to attain, as best it could, by the use of planning machinery. The essential question for resolution, in the context of Article 40 and Article 43, is whether the means employed constitute an unjust attack on property rights.
That statutory scheme has been fully explained in the earlier part of this judgment. It clearly envisages that a landowner who develops his property for housing and who is not exempted by other provisions of Part V will in general be required to cede up to 20% of the land to the housing authority for the provision of houses at a price which reflects the existing use of the land (normally agricultural value) and which, accordingly, will be significantly below the market value of the land, if by market value is meant the price which the property might be expected to fetch if sold on the open market enjoying the same right to develop as that enjoyed by the landowner in respect of the remaining 80% or more of the lands in question. Compensation will, accordingly, be paid for the undoubted restriction on the exercise by the landowner of his property rights, but it will in that sense be compensation at a level significantly short of its market value.
The approach which, in general, should be taken by the courts in considering whether a constitutional right has been validly abridged were stated as follows by Costello J., as he then was, in Heaney v. Ireland [1994] 3 I.R. 593 in a passage subsequently approved by this court at p. 607:-
“In considering whether a restriction on the exercise of rights is permitted by the Constitution, the courts in this country and elsewhere have found it helpful to apply the test of proportionality, a test which contains the notions of minimal restraint on the exercise of protected rights, and of the exigencies of the common good in a democratic society. This is a test frequently adopted by the European Court of Human Rights (see, for example, Times Newspapers Ltd. v. United Kingdom (1979) 2 E.H.R.R. 245) and has recently been formulated by the Supreme Court in Canada in the following terms. The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right. It must relate to concerns pressing and substantial in a free and democratic society. The means chosen must pass a proportionality test. They must:-
(a) be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations;
(b) impair the right as little as possible; and
(c) be such that their effects on rights are proportional to the objective; see Chaulk v. R. [1990] 3 S.C.R. 1303, at pages 1335 and 1336.”
The same learned judge applied those principles to private property rights in Daly v. The Revenue Commissioners [1995] 3 I.R. 1, as did Keane J. in Iarnrod Eireann v. Ireland [1996] 3 I.R. 321 in the following passage at p. 361:-
“If the State elects to invade the property rights of the individual citizen, it can do so only to the extent that this is required by the exigencies of the common good. If the means used are disproportionate to the end sought, the invasion will constitute an ‘unjust attack’ within the meaning of Article 40, s. 3, sub-section 2.”
In considering the application of these principles to Part V of the Bill, it is important to bear in mind that, where the property of the citizen is compulsorily acquired by the State or one of its agencies for what are deemed by the legislature to be important social objectives, it has in general been recognised that he or she is entitled to at least the market value of the property so taken as constituting fair compensation for the invasion of his property rights. However, that this generally recognised right, although unquestionably of importance, is not absolute was made clear in two decisions of this court.
In Dreher v. Irish Land Commission [1984] I.L.R.M. 94, it was contended that the statutory provisions enabling the price to be paid by the Land Commission for land compulsorily acquired to be paid in land bonds equal in nominal value to the sum fixed by the judicial commissioner was inconsistent with Articles 40 and 43 of the Constitution. The facts in Dreher v. Irish Land Commission were that the Land Commission had made a compulsory acquisition of lands, the property of the plaintiff, in 1967. The price of the lands had been fixed by it at the sum of £24,000 to be paid in 8% land bonds equal in nominal amount to £24,000. The plaintiff appealed against the order and the judicial commissioner fixed the price of the land at £30,000 payable in 93/4% bonds equal in nominal value to £30,000. The plaintiff did not want to take the land bonds and sought cash instead. The Land Commission was only empowered to purchase for cash where land was offered to it for sale under s. 27 of the Land Act, 1950, and when there was a right to vacant possession and the Land Commission required the land for the provision of new holdings. On the appointed day for the purposes of the legislation, £30,000 worth in nominal value of 93/4% bonds were placed to the credit of the plaintiff. He would have been entitled to dispose of the bonds as from the moment he made title to the lands or within three weeks or so of making title. At that date, the value of the bonds was 98: they continued to fluctuate in value and at one stage actually stood at 101.5. At the date of the trial, however, they had fallen to 71.
This court unanimously rejected the plaintiff’s claim that these provisions were in violation of Articles 40 and 43. In the course of his judgment, Walsh J. said at p. 96:-
“It does not necessarily follow that the market value of lands at any given time is the equivalent of just compensation as there may be circumstances where it could be considerably less than just compensation and others where it might in fact be greater than just compensation. The market value of any property whether it be land or chattels or bonds may be affected in one way or another by current economic trends or other transient conditions of society.”
It was pointed out in that case that there was a statutory requirement that the land bonds should be issued at a rate which kept them as near as could be to par value during the period of the issue. As already noted, during the currency of the period when they could have been realised by the plaintiff, they actually stood at one stage above par. The case, accordingly, should be regarded as one which was essentially decided on its special facts, as Henchy J. made clear in a brief concurring judgment.
The plaintiff in O’Callaghan v. Commissioners of Public Works [1985] I.L.R.M. 364, had bought land at Loughshinny on the coast of County Dublin which included a 381/2 acre site occupied by a prehistoric promontory fort. This had been listed for preservation under the relevant legislation, which also prohibited the owner from interfering with the site without giving prior notice to the Commissioners of Public Works. Soon after acquiring the land, the plaintiff, who was aware that the land contained an ancient monument, employed contractors to plough a part of the area occupied by the fort. The Commissioners then made a preservation order which prevented the plaintiff from carrying out the ploughing operations on the lands in question. The legislation contained no provision for the payment of compensation in respect of such an order and the plaintiff instituted proceedings claiming that this was an unjust attack on the property rights of citizens within the meaning of Article 40.3.2.
In the judgment of the court upholding the High Court decision refusing the plaintiff’s claim, O’Higgins C.J. said at p. 368 that:-
“the absence of such a provision for the payment of compensation to him in respect of a limitation of use of which he was substantially on notice before his purchase and which is a requirement of what should be regarded as the common duty of all citizens – to preserve such a monument, can be no ground for suggesting that the prohibition or limitation is an unjust attack on his property rights. In short, by the impugned statute as the occasion requires, the State, through s. 8, delimits by law, not the right of private ownership or the general right to transfer etc. but the exercise of those rights – in this instance the user of land – so that that user will be reconciled with the exigencies of the common good – here, the national aspirations as set out in the Preamble and Article 1 of the Constitution.”
Again, while the court held in that case that the absence of any provision for compensation did not invalidate the imposition by statute of the restriction in question, the fact that the plaintiff was aware of the existence of such a restriction at the time that he acquired the land seems to have played at least some part in the ultimate result.
There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property. As Walsh J. in Dreher v. Irish Land Commission [1984] I.L.R.M. 94 pointed out, even that may not be a sufficient measure of compensation in some cases: hence the additional elements of compensation payable in compulsory acquisitions of land effected under the Land Clauses Consolidation Act, 1845, as determined under the Acquisition of Land (Assessment of Compensation) Act, 1919, as subsequently amended, by virtue of which the landowner is to be compensated, not merely for the market value of his land, but also for such additional elements of damage to him as disturbance, injurious affection and severance.
There are, however, special considerations applicable in the case of restrictions on the use of land imposed under planning legislation, such as those now under consideration. Under the Local Government (Planning and Development) Act, 1963 proposed to be repealed and re-enacted with many modifications by the Bill, where the value of an interest of any person existing in land to which a planning decision related was reduced, the person was entitled to be paid by way of compensation the amount of such reduction of value and, in the case of the occupier of the land, the damage (if any) to his trade, business or profession carried on the land. This prima facie entitlement to compensation was, however, severely curtailed in a number of respects and the validity of these provisions in constitutional terms was considered in detail by Kenny J. in The Central Dublin Development Association v. Attorney General (1969) 109 I.L.T.R. 69. He rejected the contention that such limitations constituted an arbitrary confiscation of such rights: he said that a provision, in particular circumstances envisaged by the legislation, that an interference with one of the rights of property was not to be the subject matter of compensation was not a breach of Article 43 and did not fail to defend and vindicate the personal rights of property. He also concluded that it was not an unjust attack upon such rights.
Planning legislation of the nature now under consideration is of general application and has been a feature of our law ever since the enactment of the Town and Regional Planning Act, 1934, although it did not take its modern, comprehensive form until the enactment of the Act of 1963. Every person who acquires or inherits land takes it subject to any restrictions which the general law of planning imposes on the use of the property in the public interest. Inevitably, the fact that permission for a particular type of development may not be available for the land will, in certain circumstances, depreciate the value in the open market of that land. Conversely, where the person obtains a permission for a particular development the value of the land in the open market may be enhanced. As Finlay C.J. observed in Pine Valley Developments v. Minister for the Environment [1987] I.R. 23 at p. 37:-
“What the Minister [for Local Government] was doing in making his decision in 1977 to grant outline planning permission to the then owner of these lands was not intended as any form of delimitation or invasion of the rights of the owner of those lands but was rather intended as an enlargement and enhancement of those rights.
The purchase of land for development purposes is manifestly a major example of a speculative or risk commercial enterprise. Changes in market values or economic forces, changes in decisions of planning authorities and the rescission of them, and many other factors, indeed, may make the land more or less valuable in the hands of its purchasers.” [Emphasis added]
Decisions of the United States Supreme Court in this area are of limited assistance, having regard to the significantly different terms of the Fifth Amendment which simply provides that:-
“Private property [shall not] be taken for public use, without just compensation.”
However, it may be noted that in United States v. Fuller (1972) 409 U.S. 488, it was held that where the government had”condemned” – i.e. sought to acquire compulsorily – certain lands, the assessment of compensation could legitimately be made on the basis that an element of the value of the land arising from the availability of grazing permits in respect of other land need not be taken into account. Rehnquist C.J. speaking for the court said at p. 492:-
“These cases go far toward establishing the general principle that the Government as condemnor may not be required to compensate a condemnee for elements of value that the Government has created, or that it might have destroyed under the exercise of governmental authority other than the power of eminent domain [i.e. compulsory purchase]. If, as in United States v. Rands (1967) 389 U.S. 121 the Government need not pay for value that it could have acquired by exercise of a servitude arising under the commerce power, it would seema fortiori that it need not compensate for value that it could remove by revocation of a permit for the use of lands that it owned outright.”
In the present case, as a condition of obtaining a planning permission for the development of lands for residential purposes, the owner may be required to cede some part of the enhanced value of the land deriving both from its zoning for residential purposes and the grant of permission in order to meet what is considered by the Oireachtas to be a desirable social objective, namely the provision of affordable housing and housing for persons in the special categories and of integrated housing. Applying the tests proposed by Costello J. in Heaney v. Ireland [1994] 3 I.R. 593 and subsequently endorsed by this court, the court in the case of the present Bill is satisfied that the scheme passes those tests. They are rationally connected to an objective of sufficient importance to warrant interference with a constitutionally protected right and, given the serious social problems which they are designed to meet, they undoubtedly relate to concerns which, in a free and democratic society, should be regarded as pressing and substantial. At the same time, the court is satisfied that they impair those rights as little as possible and their effects on those rights are proportionate to the objectives sought to be attained.
Nor in the view of the court could the scheme be regarded as arbitrary, unfair or based on irrational considerations. It was reasonable to differentiate between those persons who bought their land after the Bill had been published and those who had bought before and to afford somewhat more generous treatment to the latter category. The court is further satisfied that it was not unfair or arbitrary to distinguish between those who acquired land by purchase before August, 1999, and those who acquired it by inheritance before that date. It is true that the latter category are not to be entitled to interest, but there is undoubtedly a distinction in principle between their position and that of those who purchased property: it was not unreasonable to treat the latter as being entitled to interest in respect of the purchase money paid by them, whether in the form of mortgage interest or otherwise, depending on the circumstances of the particular purchase. At the same time, the impact of the statutory scheme is limited so that those carrying out developments consisting of the provision of four or fewer houses or housing on land of 0.2 hectares or less can obtain certificates relieving them from the provisions of section 96. In addition, as already noted, there are elaborate provisions enabling the planning authority to “claw back” profits effected on the resale of houses built in pursuance of the statutory scheme.
Support for the view that the statutory scheme set out in Part V of the Bill does not constitute an impermissible violation of private property rights is to be found in the decision of the European Court of Human Rights in James v. United Kingdom [1986] 8 E.H.R.R. 123. In that case the trustees of the Westminster Estate in London had been deprived of the ownership of a number of properties forming part of the estate through the exercise by tenants of those properties of rights of acquisition conferred by the relevant English legislation. They complained inter alia that the compulsory transfer of these properties and the calculation of the price received for the transfer amounted to a breach of Article 1 of Protocol No. 1 of the European Convention on Human Rights and Fundamental Freedoms which reads:-
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
One of the grounds of challenge was that the Act deprived the applicants of their property at a price “always below, and often far below the market value”.
Having found that the stated social objectives of the legislation in question came within what is described in the jurisprudence of that court as the “margin of appreciation” of the contracting state, the court went on to find as follows at p. 147:-
“Like the Commission, the court observes that under the legal systems of the contracting States, the taking of property in the public interest without payment of compensation is treated as justifiable only in exceptional circumstances not relevant for present purposes. As far as Article 1 is concerned, the protection of the right of property it affords would be largely illusory and ineffective in the absence of any equivalent principle. Clearly, compensation terms are material to the assessment whether the contested legislation respects a fair balance between the various interests at stake and, notably, whether it does not impose a disproportionate burden on the applicants.
The court further accepts the Commission’s conclusion as to the standard of compensation: the taking of property without payment of an amount reasonably related to its value would normally constitute a disproportionate interference which could not be considered justifiable under Article 1. Article 1 does not, however, guarantee a right to full compensation in all circumstances. Legitimate objectives of ‘public interest’ such as pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market value. Furthermore, the court’s power of review is limited to ascertaining whether the choice of compensation terms falls outside the State’s wide margin of appreciation in this domain.”
It will be seen that the tests adopted by the European Court of Human Rights in that case do not differ in substance from those which have been applied by the courts in this jurisdiction in this area. The court is satisfied that it has not been established that Part V of the Bill is repugnant to Articles 40.3.2 and 43 of the Constitution.
In these circumstances, it is not necessary to express any opinion on the submission advanced by the Attorney General that the court , in deciding this reference, should have regard to the Directive Principles of Social Policy set out in Article 45 of the Constitution. The court notes that, in the High Court judgments where account was taken of the Directive Principles, no question appears to have arisen of their application in the making of laws by the Oireachtas. The question as to whether those High Court decisions were correctly decided and, if so, whether they should be followed in a case such as the present must await resolution in another case.
Article 40.1
Article 40.1 provides that:-
“All citizens shall, as human persons, be held equal before the law. This shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function.”
Speaking for the majority of this court in Quinn’s Supermarket v. Attorney General [1972] I.R. 1 Walsh J. said of this Article at p. 13:-
“… this provision is not a guarantee of absolute equality for all citizens in all circumstances but it is a guarantee of equality as human persons and (as the Irish text of the Constitution makes quite clear) is a guarantee related to their dignity as human beings and a guarantee against any inequalities grounded upon an assumption, or indeed a belief, that some individual or individuals or classes of individuals, by reason of their human attributes or their ethnic or racial, social or religious background, are to be treated as the inferior or superior of other individuals in the community. This list does not pretend to be complete; but it is merely intended to illustrate the view that this guarantee refers to human persons for what they are in themselves rather than to any lawful activities, trades or pursuits which they may engage in or follow.”
It has been suggested by some commentators that this is a somewhat narrow construction of the guarantee of equality contained in Article 40, but for reasons which will shortly appear, the court is satisfied that it is unnecessary in the present proceedings to consider whether those criticisms are well founded.
The arguments advanced by counsel assigned by the court under this heading necessarily overlapped to a considerable extent with those advanced by them in relation to the private property articles. The court has already rejected the argument that the legislation unfairly and invidiously discriminates between landowners who propose to develop their land for housing and persons who do not intend to develop their land. It has also rejected arguments based on the different treatment for particular categories of person in the assessment of compensation.
It was also urged that the general scheme of Part V discriminated invidiously and unfairly between the affected landowners and the persons benefiting from the scheme and that the result was to require some people to bear a disproportionate share of what should be the responsibility of society as a whole.
The court is satisfied that these arguments are not well founded. The fact that a particular planning scheme may result in the conferring of benefits on some categories of persons seen by the Oireachtas as being in particular need of assistance and that this is done at the expense of landowners who are benefiting financially from related planning decisions can be said to be a form of unequal treatment. However, Article 40 does not preclude the Oireachtas from enacting legislation based on any form of discrimination: as has often been pointed out, far from promoting equality, such an approach would simply result in greater inequality in our society. As Barrington J. pointed out in Brennan v. The Attorney General [1994] I.L.R.M. 355, in a passage subsequently approved by this court in The Employment Equality Bill, 1996 [1997] 2 I.R. 321, where classifications are made by the Oireachtas for a legitimate legislative purpose, are relevant to that purpose and treat each class fairly, they are not constitutionally invalid. The court is satisfied that, in the present case, the Oireachtas in its legislation has met those requirements.
It should be pointed out that, in reaching that conclusion, the court has had regard to the observation by Kenny J. in Ryan v. The Attorney General [1965] I.R. 294, that the presumption that every Act of the Oireachtas is constitutional until the contrary is clearly established applies with particular force to legislation dealing with controversial social and economic matters. It is peculiarly the province of the Oireachtas to seek to reconcile in this area the conflicting rights of different sections of society and that clearly places a heavy onus on those who assert that the manner in which they have sought to reconcile those conflicting rights is in breach of the guarantee of equality.
The court is satisfied that it has not been established that Part V of the Bill is repugnant to Article 40 of the Constitution.
Article 15.2
Article 15.2.1 of the Constitution provides that:-
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”
In Cityview Press v. An Chomhairle Oiliúna [1980] I.R. 381 O’Higgins C.J., speaking for the court, explained the criteria for determining whether a delegation of legislative power is permissible under that Article at p. 399 as follows:-
“In the view of this Court, the test is whether that which is challenged as an unauthorised delegation of parliamentary power is more than a mere giving effect to principles and policies which are contained in the statute itself. If it be, then it is not authorised; for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so under the Constitution. On the other hand, if it be within the permitted limits – if the law is laid down in the statute and details only are filled in or completed by the designated Minister or subordinate body – there is no unauthorised delegation of legislative power.”
To the same effect is the decision of this court in Laurentiu v. Minister for Justice [1999] 4 I.R. 26.
In the present case, it is undoubtedly envisaged in the statutory scheme that some matters are to be determined either by planning authorities in relation to their particular areas or by the Minister for the Environment.
As already noted, counsel assigned by the court submitted that the requirement in s. 93(3) that a planning authority, in determining the eligibility of a person for the purposes of Part V, should take into account “any other financial circumstances” of the eligible person and persons who might reasonably be expected to reside with them had left a huge area of discretion to the planning authority which violated the provisions of Article 15.2.
In the light of the applicable legal principles to which reference has already been made, the court is unable to accept that proposition. The general policy of the Act is clear: it is that what is called”affordable housing” should be made available under the machinery provided in Part V to persons defined as “eligible persons”.Subsection (3)(b) does no more than allow the planning authority to take into account other financial circumstances of particular persons who might come within the category of “eligible persons” and the Oireachtas, in the view of the court, was fully entitled, having laid down the general policy of the Bill in this context, to allow additional matters relating to particular applicants to be dealt with at the discretion of the planning authorities.
The Court is satisfied that it has not been established that the provisions of Part V of the Bill are repugnant having regard to Article 15.2 of the Constitution.
Decision
The decision of the Court is, for the reasons stated, that none of the provisions of Part V of the Bill are repugnant to the Constitution.
Maher v. Minister for Agriculture, Food and Rural Development
[2001] IESC 32; [2001] 2 IR 139; [2001] 2 ILRM 481 (30 March 2001)
Keane CJ
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”
40. The second ground is that S.I. 2000 constitutes an unjust attack on the property rights of the applicants, in the form of their respective milk quotas, guaranteed by Articles 40.3.1º and 2º and 43 of the Constitution.
41. It was conceded on behalf of the appellants that, if the making of
42. S.I. 2000 was necessitated by the obligations of Ireland’s membership of the Communities within the meaning of Article 29.4.7º of the Constitution, the applicants could not succeed, even if the regulations were otherwise in violation of the Constitution.
The High Court judgment
43. In the High Court, the learned High Court judge held that the discretions which were left to the member States were within the principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union and that S.I. 2000 did not go beyond what was required by those principles and policies. She said that the decision of the Minister that quotas should go to active milk producers was in accordance with the stated policy of the Regulations. She was of the view that S.I. 2000 was necessitated by the obligations of membership of the EU. However, she was also of the view that, because the choices made in S.I. 2000 were within the principles and policies of the milk quota scheme, it could also be regarded as valid secondary legislation which was not contrary to Article 15.2.1º of the Constitution.
44. As to the claim that S.I. 2000 was in breach of the property rights of the appellants, the learned High Court held that it was clear from the jurisprudence of the European Court of Justice that the right to property safeguarded by the community legal order did not include the right to dispose for profit of an advantage such as a milk quota. She concluded that the nature of the milk quota, which was created by European law, must bear the same meaning in domestic law as in the legal order of the European Union.
45. The learned High Court judge had been urged by counsel for the appellants to have regard to the Dáil Debates on the Eleventh Amendment of the Constitution Bill in determining what was meant by the expression “necessitated by the obligations of membership …” in Article 29.4.7º. She rejected the submission that she was entitled to have regard to what was said during the course of the Oireachtas debates, but had regard de bene esse to the fact that during the passage of the Bill through the Oireachtas the word “necessitated” was substituted for the word “consequent on” . However, she was also of the view that that did not assist the arguments advanced on behalf of the applicants as to the validity of S.I. 2000.
46. As already noted, the appellants have appealed from the judgment and order of the High Court. The respondents have served a notice to vary the judgment in so far as it could be construed as allowing the court to have regard to the amendment effected to the Eleventh Amendment of the Constitution Bill during its passage through the Oireachtas.
Submissions of the parties
47. Mr. Gerard Hogan S.C., on behalf of the applicants, did not invite the court to overrule its previous decision in Meagher to the effect that s. 3 of the 1972 Act was not invalid having regard to the provisions of the Constitution. He submitted, however, that in determining whether S.I. 2000 was itself “necessitated” by the obligations of EC membership and thus immune from constitutional scrutiny, the court should not follow in its entirety the reasoning by which the court arrived at its conclusions in that case. (It should be pointed out at this stage that the court in Meagher, having ruled on the constitutionality of s. 3 of the 1972 Act, went on to consider whether the specific regulations challenged in that case were intra vires and unanimously concluded that they were.) He said that, in so far as any of the judgments in that case suggested that the word “necessitated” should be equated to “convenient” or “desirable”, that reasoning should not now be followed. He submitted that the word “necessitated” clearly indicated that Article 29.4.7º allowed for the transfer of legislative, executive and juridical sovereignty to the European Union and the Communities only where this was a legal obligation resulting from membership of the EU and the Communities.
48. Mr. Hogan submitted that this approach to Article 29.4.7º was reinforced by the parliamentary history of the Third Amendment of the Constitution Bill, 1971: the words “consequent upon” originally used in the Bill had been replaced by “necessitated” at the committee stage. In the present case, the issue, accordingly, was as to whether the making of S.I. 2000 by the Minister in purported exercise of the powers conferred by s. 3 of the 1972 Act was a legal obligation deriving from our membership of the Communities and not simply a consequence of that membership.
49. Mr. Hogan further submitted that this construction of Article 29.4.7º was supported by the terms of Article 29.4.6º which provided that
“The State may exercise the options or discretions provided by or under Article 1.11, 2.5 and 2.15 [of the Amsterdam Treaty] and the Second and Fourth Protocols set out in the said Treaty but any such exercise shall be subject to the prior approval of both Houses of the Oireachtas.”
50. He submitted that this provision in the Constitution would have been quite unnecessary if legislative sovereignty could be surrendered to the European Union in the manner suggested by some of the reasoning in Meagher. Mr. Hogan further submitted that, having regard to the wide range of choices which a member State could make under the relevant Articles of the EC Regulation, it could not be said that, even adopting the reasoning of the court in Meagher, legislation in the form of a ministerial regulation was necessitated in this case by the obligations of EC membership and he cited in particular passages in the judgment of the court and of Denham J. in that case. He also cited the decision of Murphy J. as a High Court judge in Green .v. Minister for Agriculture (1990) 2 IR 17.
51. Mr. Hogan submitted that, assuming that S.I. 2000 was not shielded from constitutional scrutiny by virtue of Article 29.4.7º, it clearly violated Article 15.2.1º of the Constitution, since it constituted delegated legislation which went significantly further than simply giving detailed effect to principles and policies contained in a parent Act. He relied particularly in support of this proposition on the decisions of this court in Cityview Press Ltd. .v. AnCO , (1980) IR 381, O’Neill .v. Minister for Agriculture , (1997) 2 ILRM 435 and Laurentiu .v. Minister for Justice, Equality and Law Reform , (2000) 1 ILRM 1 and of the High Court in McDaid .v. Sheedy , (1991) 1 IR 1 and Lovett .v. Minister for Education , (1997) 1 ILRM 89.
52. Mr. Hogan submitted that, in determining whether S.I. 2000 was constitutionally valid, as being no more than the detailed implementation of principles and policies contained in parent legislation, it was immaterial that S.I. 2000 had been made in purported exercise of a power conferred by an EC Regulation, as distinct from a Directive, citing observations of the Court of Justice in Case 230/78 SPA Eridania – Zuccherifici . Mr. Hogan said that, while Mr. Evans in his affidavit had laid stress on the provisions of the Regulation enabling member States to take measures “with the aim of ensuring that reference quantities are solely attributed to milk producers” , it is nowhere said that this is a community objective which the regulation requires member States to implement: on the contrary, it simply enables member States who wish to pursue this policy objective so to do.
53. Mr. Hogan urged that it was clear from S.I. 2000 that the Minister had elected to make substantial and important policy choices, of which the most significant in practical terms was the effective breaking of the link between land and quota, save for family transactions. He said that the jurisprudence of the Court of Justice made it clear that, in areas where common rules applicable to all the member States are not laid down by a particular regulation, the member States in implementing the regulation in those areas are entitled to act in accordance with the procedural and substantive rules of their own national law, citing the decision of the Court of Justice in Kjell Kirllson .v. Svenska Jordbruksverket , Case C-292/97 (2000) ECR 1-2737. He also relied on Case C-258/93 Dominikanerinnen-Kloster altenhohenau , (1995) ECR 1-4069.
54. As to the claimed violation of the applicants’ property rights, Mr. Hogan accepted that the Court of Justice had generally taken the view that milk quotas do not constitute a property right so far as community law is concerned and referred in this context to R. .v. Ministry of Agriculture, xp. Bostock , Case C-2/92 (1994) ECR 1-955. However, that case was concerned with the right to dispose of a quota for profit, whereas the present case involved what was effectively a form of compulsory acquisition by the State of a quota at a price substantially less than the prevailing market value. He said that, in these circumstances, a milk quota might qualify for protection as a property right which the member States were obliged as a matter of community law to protect, citing the comments of the Advocate General in Damand .v. Haubtzollampt Trier , (KC-186/96) 1998 ECR 1-8529, 8541.
55. Mr. Hogan further submitted that, in any event, the dicta in Bostoch did not prevent such a right from being regarded as a property right for the purposes of Irish constitutional law. He pointed out that in Duff .v. Minister for Agriculture (KC-63/93 (1996) ECR 1569, the Advocate General had pointed out that the fact that the plaintiff’s legitimate expectations at community law level had not been infringed by the actions of the Minister did not prevent such a requirement being founded on principles of national law and that, in the event, that passage had enabled the plaintiff to succeed when the case returned to this court.
56. Mr. Hogan submitted that there was no valid reason why an intangible but valuable right such as a milk quota should not be regarded as a property right and, as such, it had been unquestionably violated by S.I. 2000.
57. On behalf of the respondents, Ms. Mary Finlay, S.C. submitted that, even if it were assumed that the making of S.I. 2000 by the Minister was not “necessitated” by the obligation of Ireland’s membership of the European Communities within the meaning of Article 29.4.7º of the Constitution, it was intra vires s. 3 of the 1972 Act as representing the detailed implementation of principles and policies set out in parent legislation, in accordance with the law as found by this court in Cityview Press Ltd. .v. AnCO and Laurentiu .v. Minister for Justice, Equality and Law Reform .
58. Ms. Finlay submitted that the EC Regulations, which had direct effect in Ireland, were the equivalent of parent legislation in that they enabled the member States to exercise certain discretions in regard to the implementation of the milk quota scheme generally throughout the European Union.
59. Ms. Finlay submitted that, in the context of the common organisation of the market in milk and milk products, it was recognised that the position of producers varied in different areas throughout the Community and that this required different responses in different areas. It was for that reason that the Regulations empowered the member States to take certain limited decisions as to the precise way in which the COM was to be implemented in each member State. Such discretions had, however, to be exercised at all times in accordance with the Regulations and with a view to achieving the overall objectives and aim of the COM and in such a way as to avoid discrimination between producers in different parts of the Community.
60. Ms. Finlay submitted that s. 3 of the 1972 Act authorised the Minister to make regulations for the purpose of enabling the EC Regulations as to the milk quota and super levy scheme to have full effect in Ireland and that was the sole purpose of S.I. 2000. Accordingly, prima facie , S.I. 2000 was intra vires the powers conferred on the Minister by s. 3 of the 1972 Act.
61. Ms. Finlay submitted that the super levy/milk quota regime was established by EC regulations and that the respective roles of the Council of Ministers and EC Commission on the one hand and the member States on the other hand in the COM was analogous to the respective roles of the Oireachtas and the Executive in relation to purely domestic legislation. All the essential policies and principles relating to the COM were determined by the Council of Ministers and what was left of the member States were detailed implementing rules and limited permissible variations. The position of the Minister was thus not the same as that of the relevant ministers in O’Neill .v. Minister for Agriculture and Laurentiu .v. Minister for Justice and the making of S.I. 2000 complied with the test laid down in Cityview Press Ltd. .v. AnCO .
62. Ms. Finlay submitted that it was not correct to say that the break in the link between land and quota “effected by the 1999 EC Regulation” and S.I. 2000 was a radical new departure, as suggested on behalf of the applicants. Since the introduction of the general rule in 1984 that quota should transfer with the land, a series of exceptions had been created and those introduced by the 1999 Regulation were only the last in the sequence. She further submitted that Article 7(1) expressly obliged the member States to lay down detailed rules: S.I. 2000 were such detailed rules. As to the decision not to provide for the automatic transfer of quotas with land, this could only be done for the purpose of ensuring that quotas were solely attributed to active milk producers and this was what S.I. 2000 was intended to achieve.
63. Ms. Finlay submitted that restructuring schemes had also been authorised in the member States by EC law since 1987. The actions that could be taken by member States with a view to completing restructuring of milk production were exhaustively set out in Article 8 of the EC Regulation and in making the detailed rules the member States were constrained by the express provisions of that Regulation and the overall aims and policies of the CAP, COM in milk and milk products, the additional levy scheme and the relevant EU instruments. Ms. Finlay submitted that in making Regulation 27 relating to the temporary leasing of quota, the Minister was acting in accordance with the express obligation under Article 6.1. It was merely the precise terms of a detailed temporary leasing scheme which were left to be specified by the member State and this was what had been done in S.I. 2000.
64. As to the submission that Article 40.3.2º and 43 had been violated by
65. S.I. 2000, Ms. Finlay submitted that it was clear that a milk quota was not a property right and the opinion of the Advocate General in Duff .v. Minister for Agriculture was not authority for the proposition that the nature of the rights conferred by a milk quota on the appellants were different in Irish law.
66. Ms. Finlay submitted that there was no question of anything in the nature of a compulsory acquisition by the State of a quota at less than the prevailing market price. The quota was not acquired in any sense by the State: in the present case, the applicants were all persons who were no longer engaged in active milk production and who were entitled to release their quota, which would then be reallocated to an active producer who would pay them the specified price. Each of the applicants was simply endeavouring to earn a greater profit from the milk quota currently held by them than was permissible under the S.I. 2000 and were not seeking to use the quota for the purpose for which it was intended, i.e. the production of milk up to the amount of the quota.
67. If, contrary to the submissions, it was found that any of the provisions of S.I. 2000 prima facie violated the Constitution, it was submitted that they were “necessitated” by the obligation of membership of the European Union or of the Communities and hence were entitled to the protection of Article. 29.4.7º of the Constitution. Ms. Finlay submitted that it was clear from the decision of this court in Meagher that the fact that the member State had been left some element of choice or discretion as to the precise form a particular measure should take was perfectly consistent with the measure being necessitated by the obligations of EC membership. Thus, in Meagher, although the relevant directive contained no express provision as to the creation of sanctions, the court accepted that the nature of the sanctions to be imposed, including the penalties, were properly determined by regulation. She submitted that the somewhat broader approach to the construction of the phrase “necessitated by the obligations of membership” than that being contended for on behalf of the appellants was also consistent with the decision of this court in Crotty .v. An Taoiseach (1987) IR 713.
68. Ms. Finlay said that the respondents strongly resisted the proposition advanced by the appellants that the reasoning in Meagher should be reconsidered at this stage by the court. Meagher had been a decision on the constitutionality of s. 3 of the 1972 Act and had been continuously relied on since then by the State, approximately 498 statutory instruments having been made by various ministers under s. 3 of the 1972 Act.
69. As to the notice to vary, Mr Paul Gardiner S.C. on behalf of the respondents submitted that the decision of this court in People (DPP) .v. McDonagh (1996) 1 IR was not authority for the proposition that the parliamentary history of a particular bill was an admissible aid to the interpretation of an amendment of the Constitution effected by way of referendum. He said that to hold otherwise would be to derogate from the primary role of the people in determining whether the Constitution should be amended which had been emphasised in two recent decisions of this court, McKenna v. An Taoiseach (No 2) (1995) 2 IR 10 and Hanafin .v. Minister for the Environment (1996) 2 IR 321. He submitted that it followed that the court was not entitled to have regard to the fact that the words “consequent upon” originally used in the Third Amendment of the Constitution Bill had been replaced by “necessitated” at the committee stage.
…….
241. If a person’s rights or activities under such a regulatory regime were to be abridged or limited for purposes external or extraneous to those of the regulatory regime, any question of compensation which might arise would have to be approached from a different perspective. Such could arise, for example, where a state authority compulsory acquired portion of a farmer’s lands for public road or public housing to the extent that his entitlement to be attributed or ability to use a quota was reduced or eliminated altogether. Obviously this does not arise in this case
242. The substantive independent right which has been put in issue in this case is what is claimed to be the Appellant’s fundamental right to the ownership of property. No issue has arisen concerning the breach of fundamental principles such as non-discrimination.
243. Whether the Applicant’s property rights as guaranteed by the Constitution have been breached falls to be considered in the light of the impact of the 2000 regulations on their position as persons who have been allocated a quota under the system and the disadvantage which they claim to suffer as a result of that impact.
The position of the Applicants :-
244. It is not contested, and it indeed it is part of their case, that each of the Applicants participated for a significant number of years in the milk quota regime and profited therefrom. It is also the case that each have profited, in varying degrees, from a leasing of their quota in respect of milk quantities of which they were not the actual producers.
245. As regards Mr Maher, the options now available to him in the light of the 2000 Regulations are as follows: –
(a) He can resume milk production and benefit fully from the milk quota regime;
(b) He can transfer the quota with land to a relative as defined in the 2000 Regulations. The quota which he leased to Mr Maurice Ryan since 1996 to March 31, 2000 can be sold to Mr Ryan, with or without the leased land;
(c) He can sell the quota under the 2000 milk quota restructuring scheme;
246. This would involve selling at the maximum price fixed by the Minister which is less than he would obtain on the market without a capped prices restraint.
(d) If he sells the quota under the restructuring scheme, his son or daughter will have priority to buy up an equivalent level of quota from future restructuring schemes provided that sufficient quota is available.
247. Mr Maher submits that the only real option to him are either to resume milk production or to sell his milk quota under the 2000 milk quota restructuring scheme. It was submitted that at present he is not in a position to resume milk production as this would be very expensive. Selling the quota to Mr Ryan is not a realistic option as he and Mr Ryan have not been able to agree on terms. In practice, it is claimed, he cannot keep the quota for any of his children and that the option of his children to buy an equivalent level of quota from a future restructuring scheme is subject not only to the availability of quota at that time but also subject to the operation of a restructuring scheme being in place. His only option therefore is to sell the quota under the 2000 milk quota restructuring scheme at a price less than the ‘market value’.
248. Mr Brett and his wife are an elderly couple depending on income from their quota. The options open to Mr Brett are:-
(a) Resume milk production
(b) Sell the quota under the 2000 milk quota restructuring scheme.
249. Because of their age it is not a realistic option for them to resume milk production and the only realistic option open to them is to sell under the restructuring scheme at a price less than the market value of the milk quota.
250. Ms Ryan it is contended is in much the same position. She could not afford at this stage, it is stated, to return to milk production and selling into the restructuring scheme is her only option leading again to a loss by comparison to what she could obtain if she was allowed to sell on the open market.
251. The common elements in the position of the three applicants is that none of them are active producers, all have the option of resuming production of milk on their respective farms and benefiting in full from the milk quota regime, but because of their personal circumstances the resumption of working their farm to produce milk is not a realistic option for them personally. In each case it is claimed that they are realistically only left with one option to sell into the restructuring scheme. This would involve selling at the capped price fixed by the Minister of £1.36 per gallon. In support of the first Applicant’s claim, evidence was tendered on his behalf by way of the affidavit of Mr Noel Corcoran, an auctioneer, to the effect that his milk quota had a value of £3.00 per gallon “on a sale on the open market”. It is not in dispute that, at least at the time of the High Court proceedings, the capped price fixed by the Minister was significantly less than what would be obtainable on the “open market.”
252. In their written and oral submissions the Applicants contended that it would be unrealistic not to regard a milk quota as valuable an asset in its own right as land itself, and that the resulting effect of the price fixed by the Minister was analogous to “to the forfeiture of unused agricultural land at a price significantly below market values or which seriously inhibited the right to lease such an asset. Such a consequence was manifestly in conflict with Articles 40.3.2 and 43 of the Constitution.”
253. First of all it should be said that the 2000 Regulations apply to all persons who were holders of a milk quota so to speak at the time of their entry into force and it is not in issue that they apply to all that class of persons in accordance with objective criteria.
254. Pursuant to those regulations, each of the Applicants is entitled, in common with all other holders of quotas, to retain the quotas attributed to them on resuming production of milk. It is for reasons wholly personal to them that they will not do so.
255. Their quotas are not being forfeited. That the Minister was entitled to make detailed rules concerning restrictions on transfer of quota with land with a view to implementing the community regulations is not in dispute (save obviously as to whether it ought to have been done by way of primary legislation or secondary legislation). In making such rules and in exercising the discretion provided for in Article 8a(b) of Regulation 3950/92 (as inserted by Article 1.10 of Regulation 1256/1999, the Minister was constrained by the objective of “ ensuring that reference quantities are solely attributed to active milk producers ”. As Fennelly, J. points out in his judgment, member state discretionary action is circumscribed by the objectives of the scheme authorising it and that “ in the instant circumstances, Member States are authorised to act only to achieve the aim of ensuring that reference quantities are attributed to producers ”.
256. In my view the adjustments implemented by the 2000 Regulations are internally rational to the objectives to be achieved by the regulatory regime. There is no forfeiture. There is no interference with a substantive right, such as property right.
257. The foregoing measures are no more than regulatory adjustments which are an inherent part of a particular organisation of any market. Clearly no economic operator who participates in such a market can legitimately expect it to remain in a static or frozen form and must accept the consequences of such inherent internal adjustment as governing his or her participation in that market.
258. It seems to me that on any view the interest of the Applicants in their quotas, however it is characterised, have not been substantively diminished subject only to the remaining question which has arisen with regard to sale under the 2000 restructuring scheme. In reality it is that question which has been the focal point of the Applicant’s complaint regarding infringement of their property rights. In doing so they have contrasted the price available in the restructuring scheme by virtue of the capped price fixed by the Minister and that which would be available on what, the first Applicant’s auctioneer referred to as, “ the open market ”. It may be said that “open market” is hardly an apt term since the market in milk and hence its price is a creature of the particular market conditions created by the regulatory regime itself. In reality it is the price which the sale of a quota, based on the maximum fixed price per gallon, (or litres), would obtain on that particular market as a construct of the regulatory regime, which is contested.
259. Article 26 (5) of the 2000 regulations is the provision which authorises the Minister to fix the capped or maximum payment for a quota surrendered in the 2000 Restructuring Scheme. It is also the provision which authorises the Minister to set the reallocation price. It is not this provision which is in issue with regard to the infringement of the Applicant’s property rights but rather the price fixed by the Minister pursuant to that provision and which he announced by way of departmental notice no. 94/1, namely that the maximum price for quota to be offered under the restructuring scheme is fixed at 30p per litre or approximately £1.36 per gallon. The uncontested evidence before the High Court, as set out in paragraph 39 of the affidavit of Mr Evans is that the maximum price was fixed having regard to the objectives contained in Article 8, (the allocation of quotas to active milk producers). In this regard Mr Evans added “ I say and believe that this was a fair price taking into account the interest of milk producers requiring additional quota and those person disposing of their quota. Most of quota surrendered and reallocated in accordance with the scheme will be reallocated to small and medium size producers. In most cases, producers finance the purchase of additional quota by raising loans from lending institutions. Many of the producers will have required quota in previous years, similarly financed. On the other hand, persons selling their quota under the restructuring scheme are likely to have benefited significantly from leasing their quota over a number of years with land or under temporary leasing schemes”
260. It is clear that the price fixed by the Minister is internally and rationally related to the functioning and the continuing existence of the common organisation of the milk market with a view to achieving it’s objectives. Non-active milk producers, such as the Applicants who have a quota and who for reasons personal to them do not wish to or cannot resume actual production of milk are allowed an opportunity to sell at a maximum price which takes account on the one hand of the needs of such persons and on the others of persons who wish to enter the system, acquire a quota or an additional quota and actively produce milk. The so called ‘market value’ relied upon by the Applicants is also an artificial product of the organised market in milk. The potential opportunity to sell at the “market price” generated by the functioning of the quota system to the exclusion of the regime now established by the 2000 regulations (including the price fixed by the Minister under those regulations) is not a property right. Property rights generates notions of proprietorship and dominion. In the context of this scheme I do not consider that the Applicant’s had a proprietary interest in the selling at the particular “market price” which they seek to rely on. For the reasons stated I consider that the Minister, in fixing the price which he did, has acted within the ambit of the common organisation of the milk market and a quota regime and if there can be said to be a market price it is that governed by the maximum price fixed by the Minister. To hold otherwise it would be to deny the Minister his right and duty to exercise his lawful regulatory powers to ensure the proper functioning of the system. It would also wrongfully attribute to the Applicant’s some proprietorial right to determine how the regulatory system in which they have participated should be operated.
261. For these reasons I am of the view that the property rights of the Applicants have not been infringed under national law.
Hempenstall v. Minister for the Environment
[1994] 2 I.R. 20
The issues
(a) The Constitution
The applicants firstly submit that the taxi licences which have been granted to them are a form of property right and that this property right is constitutionally protected; secondly, that it is a valuable right; thirdly, that this right has been unjustly attacked by the Minister’s actions which have resulted in a very considerable diminution in the value of their right. The Minister does not deny that the applicants’ licences are property rights and valuable rights, which are constitutionally protected; he says that they have not been unjustly attacked by the impugned Regulation.
The applicants’ case, in greater detail, is this. They say that the effect of the impugned Regulation is that there will now be unrestricted licensing of hackney-cabs in their taximeter area. They claim that this will have “an immediate and devastating effect” on their taxi-cab licences, that the effect will be “to effectively decimate the value of being a taxi-cab” licencee “because for all intents and purposes the manner in which hackney cabs have been allowed to operate by the authorities has put them on a par with taxicabs save that they do not stand at taxi ranks.” They say that the value current in July, 1992, of a taxi licence was approximately £44,000 and that on implementation of the Regulation the effect of unrestricted competition from hackney cabs would be to reduce this value to £3,000. Their claim is that the competition from hackney-cabs would dilute the trade which supports taxi-cabs to such an extent as to make the operation of taxi-cabs uneconomical. It is claimed that the Minister must have been aware that no proper controls were imposed on hackney-cabs to ensure that they operate in accordance with law, and in particular in accordance with the Regulations of 1983 relating to radio communication, and that he is introducing licensing arrangements which will enable persons to be licensed whom he knows will break the existing laws. They claim that the Regulations, therefore, constitutes an unjust attack by law on their property rights guaranteed by Article 40, s. 3 and Article 43 of the Constitution. In support of their contention they say the applicant Thomas Hempenstall purchased his “taxi-plate” for £38,000, the applicant Patrick Hempenstall paid £38,000 for a licence plate, the applicant Nicholas Lewis paid a similar sum, the applicant David Weafer paid £36,000, the applicant Brian Herron £39,000, the applicant Kieran Goulding £37,000, and that each of the applicants had to borrow substantially in order to effect these purchases. They say each will suffer considerable financial loss because of the Regulations of 1992.
In reply to these contentions the Minister makes a number of points. Firstly, it is pointed out that Thomas Hempenstall was granted a licence on the 17th November, 1989; Patrick Hempenstall was granted a licence on the 17th April, 1990; and Kieran Goulding was granted a licence on the 21st November, 1989, and at the time that these applicants obtained these licences there was no restriction on the availability of new hackney licences. Nicholas Lewis obtained his licence on the 24th January, 1992; David Weafer obtained a licence on the 30th October, 1991, and Brian Herron obtained a licence on the 29th October, 1991, that is, during the period of the moratorium, between the 24th October, 1991, and the 13th July, 1992. Attention is drawn to the fact that in May, 1991 (that is before they purchased their licence) the Minister had announced a review of the whole system of the licensing of small public service vehicles and at the same time expressed concern at reports of licences being traded for sums between £40,000 and £50,000, and that the moratorium on the grant of new hackney licences introduced in October, 1991, was stated to be a temporary one. It is urged that all the applicants, should have reasonably expected that changes in the licensing arrangements would result from the inter-departmental review which was being undertaken and of which they were aware.
Secondly, it is pointed out that since July, 1992, when the impugned Regulations came into force, the Department of the Environment has monitored the prices pertaining for the sale of taxi plates as indicated in the daily press and that from an examination of the prices of plates offered for sale no reduction in the price has resulted from the making of the Regulations in July, 1992. The Minister therefore submits that the return to the regime which pertained prior to the introduction in October, 1991, of the temporary moratorium has not had any deleterious effect on the value of the applicants’ licences. He points to the fact that, at a time when it is claimed the Regulations of 1983 relating to the prohibition on radio communication by hackney-cabs was in operation the value of licences was extremely high (as shown by the purchase price paid by the applicants) and that no diminution in these prices has resulted from the revocation of the moratorium.
Thirdly, certain legal submissions were made, which I will examine in a moment, to the effect that the making of the Regulations of 1992 cannot be regarded as an “attack” on the applicants’ property rights.
I have reached the following conclusions on the issues which are:
Firstly, on the question of fact, the applicants have not been able to satisfy me that on the balance of probabilities the Regulations of 1992 have or will have the effect for which they contend. I will accept for the purposes of this judgment that the prohibition of 1983 on the use of radios by hackney owners was difficult to enforce and that these Regulations were breached to a significant extent in the years prior to October, 1991, (when the Regulations of 1991 restricting the issue of new hackney licences were first introduced).
There were thus three features of the pre-October, 1991, regime in taxi-meter areas which are presently relevant; (a) there were no restrictions on the number of hackney licences which could be issued; (b) there was a significant non-compliance with the Regulations of 1983 by hackney owners, and (c) taxis in these areas were subject to a number of legal restraints from which hackneys were exempt. But it is significant to note that in these conditions from 1978 (when transfer of taxi plates was first permitted and the number of new taxi licences restricted) until October, 1991, taxi-plates acquired a substantial value and a vigorous trade in them developed. No reason has been advanced to explain why the termination of the temporary moratorium on the issue of new hackney licences and the return to the pre-October, 1991, regime should produce results different from those which existed for many years prior to the moratorium. No evidence has been adduced to contradict the Minister’s evidence that the termination of the moratorium has not in fact affected the market price of taxi-plates. Apparently, a flourishing market in the sale of taxi-plates presently exists just as it did prior to October, 1991. I must hold therefore that the applicants have failed to establish that the Minister’s actions have resulted in a diminution in the value of their taxi licences and accordingly have failed to establish that an attack on their property rights has taken place.
Secondly, even if it were established that the making of the Regulations of 1992 resulted in a diminution in the value of the applicants’ taxi-plates this would not as a matter of law amount, in my opinion, to an attack on the applicants’ property rights. Property rights arising in licences created by law (enacted or delegated) are subject to the conditions created by law and to an implied condition that the law may change those conditions. Changes brought about by law may enhance the value of those property rights (as the Regulations of 1978 enhanced the value of taxi-plates by limiting the numbers to be issued and permitting their transfer) or they may diminish them (as the applicants say was the effect of the Regulations of 1992). But an amendment of the law which by changing the conditions under which a licence is held, reduces the commercial value of the licence cannot be regarded as an attack on the properly right in the licence – it is the consequence of the implied condition which is an inherent part of the property right in the licence.
Thirdly, a change in the law which has the effect of reducing property values cannot in itself amount to an infringement of constitutionally protected property rights. There are many instances in which legal changes may adversely affect property values (for example, new zoning regulations in the planning code and new legislation relating to the issue of intoxicating liquor licences) and such changes cannot be impugned as being constitutionally invalid unless some invalidity can be shown to exist apart from the resulting property value diminution. In this case no such invalidity can be shown. The object of the exercise of the Ministerial regulatory power is to benefit users of small public service vehicles. It has not been shown or even suggested that the Minister acted otherwise than in accordance with his statutory powers. Once he did so then it cannot be said that he has thereby “attacked” the applicants’ property rights because a diminution in the value may have resulted.
I must hold therefore that by making the Regulations of 1992, the Minister did not unconstitutionally affect the applicants’ property rights.
(b) Estoppel
The applicants’ second ground of attack is based on the law of estoppel as developed in the doctrine of legitimate expectation. Arising from what it is claimed the Minister said in the course of an interview with the President of the Taxi Owners Association on the 16th October, 1991, it is urged that the applicants entertained a legitimate expectation that the moratorium be had imposed on the issue of new hackney licences would not be lifted until all policy decisions to be taken in the light of the inter-departmental review had been taken, and that contrary to the expectation thus encouraged the Minister revoked the moratorium before making those decisions. The Minister is precluded from doing so, it is said, by the operation of the doctrine of legitimate expectation as developed in recent decisions in the courts in this country and in England.
This claim raises a question of fact and one of law. I will deal firstly with the issue of fact.
The Minister met Mr. John Usher, the President of the Irish Taxi Drivers Federation, at a meeting which Mr. Usher says took place on the 16th October, 1991. According to Mr. Usher’s affidavit the Minister confirmed that he was stopping the issue of hackney licences “pending resolution of the various issues which had been raised concerning the overall operation of the taxi and hackney business in Ireland”, and that”nothing would be done until all of the problems concerning taxis and hackneys had reached a satisfactory resolution.” Mr. Usher states that it was his understanding that there would be no question of a piecemeal implementation of whatever policy decisions the Minister came to. In an affidavit in reply to this part of the case Mr. Kevin Ring, the acting principal officer in the Driver and Traffic Control Section of the Department states that the Minister had a meeting with Mr. Usher on the 24th October, 1991, and not on the 16th October, 1991, and that he was in attendance at the meeting. Mr. Ring states that the meeting was held to advise the Federation that the Minister had earlier that day made Regulations to implement the interim recommendations of the Advisory Committee and that at the meeting the Minister outlined and explained what was in the Regulations and in the press statement which he had approved prior to the meeting. The Minister, Mr. Ring states, conveyed to Mr. Usher the terms of the press statement and his evidence is that the Minister gave no commitment in relation to the application of the moratorium other than that it would be maintained pending completion of the review. Further, Mr. Usher was informed that it was intended that the moratorium was to be temporary. This was clearly stated in the press statement which the Minister issued. Having referred to the fact that the Minister had accepted the interim recommendations of the inter-departmental committee and having announced a number of decisions taken on foot of these recommendations it went on to state:
“pending the completion of the current review, the Minister has decided that (with the exception of the new taxi licences being issued in Dublin) no small public service vehicle licences will be issued from today unless an application had already been received and is in order.”
It is accepted on the applicants’ behalf that Mr. Usher is incorrect in his recollection that the meeting with the Minister took place on the 16th October and it is agreed that it was held on the 24th October, that is the day on which the Regulations imposing the temporary moratorium were issued. The evidence of Mr. Ring to the effect that the Minister had the press statement with him and that he conveyed its terms to Mr. Usher is likewise not controverted. A difference of recollection however, exists, as to what the Minister said to Mr. Usher, a difference which could only be resolved by hearing oral evidence. I do not, however, think that it is necessary for me to adjourn the application for this purpose because even if I accept that the Minister used the words which Mr. Usher says he used I do not consider that they could possibly bear the meaning which he now seeks to put on them. The meeting took place in the context of the making of the new Regulations and the issue of a press statement explaining them. Even if the Minister had assured Mr. Usher that he was stopping the issue of hackney licences pending the resolution of the various issues concerning the operation of the taxi and hackney business in Ireland, Mr. Usher must also have been aware that the moratorium was only a temporary one, that it had been imposed following an interim recommendation of the inter-departmental committee and only pending the completion of the inter-departmental review. The words used by the Minister could not reasonably have been understood as meaning that once the review was completed the moratorium would remain until all the decisions on all problems referred to the committee and dealt with in their final report had been taken. This could take some considerable time to achieve and there was no reason why during that time the moratorium should remain in place. I do not think therefore that the Minister said anything at the meeting which now precluded him or now precludes his successor from lifting the moratorium.
But even if the words used by the Minister could reasonably be construed as the applicants say they should be they do not, in my view, have the legal consequences claimed.
The law relating to the doctrine of legitimate expectation is an evolving one, whose parameters have not yet been defined and whose exact scope has not yet been established. That it will be applied in our courts has been made clear in the judgment of the Chief Justice in Webb v. Ireland [1988] I.R. 353, who in the course of his judgment (at p. 384) pointed out that the doctrine is an aspect of the well-recognised equitable concept of promissory estoppel whereby a promise or representation as to intention may in certain circumstances be held binding on the representor or promisor. Applying this concept the Court held that an unqualified assurance given by the director of the National Museum that the plaintiff would be honourably treated in relation to the deposit by him with discretion of valuable celtic artefacts which he had found was binding on the State. The doctrine has been applied by the Privy Council in England in A.G. of Hong Kong v. Ng Yuen Shiu [1983] 2 A.C. 629, in which it was held that an announcement of an intention as to the procedures to be adopted in the case of asylum-seekers in Hong Kong imposed a legal obligation to follow such procedures, and recently in this country, in another asylum-seekers case, Fakih v. The Minister for Justice [1993] 2 I.R. 406, in which the court held in favour of asylum-seekers who claimed that the Minister was bound to apply procedures to their applications in accordance with undertakings given by him to the United Nations.
It is urged by Mr. Geoghegan on behalf of the Minister that the doctrine on which the applicants rely is part of the well established principles of promissory estoppel and that according to these principles no estoppel can arise to prevent the discharge by a Minister of a statutory discretion (Spencer Bower & Turner, “Estoppel by Representation”(3rd ed.) at p. 141 and see Dublin Corporation v. McGrath [1978] I.L.R.M. 208 and Western Fish Products Ltd. v. Penwith District Council [1981] 2 All E.R. 204) and that as the making of Regulations under the Road Traffic Acts constitutes the discharge of a discretionary function the applicants cannot successfully plead that anything said at the meeting of the 24th October, 1991, can justify the court declaring invalid the Regulations of July, 1992. Mr. Clarke on behalf of the applicants accepts this general principle but argues that in this case the Minister has made a representation as to the procedures he will adopt when exercising his statutory functions and that this representation in respect of procedures should have the same effect as those in the asylum cases to which I have referred. I do not think that this submission is correct. The assurance or representation which it is alleged the Minister gave was to the effect that he would defer making Regulations for an indeterminate period and did not relate to the procedures he would adopt when making them, and it seems to me that in this case I must apply the principle to which I have been referred and hold that the Minister cannot be estopped from making the Regulations. This case affords an excellent justification of the principle I am applying. The inter-departmental committee’s report is a very detailed and comprehensive one containing a wide range of recommendations. Obviously, the report will require careful consideration and decisions on all the matters raised must of necessity take time. Amongst its recommendations the report recommended an immediate short-term pilot project of 50 taxi licences in respect of vehicles specially adapted to accommodate persons in wheelchairs. As well as terminating the October, 1991, moratorium the Minister, in the Regulations of July, 1992, gave effect to this recommendation. If the applicants’ submissions are correct then this part of the Regulations, being a piecemeal implementation of the committee’s report, is also invalid. A rule of law which would produce this result cannot be correct. It seems to me that the law should not trammel the exercise by a Minister of his statutory functions even if, in the light of new information and advice, he exercises them in a manner contrary to an earlier statement of intent.
I must therefore refuse these applications.
Iarnrod Eireann v Ireland
SC 16th July 1996
…..
Miss Finlay submitted that, if neither of the plaintiffs was in a position to point to individual constitutional rights to which they were entitled and which were affected, or in danger of being affected, by the impugned legislation, the challenge in the present proceedings would necessarily fail. In the light of the decision of the Supreme Court in Cahill v. Sutton [1980] I.R. 269, the Court should not entertain a constitutional challenge based on a possible infringment of the constitutional rights of other parties where the plaintiffs were unable to point to any constitutional rights inhering in them which were affected, or in danger of being affected, by the impugned legislation.
On behalf of the plaintiffs Mr. McGrath and Mr. Kelly submitted that there was no rational ground for depriving corporate bodies of the benefit of such constitutional guarantees as were, of their nature, capable of benefiting such bodies. Clearly, such rights as the right to life and liberty expressly guaranteed by Article 40, s. 3 and some unenumerated rights which had been identified by the courts, such as the right to many, were of no relevance to artificial legal entities. But the same could not be said of the rights under consideration in this case, i.e. the right to private property and to fair procedures.
They submitted that the entitlement of artificial bodies to rely on the private property rights enshrined in Article 40, s. 3. and Article 43 had been recognised by implication by the former Supreme Court in The Attorney General v. Southern Industrial Trust (1957) 94 I.L.T.R. 161. Moreover, in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339, the Supreme Court expressly declined to offer any opinion as to the correctness of the view taken by Carroll J. at first instance as to the locus standi of bodies corporate. Counsel for the plaintiffs further submitted that her decision in that case, to the extent that it was based on the wording of Article 43, had to be seen in the light of the later decision of the Supreme Court in Blake v. The Attorney General [1982] I.R. 117, in which it was held that Article 43 did not deal with a citizen’s right to particular items of property: that Article prohibited the abolition of private property as an institution, but the exercise by the citizen of his properly rights in respect of particular items of property was protected, not by Article 43, but by Article 40, section 3.
They submitted that the clear intention of Article 40, s. 3, sub-s. 2 was to ensure that the Oireachtas, in its laws, protected the property rights of every citizen and that requirement was not modified, as it was in the case of Article 40, s. 1, by limiting its range of applicability to citizens “as human persons”. They submitted that where any citizens, organised as a body corporate, in good faith invoked the jurisdiction of the Court to investigate the constitutionality of laws passed by the Oireachtas in circumstances where they could demonstrate that their interests were capable of being seriously damaged by the legislation, it would not be in the public interest that the Court would be obliged to decline jurisdiction on the narrow ground that the articles extended protection only to citizens as individuals. They cited observations of the Supreme Court in S.P.U.C. v. Grogan (No. 1) [1989] I.R. 753 in support of this submission and also referred to a number of decisions of the High Court and the Supreme Court which, they said, by implication at least, recognised the right of corporate bodies to invoke the protection of Article 40, s. 3 and Article 43, e.g. Attorney General for England and Wales v. Brandon Book Publishers Ltd. [1986] I.R. 597 and Ambiorix Ltd. v. Minister for the Environment (No. 1) [1992] 1 I.R. 277.
They further submitted that, in the particular context of the Act of 1961, it was anomalous that, while the first plaintiff was deemed by virtue of s. 11 (c) of the Interpretation Act, 1937, to be a “person” and hence a”concurrent wrongdoer” capable of incurring liability under the Act of 1961, it was at the same time precluded, if the arguments on behalf of the State were well founded, from relying on the same constitutional protection as “persons” in the conventional sense.
They contested the submission advanced on behalf of the State that, whatever might be the position of the companies formed under the relevant companies legislation in the normal way, a body such as the first plaintiff which was purely the creature of statute and regulated in all its operations by statute could not avail of any constitutional rights. They said that there was no warrant, either in the Constitution itself or the decisions of the Superior Courts, for the proposition that, in the context of the application of constitutional rights, there were two tiers of corporate bodies. If corporate bodies indeed enjoyed the protection of the Constitution, then that protection, they said, extended to all corporate bodies.
Even if these arguments were rejected, they submitted, the joinder of the second plaintiff in his capacity as a shareholder in the first plaintiff clearly disposed of the State’s objections to the locus standi of the first plaintiff and they relied in this context on the decision of the Supreme Court in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339. They contested the suggestion advanced on behalf of the State that the joinder of the second plaintiff, given the nominal nature of the shareholding, should be treated by the Court as a purely technical and colourable device designed to overcome the constitutional difficulty: they said that the objection based on the alleged lack of locus standi, in a case such as the present, where the interests of the first plaintiff were plainly affected by the impugned legislation, was itself of a purely technical nature and it was perfectly reasonable for the first plaintiff to adopt a similar approach.
They finally submitted that, even if it were the case that the plaintiffs could not themselves rely on the rights guaranteed expressly or by implication under the relevant articles of the Constitution, it would be wrong to prevent the first plaintiff from challenging the constitutionality of the Act of 1961 when its financial interests were so unarguably affected by the operation of the impugned sections and they could not in any sense be described as “meddlesome” or “officious” litigants whose right to invoke the hypothetical damage caused to others by allegedly unconstitutional legislation had been rejected by the Supreme Court in Cahill v. Sutton.
(2) The constitutional validity of ss. 12 and 14 of the Act of 1961
On behalf of the plaintiffs Mr. Kelly said that the consequence of ss. 12 and 14 was that the first plaintiff, in a case such as the present, was obliged to compensate an injured person for all the damage he had sustained in circumstances where the court itself had determined that its responsibility for that damage was only in the order of 30%. The loss which it, as defendant, suffered was due, not to the fact that it was deemed by the law to be responsible for all of the injured parties’ damage, but simply to the fact that the person responsible for 70% of that damage was impecunious. The first plaintiff was thus required by the Act of 1961 to compensate the injured party for his misfortune in finding that one of the two concurrent wrongdoers he had sued was impecunious, although, if that wrongdoer had been solvent, the first plaintiffs share of the liability would have been confined to the proportion found by the court to be “just and equitable”, i.e. 30%.
Mr. Kelly submitted that in determining whether this result was constitutionally acceptable or, on the contrary, was an unjust attack on the property rights of the first plaintiff, the appropriate approach was to apply the principle of proportionality. The essential test, he argued, was whether the impugned sections gave rise to an obligation which was excessive in the circumstances.
Mr. Kelly relied in this context on the observations of the Supreme Court in Cox v. Ireland [1992] 2 I.R. 503 and in In re The Matrimonial Home Bill, 1993 [1994] 1 I.R. 305 and of Costello J. (as he then was) in Heaney v. Ireland [1994] 3 I.R. 593. He said that these authorities demonstrated that the task of the Court in a case such as the present was to determine whether the impugned sections represented a disproportionate interference by the State with the constitutional rights invoked on behalf of the citizen.
Mr. Kelly submitted that the unarguably established invasion of the property rights of the first plaintiff significantly offended the principle of proportionality. It could riot be justified by recourse to Article 43, under which the exercise of the right of private property could legitimately be regulated by the State according to principles of social justice and the exigencies of the common good. Those considerations did not require defendants to compensate injured plaintiffs to any greater extent than the degree to which they were responsible for the injuries.
Mr. Kelly submitted that, in the result, the operation of ss. 12 and 14 in a case such as the present represented an “unjust attack” on the property rights of the first plaintiff. Pointing out that, unlike the other guarantees contained in Article 40, s. 3, sub-ss. 1 and 2, the obligation of the State “in the case of injustice done to vindicate the . . . property rights of every citizen” was an absolute obligation, he said that if the first plaintiff, in a case such as this, was obliged to pay all the damages arising from the accident irrespective of the extent to which it was responsible for that damage, the State would have demonstrably failed to vindicate its property rights as required by that Article.
Mr. Kelly further submitted that the operation of the sections deprived the first plaintiff of the fair procedures in the determination of its legal rights to which it was entitled by virtue of such decisions as In Re Haughey [1971] I.R. 217. While he accepted that the sections were not purely procedural in their nature, he submitted that this did not deprive his clients of their right to have their liability determined in a manner which would reasonably be described as just. He cited in support of this proposition the observation of Barron J. in Sweeney v. Duggan [1991] 2 I.R. 274 that Article 40, s. 3, sub-s. 2 affords the citizen the guarantee of “a just law of negligence”. Mr. Kelly submitted that the constitutional frailty of
ss. 12 and 14 in this context was the consequence of the Oireachtas having approached the question of joint and separate liability solely from the perspective of the plaintiff. The principle reflected in the impugned provisions was intended to ensure that, irrespective of the respective degrees of fault of concurrent wrongdoers, the plaintiffs judgment should be satisfied. That approach wholly disregarded the interests of those who were sued as concurrent wrongdoers.
Mr. Kelly drew attention to the approach of the common law in reconciling the rights of injured plaintiffs and the defendants whom they sought to make amenable. He pointed out that in Overseas Tankship (U.K.) Ltd. v. Mort Dock Engineering Co. Ltd. (The Wagon Mound) [1961] A.C. 388, Viscount Simonds, giving the advice of the Privy Council, enquired rhetorically (at p. 423):
“. . . if some limitation must be imposed on the consequences for which the negligent actor is to be held responsible – and all are agreed that some limitation there must be – why should that test (reasonable forseeability) be rejected which, since he is judged by what the reasonable man ought to forsee, corresponds with the common conscience of mankind, and a test (the ‘direct’ consequence) be substituted which leads to nowhere but the never-ending and insoluble problems of causation?”
Mr. Kelly submitted that such an approach was even more desirable when one was considering a principle of law which rendered an actor responsible for the entire of the damage arising out of a particular accident, in respect of which his responsibility had been judicially determined as being only partial.
On behalf of the State, the Attorney General submitted that the arguments advanced on behalf of the plaintiffs, if well founded, would have the result that an innocent plaintiff, such as the fifth defendant, who had been injured by the wrong of another party, such as the first plaintiff, would be deprived of a significant part of the damage which he had suffered as a result of their wrongful act because of the lack of means of another wrongdoer. If that were so, it would mean that the State, while vindicating the property rights of the first plaintiff, an admitted wrongdoer, would have done so at the expense of the constitutional right of the plaintiff to be adequately compensated for the injury caused to him by that wrongdoer. He submitted that no argument had been advanced on behalf of the plaintiffs to justify the tilting of the constitutional balance in this manner in favour of the wrongdoer and against the innocent plaintiff.
The Attorney General further submitted that the arguments advanced on behalf of the plaintiffs completely disregarded the distinction betweenfault and causation which, he said, was an essential feature of the scheme of contribution between concurrent wrongdoers established by the Act of 1961. He said that there was not, and could not be, any necessary relationship between the apportionment of fault among concurrent wrongdoers and the extent to which each of the concurrent wrongdoers could be said to have caused the plaintiffs injuries in a case such as the present. It was clear, and had been so held by the courts, that the court, in apportioning liability among concurrent wrongdoers in a “just and equitable” manner, was concerned with determining the degree to which each of the concurrent wrongdoers could be regarded as blameworthy. In a typical case where a passenger in a motorcar suffered a whiplash injury as a result of a collision between two negligent drivers, no statutory machinery could rationally assess how much of the injury was due to the acts or omissions of one driver rather than the other. That was even more obviously the case where the action was brought in respect of the death of the injured party. He submitted that, in many cases, the acts or omissions of a concurrent wrongdoer to whom a significantly greater degree of fault was attributed under the apportionment machinery might have been significantly less causative of the plaintiffs’ injuries.
The Attorney General further submitted that the statutory scheme under attack enjoyed a presumption of constitutionality. He pointed out that the right to contribution provided for in s. 21 had mitigated the rigour of the common law rule under which joint tortfeasors and several tortfeasors were severally liable for the entire amount of the damage: ss 12 and 14 were essentially declaratory of that common law principle.
The Attorney General pointed out that ss. 12 and 14 of the Act of 1961 reproduced almost verbatim ss. 2 and 4 of the draft of a model statute suggested by Professor Glanville Williams in his work, “Joint Torts and Contributory Negligence – a Study of Concurrent Fault” (1951 Chapter 22, pages 500-501). He adopted the statement by the learned author in that work (at p. 17) that the characteristic of concurrent torts “is the logical impossibility of apportioning the damage among the different tortfeasors”.
The Attorney General also said that the Supreme Court had made it clear in a number of decisions that the wording of Article 40, s. 3 and, in particular, the use of the expressions “as far as practicable” or “as best it may” indicated that, in certain circumstances, the State might have to balance its protection of particular rights against other obligations arising
from its regard for the common good. He referred in particular to the observations of O’Higgins C.J. in Moynihan v. Greensmith [1977] I.R. 55 and Finlay C.J. in Pine Valley Developments v. Minister for the Environment [1987] I.R. 23. He said that, insofar as there might be a conflict between the rights of the concurrent wrongdoer and the rights of the injured person, it is constitutionally permissible, if not indeed imperative, to give priority to the rights of the injured person.
The Attorney General finally submitted that, if the submissions of Mr. Kelly were well founded, it would mean that injured plaintiffs in the most serious of cases might find themselves deprived of 90% of their damages because of a matter for which they have no responsibility, i.e. the insolvency of one of the concurrent wrongdoers. He said that the arguments they advanced had nothing to say to the manifest injustice which would be created by such a situation. The Act of 1961, which was in many respects a reforming measure, had put in place a carefully thought out statutory scheme which sought to achieve a proper balance between the rights of injured plaintiffs and of the persons who had caused them injury and one which achieved an appropriate constitutional balance.
Mr. Hanratty on behalf of the fifth defendant adopted the arguments of Miss Finlay on the question of locus standi and of the Attorney General on the substantive issue. He drew attention to the statement of the law in the tenth edition of “Salmond on Torts” (1945) which he said could reasonably be regarded as stating the law in Ireland prior to the enactment of the Tortfeasors Act, 1951, and the Act of 1961. The learned editor said (at p. 75):
“Joint wrongdoers are jointly and severally responsible for the whole damage. That is to say, the person injured may sue any one of them separately for the full amount of the loss; or he may sue all of them jointly in the same action, and even in this latter case the judgment so obtained against all of them may be executed in full against any one of them.”
He submitted that it was, accordingly, clear that ss. 12 and 14 of the Act of 1961 were merely declaratory of the common law rule as it had been applied for many years in Ireland.
Mr. Hanratty submitted that the plaintiffs were not entitled to the declaration sought by them at para. 2 of the statement of claim that the first plaintiff was only obliged to pay 30% of the damages awarded to the fifth defendant in the action heard by Johnson J. He submitted that the issue of the liability of the first plaintiff to pay the entire damages awarded in that action was res judicata, no constitutional challenge having been intimated until after a judgment had been given in the High Court. He relied in this context on the decision of the Supreme Court in Murphy and Murphy v. The Attorney General [1982] I.R. 241 and said that, in any event, the plaintiffs by their delay in instituting and maintaining the present proceedings had disentitled themselves to the relief sought against the fifth defendant.
Mr. Kelly in reply said that the concern expressed on behalf of the State by the Attorney General as to the effect of the finding on constitutionality on the rights of injured plaintiffs, such as the fifth defendant, would be more convincing if the State had evinced any disposition to provide compensation from their own resources to plaintiffs who might suffer the loss of part or all of their damages because of the insolvency of one or more of the persons whom they sought to make liable as defendants. He said that, while it was not the function of his clients to propose statutory schemes which might result in a fairer balance between the rights of plaintiffs and defendants, there were in fact a number of models which were open to the State, if they were genuinely concerned with the position of injured plaintiffs. First, they could simply provide for the payment of compensation from public funds to any plaintiffs who found themselves in the position of the fifth defendant. Secondly, they could establish a compensation fund similar to that which was set up following the financial difficulties encountered in recent times by the Private Motorists’ Protection Association and the Insurance Corporation of Ireland, to be funded by levies on the insurance companies. Thirdly, they could establish a scheme equivalent to that operated by agreement between the Minister for the Environment and the Motor Insurers’ Bureau under the relevant provisions of the Road Traffic Act, 1961. What they could not do, in his submission, was to alleviate the possible injustice caused to plaintiffs who found that one of the concurrent wrongdoers whom they had sued was impecunious by requiring the solvent concurrent wrongdoer to pay the entire of the damage, where he had been found only partially at fault.
The applicable law
(1) Locus standi
The plaintiffs rely primarily for the relief claimed in these proceedings on the provisions of Article 40, s. 3 of the Constitution which is as follows:
“1 The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2 The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen.”
The ability of corporate bodies to rely on the guarantees contained in these provisions does not appear to have been questioned in decisions prior to 1969 in which the constitutionality of legislation was challenged by such bodies in reliance on those provisions: see The Attorney General v. Southern Industrial Trust (1957) 94 I.L.T.R. 161 and Educational Company of Ireland Ltd. v. Fitzpatrick (No. 2) [1961] I.R. 345. In that year, however, the question was adverted to by O’Keeffe P. in East Donegal Co-operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317. He observed that
“Artificial persons may possibly not be entitled to rely on the constitutional guarantees . . . (although they have been held to be so entitled in the United States) . . .”
The Supreme Court expressed no view on the question in that case.
In Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 the first plaintiff challenged the constitutionality of certain provisions of the Industrial and Provident Societies (Amendment) Act, 1978, which it claimed were invalid having regard to the provisions of Article 40 already cited guaranteeing the property rights of every citizen and the following provisions of Article 43:
“1. 1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
The second plaintiff in the action was a shareholder in the first plaintiff and an Irish citizen. The defendants contested the rights of the plaintiffs to rely on these provisions of the Constitution. Carroll J. dealt with this contention as follows (at p. 349):
“The first issue to be determined is whether the Society, as such, can claim that its constitutional rights under Article 40, s. 3 and under Article 43 of the Constitution have been infringed. The property rights which are guaranteed by Article 40, s. 3, are those stated in Article 43; see p. 176 of the report of The Attorney General v. Southern Industrial Trust Limited . In Article 43, s. 1, sub-s. 1, the State acknowledges that man, in virtue of his rational being has the natural right, antecedent to positive law, to the private ownership of external goods. The remainder of Article 43 flows from that statement. In Article 43, s. 1, sub-s. 2, the word ‘accordingly’ shows a reference back to s. 1, sub-s. 1 of that Article. Article 43, s. 2, sub-s. 1 specifically refers to the rights mentioned in the foregoing provisions of the Article and s. 2, sub-s. 2, of the Article refers to ‘the said rights’. In my opinion, the provisions of Article 43, s. 1, sub-s. 1, cannot be construed as acknowledging or conferring a constitutional right on a corporate body – itself a creature of positive law. The right protected by Article 43 is the right of a human person.
Therefore, insofar as a claim is made by the Society that its constitutional rights under Article 40, s. 3 and Article 43 have been infringed by the Act, the claim is unsustainable as the Society does not have such rights. This view is in accord with the view expressed, in respect of s. 1 of Article 40, by the Supreme Court at p. 14 of the report of Quinn’s Supermarket v. Attorney General .
However, Mr. Moore is a shareholder in the Society. He invested his money with other shareholders in a Society incorporated under the law which is entitled to carry on business intra vires. If the business of the Society is affected by the Act of 1978 in such a way that the property rights of Mr. Moore as a shareholder are affected, then he is entitled, prima facie, to make a claim that his constitutional rights that are protected by Article 40, s. 3 and Article 43 have been infringed. Ownership of shares is one of the bundle of rights which constitute ownership of private property: per Mr. Justice Kenny at p. 84 of the report of Central Dublin Development Association v. The Attorney General .”
In Quinn’s Supermarket v. Attorney General [1972] I.R. 1 to which Carroll J. referred in this passage, neither Article 40, s. 3 nor Article 43
was under consideration. The plaintiffs, however, did rely on Article 40, s. 1 which provides that:
“All citizens shall, as human persons, be held equal before the law. This shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function.” (Emphasis added).
Speaking for the Supreme Court in that case, Walsh J. said of this provision (at p. 14):
“Furthermore, it need scarcely be pointed out that under no possible construction of the Constitutional guarantee could a body corporate or any entity but a human being be considered to be a human person for the purposes of this provision. In my view this provision has no bearing whatsoever upon the point to be considered in the present case, as no question of human equality or inequality arises.”
It will be observed that the word “citizen” in the provisions under consideration in this case is not qualified by the addition of the words “as human persons” or similar words.
The plaintiffs, having failed on the substantive issue in Private Motorists’ Provident Association v. Attorney General [1983] I.R. 339 in the High Court, appealed to the Supreme Court. Their appeal was disallowed, but no opinion was expressed as to the locus standi of the first plaintiff. Having pointed out that the plaintiffs’ challenge in that case was based, not only on Article 40, s. 3, but also on Article 40, s. 6, sub-s. 1 (iii) guaranteeing freedom of association, O’Higgins C.J., delivering the judgment of the Court, said at p. 358:
“The rights which are alleged to have been infringed are among the personal rights which the Constitution guarantees to citizens. The Society is a creature of statute law and it is argued that, as such, it does not enjoy that constitutional protection. However, Mr. Moore, as a citizen, is entitled to complain if the impugned legislation interferes with any of his personal rights. This he does in the claim that both his property rights and his freedom of association have been violated. In the circumstances, it is unnecessary to decide the question of the Society’s rights. Therefore, the Court does not express any opinion on this question.”
Having referred to the submission on behalf of the Attorney General in that case that the second plaintiff had no property rights as a shareholder in the assets or business of the first plaintiff but merely contractual rights in and against that body, O’Higgins C.J. went on at p. 359:
“In the opinion of the Court it is sufficient that, as a shareholder and to the extent of his investment, Mr. Moore has an interest in the Society and contractual rights arising therefrom. This interest and these contractual rights are property rights which belong to Mr. Moore and they are capable of being harmed by injury done to the Society. The Court, therefore, rejects the submission made on behalf of the Attorney General that, as a shareholder in the Society, Mr. Moore has no property rights capable of being invoked for the purposes of Article 40, s. 3 of the Constitution. The Court’s acceptance of the argument put forward by Mr. Moore on this point is in accordance with the judgment of Kenny J. in Central Dublin Development Association v. The Attorney General and with the judgments of O’Keeffe P. and of this Court in East Donegal Cooperative v. The Attorney General . Therefore, the Court will consider the question of the validity of the impugned legislation having regard to its effect on Mr. Moore’s property rights as a shareholder in the Society.”
As already noted, the capacity of bodies corporate to invoke the provisions of the Constitution now under consideration does not seem to have been questioned in cases decided by the Supreme Court in which they were plaintiffs prior to Private Motorists’ Provident Association v. Attorney General [1983] I.R. 339 and the issue does not appear to have been specifically addressed by that Court in any decisions subsequent to that case. It arose directly for consideration, however, in this Court in Chestvale Properties Ltd. v. Glackin [1993] 3 I.R. 35.
In that case, the applicant companies contended that the power claimed by the first respondent, an inspector appointed to investigate the affairs of those companies under the relevant provision of the Companies Act, 1990, was invalid having regard to the provisions of Article 40, s. 3 as being an unjust attack on their property rights. It is relevant to note that the particular enquiry being conducted by the first respondent was as to the identity of the persons effectively in control of the applicant companies and that none of the shareholders in either of the companies was joined as a plaintiff. Murphy J. dealt as follows (at p. 45) with the contention advanced on behalf of the respondents that the applicant companies had no locus standi:
“As the rights guaranteed by [Article 40, s. 3] are the personal and property rights of citizens, the respondent and the Attorney General contended that an argument based on this subsection was not available to the corporate applicants. This objection is supported by the decision of Carroll J. in Private Motorists’ Provident Society v.Attorney General [1983] I.R. 339. Ordinarily when this problem arises it is overcome by joining as a plaintiff a shareholder of the corporate plaintiff who is an Irish citizen (as was done in the PMPS case). This solution was consciously rejected by counsel on behalf of the applicants in the present case.
Whilst I accept that the court should be astute to protect the rights of citizens, even when they are attacked only indirectly through particular corporate structures, it does seem to me that in the particular circumstances of this case, the absence of an individual Irish citizen asserting his own constitutional rights is fatal to the argument based on the constitutionality of the 1990 legislation. However, as the matter was argued before me it is proper that I should express a view on it.”
Murphy J. went on to reject the contention that, assuming the applicants were entitled to rely on the provisions of Article 40, s. 3, the purported exercise by the first respondent of the relevant powers would be invalid having regard to those provisions, holding that, to the extent that they interfered with the property rights of the applicants, they were justified under the terms of Article 43 as a means of reconciling the exercise of such rights with the exigencies of the common good.
It is an important feature of the decision of Carroll J. in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 that it was expressly based on the premise that the rights on which the plaintiff sought to rely derived from Article 43. The learned judge laid particular emphasis on the acknowledgment by the State in the opening words of that Article that “man, in virtue of his rational being” is entitled to rights of private property and that the remainder of the Article flows from that statement. She concluded, in the result, that the right protected by Article 43 is “the right of a human person”.
However, subsequent to the decision in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 the relationship of Articles 40, s. 3 and Article 43 was further elucidated in the judgment of the Supreme Court in Blake v. The Attorney General [1982] I.R. 117. In that case, certain provisions of the Rent Restrictions Act, 1960, were challenged as being invalid having regard to the provisions of Articles 40 and 43. Giving the judgment of the Court, O’Higgins C.J. said of Article 43 at p. 135:
“It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading ‘personal rights’ and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property.
This question of the relationship of Article 40, s. 3, sub-s. 2 to Article 43 was discussed in The Attorney General v. Southern Industrial Trust Limited (1957) 94 I.L.T.R. 161. In that case Lavery J., when delivering the judgment of the Court, said at p. 176 of the report:
‘In any event, in the opinion of the Court, the property rights guaranteed are to be found in Article 43 and not elsewhere and the rights guaranteed by Article 40 are those stated in Article 43.’
The Court is unable to accept this view. Article 43 does not state what the rights of property are. It recognises private property as an institution and forbids its abolition. The rights in respect of particular items of property are protected by Article 40, s. 3, sub-s. 2, by which the State undertakes by its laws to protect from unjust attack and, in the case of injustice done, to vindicate the property rights of every citizen.”
The learned Chief Justice went on to cite with approval the following statement by Davitt P. at first instance in The Attorney General v. Southern Industrial Trust Ltd. (1957) 94 I.L.T.R. 161:
“Article 40, s. 3 seems to me to be the only provision in the Constitution which protects the individual’s rights to the property which he does own.”
It is, accordingly, clear that the rationale on which Carroll J. based her rejection of the locus standi of the corporate plaintiff in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 can no longer be supported. In contrast to Article 40, s. 1 and Article 43, Article 40, s. 3, sub-s. 2, in enumerating the rights which are thereby guaranteed, refers simply to “the property rights of every citizen”. If the decision in PMPS is to be supported, it must be on the ground that the “property rights of every citizen” thereby guaranteed are confined to rights enjoyed by the citizens as human persons.
Undoubtedly, some at least of the rights enumerated in Article 40, s. 3, sub-s. 2 – the rights to life and liberty – are of no relevance to corporate bodies and other artificial legal entities. Property rights are, however, in a different category. Not only are corporate bodies themselves capable in law of owning property, whether movable or immovable, tangible or intangible. The “property” referred to clearly includes shares in companies formed under the relevant companies’ legislation which was already a settled feature of the legal and commercial life of this country at the time of the enactment of the Constitution. There would accordingly be a spectacular deficiency in the guarantee to every citizen that his or her property rights will be protected against “unjust attack”, if such bodies were incapable in law of being regarded as “citizens”, at least for the purposes of this Article, and if it was essential for the shareholders to abandon the protection of limited liability to which they are entitled by law in order to protect, not merely their own rights as shareholders but also the property rights of the corporate entity itself, which are in law distinct from the rights of its members.
Article 43 undoubtedly treats the general right of private property, the abolition of which in its entirety is expressly prohibited, as one inhering in”man in virtue of his rational being” and, in that sense, as being”antecedent to positive law”, including the Constitution itself. But it does not necessarily follow that the property rights of the individual citizens which are protected against “unjust attack” by Article 40, s. 3 are confined to rights enjoyed by human persons. Had the framers of the Constitution wished to confine the comprehensive guarantee in Article 40, s. 3. in that manner, there was nothing to prevent them including a similar qualification to that contained in Article 40, section 1.
The present case demonstrates that the restriction on the property rights of the citizen which would logically result from confining the protection of Article 40, s. 3 to individual citizens would not necessarily be eased in every case by joining the shareholders as plaintiffs in the proceedings. If this case were to depend on the locus standi of the second plaintiff, it would appear that his property rights as an individual arising out of his ownership of one share in the first plaintiff are of so nominal a nature as not to afford him any such locus standi. It is unnecessary at this point to consider how many other corporate bodies would be in a similarly impotent state, although they would clearly include some in the private sector, such as companies limited by guarantee. It is sufficient to say that, although the strategy adopted in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 of joining the shareholder as a plaintiff was accepted by the Supreme Court as obviating any constitutional difficulty that might have arisen in that case, it is of critical importance that the Court expressly refrained from holding that the corporate plaintiff had no locus standi. In the result, I consider that I am not bound to hold that where, as here, it is not possible to make effective use of such a strategy, the claim of a corporate plaintiff must necessarily fail.
I am satisfied that the expression “every citizen” is not confined in Article 40, s. 3, sub-s. 2 to citizens in their individual capacity as human persons and that artificial legal entities must also be protected by the laws of the State against unjust attacks on their property rights. In the case of injustice done, it is peculiarily the role of the courts to vindicate the property rights of such entities in accordance with Article 40, s. 3, sub-section 2. No doubt such a conclusion might not be reached if one were to adopt a strictly literal approach to these provisions, but as Henchy J. observed in The People v. O’Shea [1982] I.R. 384:
“It may be said of a constitution, more than of any other legal instrument, that ‘the letter killeth, but the spirit giveth life’.”
The submission on behalf of the State that, even if corporate bodies had any locus standi to invoke the relevant provisions of the Constitution, this did not apply to the first plaintiff, having regard to the statutory provisions under which it was incorporated, must next be considered.
Section 6, sub-s. 1 of the Act of 1986 provides that:
“The Board shall cause three Companies limited by shares conforming to the conditions laid down in this Act, to be formed and registered under the Companies Acts.”
Section 7, sub-s. 1 provides:
“Subject to subsection (2), the names of the companies shall be respectively –
(a) Iarnrod Eireann – Irish Rail;
(b) Bus Eireann – Irish Bus;
(c) Bus Ãtha Cliath – Dublin Bus.”
Section 8, sub-s. 1 provides:
“The principal object of the railway company shall be stated in its memorandum of association to be to provide, within the State and between the State and places outside the State, a railway service and a
road freight service and for those purposes to exercise functions in that behalf conferred on the Board by the Act of 1950 or any other enactment.”
Section 8, sub-s. 4 provides:
“There may be included among the objects of each company such other functions of the Board as may be approved by the Board with the consent of the Minister [for Transport] and the Minister for Finance.”
Section 8, sub-s. 8 provides that:
“Each company shall undertake the functions assigned to it by virtue of this Act in compliance with such directions as the Board may give to the company in writing from time to time.”
Section 2, sub-s. 1 provides that:
“‘functions’ includes powers and duties.”
The first plaintiff is, accordingly, what is usually referred to as a”semi-state body”, i.e. a body incorporated by statute to carry out defined public objectives and which is normally accountable, through a specified Minister, to the Government and, through the Government, to the Oireachtas. Their legal structures take different forms: thus, in the present instance, the first plaintiff is required by statute to be a Company limited by shares formed under the Companies Acts, 1963 to 1991. Its parent body, however, Córas Iompair Eireann , which, as has been already noted, owns virtually the entire share capital of the first plaintiff, is a board incorporated by statute (the Transport Act, 1950).
Bodies of this nature are endowed by law with the capacity inter aliato own property and institute proceedings. However, if the submissions on behalf of the State are well-founded, they also suffer from a disadvantage peculiar to them. It is argued that, since they derive their legal existence exclusively from legislation, it would be in some sense anomalous for them to litigate the constitutionality of legislation purportedly enacted by the Oireachtas. Since the Oireachtas has brought them into being, the argument runs, it can equally impose whatever disability it wishes on them and cannot be held to account, as it were, by the courts.
It is, of course, within the competence of the Oireachtas to provide for the establishment of bodies which do not have the normal indicia of corporate bodies, including the capacity to own property and sue and be sued. Where, however, the Oireachtas has decided, as it manifestly has in the present instance, that a semi-state body charged with the achievement of statutory objectives of a public nature should take the form of a body corporate enjoying the usual powers of such bodies, I see no reason for attributing to the Oireachtas the intention that its powers should be emasculated in the manner suggested. The requirement that the first plaintiff should be formed and registered as a company under the Companies Acts, 1963 to 1991, was presumably because the Oireachtas considered that this was the form of organisation best calculated to facilitate the achievement of their statutory objectives. It was clearly envisaged that, although the first plaintiff was to enjoy a statutory monopoly in the provision of certain services, it was also to operate as a commercial body. To that end, it needed powers inter alia to own property and institute proceedings. I see no reason to suppose that the Oireachtas intended that, unlike other commercial companies formed for purely private profit, the first plaintiff was precluded from invoking the protection of the Constitution when those rights were under unjust attack, whether from the Oireachtas, the executive or any other quarter. I am, accordingly, satisfied that this submission is not well-founded.
As already noted, it was submitted on behalf of the first plaintiff that, even if the rights of private property and fair procedures on which it relied were not vested in it because it was a body corporate and the second plaintiff’s shareholding was of too nominal a nature to afford him locus standi, it was nevertheless entitled to institute the present proceedings since, if its arguments on the substantive issue were well-founded, it would be unarguably seriously affected by the unconstitutional provisions of the Act of 1961. Although this issue does not now arise, I think that since it was fully argued I shall state my conclusions.
The learned editors of Kelly, “The Irish Constitution” (3rd Ed.) discuss at pp. 446-7 the question as to whether the locus standi rules which our courts have evolved are constitutionally required or are simply”judicially created rules of prudence which may be relaxed or expanded as occasion requires”. They comment as follows:
“This question has implications far beyond the law of standing, since it contains the answer to a more fundamental question, namely, whether the courts are prepared to see that the executive and legislature observe each and every provision of the Constitution, even in cases such as Articles 2 and 3 where it is unlikely that there will ever be a plaintiff who can point to real and tangible injury as a result of a breach of a constitutional norm. In this connection, it may be observed that the U.S. courts have firmly set their face against expanded standing rules of this kind. The ‘case and controversies’ provisions of Article III of the U.S. Constitution have been held to imply a minimum standing threshold which is not satisfied by ‘abstract injury in non-observance of the Constitution . . . asserted by citizens’. In this connection, the U.S. courts have been unimpressed by the argument that every citizen has an interest in ensuring that the Constitution is observed.
This approach appears to have been decisively rejected by the Irish courts.”
That view is obviously supported by the many cases in the last four decades which have come before our courts in which the plaintiffs who sought to challenge the enactments were not in a position to claim that their rights had been any more adversely affected by the impugned legislation than other citizens: see, for example, O’Donovan v. Attorney General [1961] I.R. 114; Ryan v. Attorney General [1965] I.R. 294; Boland v. An Taoiseach [1974] I.R. 338; McMahon v. Attorney General [1972] I.R. 69; Crotty v. An Taoiseach [1987] I.R. 713 and S.P.U.C. v. Coogan (No. 1) [1989] I.R. 734. However, despite the generous approach to the question of locus standi adopted by the courts, either expressly or by implication, in those cases, it cannot be said that, because every citizen has an interest in ensuring that the Constitution is observed, everyone is entitled to invoke its provisions, irrespective of any actual or threatened injury to him or her resulting from the operation of the impugned statute. In East Donegal Co-operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317, Walsh J., speaking for the Supreme Court, said at p. 338:
“With regard to the locus standi of the plaintiffs the question raised has been determined in different ways in countries which have constitutional provisions similar to our own . . . at one end of the spectrum of opinions on this topic one finds the contention that there exists a right of action akin to an actio popularis which will entitle any person, whether he is directly affected by the Act or not, to maintain proceedings and challenge the validity of any Act passed by the parliament of the country of which he is a citizen or to whose laws he is subject by residing in that country. At the other end of the spectrum is the contention that no one can maintain such an action unless he can show that not merely do the provisions of the Act in question apply to activities in which he is currently engaged but that their application has actually affected his activities adversely. The Court rejects the latter contention and does not find it necessary in the circumstances of this case to express any view upon the former.”
The question left open by the Supreme Court in that case – as to whether everyone who is subject to Irish law is entitled to challenge the validity of an Act of the Oireachtas irrespective of whether he is directly
affected by it – was answered firmly in the negative by that Court in Cahill v. Sutton [1980] I.R. 269. In that case, the Court declined to allowlocus standi to a plaintiff who challenged the validity of a provision of the Statute of Limitations, 1957, on the ground that its application in certain cases – but not hers – would unjustly deprive a person wrongfully injured of access to the courts. Henchy J. characterised the plaintiff’s position (at p. 280) thus:
“The plaintiff is seeking to be allowed to conjure up, invoke and champion the putative constitutional rights of a hypothetical third party, so that the provisions . . . may be declared unconstitutional on the basis of that constitutional jus tertii – thus allowing the plaintiff to march through the resulting gap in the statute.”
Having pointed out that the contrast drawn in the East Donegal Co-Operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317 was between “widely divergent opinions or contentions” and not between opposing judicial attitudes in other countries, he said at p. 282:
“. . . in other jurisdictions the widely accepted practice of courts which are invested with comparable powers of reviewing legislation in the light of constitutional provisions is to require the person who challenges a particular legislative provision to show either that he has been personally affected injuriously by it or that he is in imminent danger of becoming the victim of it. This general rule means that the challenger must adduce circumstances showing that the impugned provision is operating, or is poised to operate, in such a way as to deprive him personally of the benefit of a particular constitutional right. In that way each challenge is assessed judicially in the light of the application of the impugned provision to the challenger’s own circumstances.”
The sentence to which I have added emphasis was relied on particularly on behalf of the State. It is, however, to be seen in the context of the next passage, viz:
“This general, but not absolute, rule of judicial self-restraint has much to commend it. It ensures that normally the controversy will rest on facts which are referrable primarily and specifically to the challenger, thus giving concreteness and first hand reality to what might otherwise be an abstract or hypothetical legal argument.”
Henchy J.’s reference at that point to the fact that the “rule of judicial self-restraint”, as he calls it, is not absolute is given added weight by the following passage in his judgment (at p. 285):
“This rule, however, being but a rule of practice must, like all such rules, be subject to expansion, exception or qualification when the justice of the case so requires. Since the paramount consideration in the exercise of the jurisdiction of the courts to review legislation in the light of the Constitution is to ensure that persons entitled to the benefit of a constitutional right will not be prejudiced through being wrongfully deprived of it, there will be cases where the want of the normal locus standi on the part of the person questioning the constitutionality of the statute may be overlooked if, in the circumstances of the case, there is a transcendent need to assert against the statute the constitutional provision that has been invoked.”
He finally summarises (at p. 286) the legal position as follows:
“The primary rule as to standing in constitutional matters is that the person challenging the constitutionality of the statute, or some other person for whom he is deemed by the court to be entitled to speak, must be able to assert that, because of the alleged unconstitutionality, his or that other person’s interests have been adversely affected, or stand in real or imminent danger of being adversely affected, by the operation of the statute.”
It will be observed that Henchy J. in this passage is careful to state the rule in terms of damage, existing or genuinely apprehended, to interestsand not to rights.
It is clear from these authorities that the cases in which questions oflocus standi have arisen tend to fall into two broadly different categories. In the first – of which O’Donovan v. Attorney General [1961] I.R. 114; Boland v. An Taoiseach [1974] I.R. 338 and Crotty v. An Taoiseach [1987] I.R. 713 are typical – the nature of the constitutional challenge is such that it is extremely improbable that a plaintiff will emerge whose interests may be said to be either immediately or prospectively affected in a manner specific to him or her. Such claims typically arise in the context of purported changes to the structure of government itself or its relationship to other sovereign governments. In such cases, the courts have evinced a readiness to afford locus standi to concerned citizens so as to ensure that constitutionally suspect legislation does not remain on the statute book because of the absence of a suitably qualified challenger.
The second category consists of cases – of which East Donegal Co-Operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317 and Cahill v. Sutton [1980] I.R. 269 are typical – in which the impugned legislation is of such a nature that it is probable that a plaintiff will emerge of whom it can be said that he or she is affected by the legislation in question in a manner peculiar to him or her. In such a case, the courts are unwilling to afford locus standi to a plaintiff unless they are satisfied that his or her interests, although not necessarily his or her constitutional rights, are either immediately or potentially affected by the application of the challenged provision.
This case clearly falls into the second category and thus the application of the test propounded by Henchy J. in Cahill v. Sutton is appropriate. I am satisfied that the first plaintiff meet the threshold requirements set out by the learned judge in the passages which I have cited. It is beyond argument that, if the provisions which they claim to be constitutionally invalid are allowed to operate in respect of the many claims now pending, their financial interests will be gravely affected. Their position is in stark contrast to that of the plaintiff in Cahill v. Sutton . Nor could they conceivably come within the category of the “busybody and the crank” or”the obstructionist, the meddlesome, the perverse” to mention some of the categories referred to respectively by O’Higgins C.J. and Henchy J. in Cahill v. Sutton as being categories of litigants who should not be encouraged by the courts.
It should finally be pointed out that, if the assumption on which I have been proceeding is correct, i.e. that bodies corporate cannot invoke the constitutional rights relied on by the first plaintiff in the present proceedings, a challenge to these provisions on constitutional grounds might never emerge. The solvent defendants who would be likely to challenge the provisions in question are semi-state bodies such as the first plaintiff, local authorities, Ministers and persons who are insured. If the argument on behalf of the State is correct, however, only the last-mentioned category will be able to establish locus standi and then only if the strategy in Private Motorists’ Provident Society v. Attorney General [1983] I.R. 339 is adopted, presumably by the institution of independent proceedings by the shareholders of an insurance company. The law could hardly be said to be in a satisfactory state if, in an area where the interests of a large number of corporate bodies were unquestionably affected, a challenge to the validity of the legislation would be entirely dependant on the willingness of shareholders of a particular category to abandon the protection of limited liability.
I am satisfied that the first plaintiff has locus standi to question in these proceedings the validity of the relevant sections of the Act of 1961 having regard to the provisions of the Constitution.
Keane J.
(3) The Constitution
Since s. 12, sub-s. 1 of the Act of 1961 is declaratory of the common law, the claim by the plaintiffs that it is invalid having regard to the provisions of the Constitution necessarily involves the proposition, which they did not shrink from asserting, that the common law principle in question ceased to be part of our law, at the latest, in 1937 with the enactment of the Constitution. It is, however, clear that the Oireachtas elected to embody the principle in an enactment passed subsequent to the Constitution, and that the Act of 1961 enjoys the presumption of constitutionality attaching to all Acts of the Oireachtas since the enactment of the Constitution.
It is accepted in the present case that what is described as the “attack”on the property rights of the first plaintiff represented by s. 12 of the Act of 1961 cannot be regarded as “unjust” within the meaning of Article 40, s. 3, sub-s. 2 if it is authorised by Article 43, s. 2, sub-s. 2 as being in accordance with the principles of social justice and as also being a delimitation of the exercise of those rights “with a view to reconciling their exercise with the exigencies of the common good”. As O’Higgins C.J. put it in Madigan v. Attorney General [1986] I.L.R.M. 136 at p. 161, the tax measures there under consideration which interfered with certain property rights “cannot be challenged as being unjust on that account, if what has been done can be regarded as action by the State in accordance with the principles of social justice and having regard to the exigencies of the common good as envisaged by Article 43, s. 2 of the Constitution.”
In considering whether the interference with property rights is justifiable in those terms, the observations of Finlay C.J. in In re The Matrimonial Home Bill , 1993 [1994] 1 I.R. 305 at p. 326 must be borne in mind. The learned Chief Justice said:
“Having regard to the extreme importance of the authority of the family as acknowledged in Article 41 of the Constitution and to the acceptance in that Article of the fact that the rights which attach to the family including its right to make decisions within its authority are inalienable and imprescriptible and antecedent and superior to all positive law, the Court is satisfied that such provisions do not constitute reasonably proportionate intervention by the State with the rights of the family and constitute a failure by the State to protect the authority of the family.”
Mutatis mutandis, the approach therein adopted is appropriate in applying the provisions of the Constitution under consideration in this case. If the State elects to invade the property rights of the individual citizen, it can do so only to the extent that this is required by the exigencies of the common good. If the means used are disproportionate to the end sought, the invasion will constitute an “unjust attack” within the meaning of Article 40, s. 3, sub-section 2.
The criteria which the court should employ in determining whether the means used in the case of any particular enactment are disproportionate to the end sought were defined as follows by Costello J (as he then was) in Heaney v. Ireland [1994] 3 I.R. 593 at p. 607:
“The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right. It must relate to concerns pressing and substantial in a free and democratic society. The means chosen must pass a proportionality test.
They must:
(a) be rationally connected to the objective and not be arbitrary, unfair or based oil irrational considerations,
(b) impair the right as little as possible, and
(c) be such that their effects on rights are proportional to the objective.”
The second basis on which the Constitution is invoked in the present case is that the measures complained of deprive the first plaintiff of the fair procedures to which they are entitled in vindication of the personal rights guaranteed by Article 40, section 3.
The concept of “fair procedures” is, in effect, the traditional doctrine of “natural justice”, although its application has been extended beyond the historic maxims of audi alteram partem and nemo iudex in causa suawhich were at its heart. It is concerned, not with the substance of constitutional rights, but with the manner in which they are protected and vindicated by the organs of the State. In the present case, if the provisions of the Act of 1961 which are challenged in the present case constitute an unjust attack on the property rights of the first plaintiff, they must fall and cannot be saved by the fact that the actual process of litigation under which the first plaintiffs liability to the fifth defendant and its entitlement to contribution from the fourth defendant were determined was impeccably fair. Conversely, if the enactment is not invalid, there is no procedural injustice to which the first plaintiff can point as affording it an alternative ground of challenge. In the result, I am satisfied that considerations of”fair procedures” are not relevant to the constitutional issue in the present case.
(4) The res judicata issue
There remains for consideration the argument advanced on behalf of the fifth defendant that the issues between him and the first plaintiff have been conclusively determined by the High Court and the Supreme Court, and that those issues are accordingly res judicata and cannot be reopened by this Court even if it should be found that ss. 12 and 14 of the Act of 1961, by virtue of which the fifth defendant is entitled to levy the full amount of his judgment against the first plaintiff, are invalid having regard to the provisions of the Constitution.
Following the decisions of the Supreme Court in McMahon v. Attorney General [1972] I.R. 69 and De Burca v. Attorney General [1976] I.R. 38, there was uncertainty as to the extent to which a finding of constitutional invalidity is to be regarded as retroactive in its effects. Some of the difficulties, though it may be not all, were resolved by the subsequent decision of the Court in Murphy and Murphy v. Attorney General [1982] I.R. 241. In that case, the Court unanimously rejected the proposition that a finding that certain provisions concerning the taxation of married couples were unconstitutional necessitated the repayment by the State to all married couples of the excessive tax paid by them. The majority of the Court held that the invalidity of the impugned provisions dated, not simply from the time on which they were found to be invalid by the Court, but from the time the Constitution was enacted. Similarily, in the present case, if the plaintiffs’ claim made is well-founded, it follows, as already noted, that the common law rule, of which ss. 12 and 14 is merely declaratory, ceased to be part of the law when the Constitution was enacted.
However, while the plaintiffs’ claim to be reimbursed some at least of their overpayments of tax was allowed in that case, the Court made it clear that it did not follow from the striking down of the statutory provisions that there had to be a general reopening of accounts, as it were. between the individual taxpayers and the State extending over many years. The ratio of the decision appears clearly from the following passage in the judgment of Henchy J. (at p. 314):
“While it is central to the due administration of justice in an ordered society that one of the primary concerns of the courts should be to see that prejudice suffered at the hands of those who act without legal justification, where legal justification is required, shall not stand beyond the reach of corrective legal proceedings, the law has to recognise that there may be transcendent considerations which make such a course undesirable, impractical, or impossible.
Over the centuries the law has come to recognise, in one degree or another, that factors such as prescription (negative or positive), waiver, estoppel, laches, statutes of limitations, res judicata, or other matters (most of which may be grouped under the heading of public policy) may debar a person from obtaining redress in the courts for injury, pecuniary or otherwise, which would be justiciable and redressable if such considerations had not intervened. To take but two examples, both from a non-constitutional context, where a judicial decision is overruled by a later one as being bad law, the overruling operates retrospectively, but not so as to affect matters that in the interval between the two decisions became res judicatae in the course of operating the bad law (see Thomson v. Saint Catherine’s College, Cambridge [1919] A.C. 468 and Henderson v. Folkestone Waterworks Company (1885) 1 T.L.R. 329).
For a variety of reasons, the law recognises that in certain circumstances, no matter how unfounded in law certain conduct may have been, no matter how unwarranted its operation in a particular case, what has happened has happened and cannot, or should not, be undone. The irreversible progressions and by-products of time, the compulsion of public order and of the common good, the aversion of the law from giving a hearing to those who have slept on their rights, the quality of legality – even the irreversibility – that tends to attach to what has become inveterate or has been widely accepted or acted upon, the recognition that even in the short term the accomplished fact may sometimes acquire an inviolable sacredness, these and other factors may convert what has been done under an unconstitutional, or otherwise void, law into an acceptable part of the corpus juris. This trend represents an inexorable process that is not peculiar to the law, for in a wide variety of other contexts it is either foolish or impossible to attempt to turn back the hands of the clock. As an eminent historian vividly put it, speaking of the pointlessness of seeking to undo or reshape the facts of history: ‘the statue has taken its shape and can never go back to the quarry’.”
In considering the application of this passage in the present case, the sequence of events in the trial before Johnson J. is of some importance. While the challenge to the constitutionality of the Act of 1961 was not expressly raised on behalf of the first plaintiff until after the Court had determined the issues of liability and apportionment and assessed the damages, it appears from the transcript of those proceedings that the possibility of such a challenge had been raised at an earlier stage in the proceedings.
It is unnecessary, in the context of the present proceedings, to consider whether Henchy J., in the passage which I have quoted, intended to convey that the principle of res judicata would in all circumstances prevent the re-opening of accounts between parties even where those accounts had been settled on a basis subsequently found to be unconstitutional. It may be that his reference to res judicata was intended to be no more than an illustration of the general principle of public policy, which he was there invoking, against allowing a finding of constitutional invalidity to unravel without limitation of time or numbers all the proceedings and transactions which had been completed on the basis of the relevant legislation.
In the present case, the first plaintiff during the course of the very proceedings which are alleged to have given rise to an irreversible state of affairs, attempted to challenge the validity of the legislation and, hence, their legal liability to the fifth defendant for the entire of his damages and failed to bring such a challenge to finality solely by reason of the ruling of the Supreme Court that such a claim would have to be made in separate proceedings. I am satisfied that, to use the language of Henchy J. in Murphy and Murphy v. The Attorney General [1982] I.R. 241, it is neither undesirable nor impractical nor, least of all, impossible to treat the fifth defendant as being in the same position as any other plaintiffs in the event of the plaintiffs’ claim being upheld.
Conclusions
If the submissions advanced on the plaintiffs’ behalf are well founded, the rule of the common law that a plaintiff is entitled to recover all the damages to which he is entitled against any one of a number of wrongdoers who are in law responsible for them ceased to be part of our law on the enactment of the Constitution in 1937. They also submit that the provisions of ss. 12 and 14 of the Act of 1961, which are drafted on the same basis, are invalid having regard to the provisions of the Constitution.
It has not been suggested in the present case that any machinery exists in the law for determining the amount of the damages to which the plaintiff would be entitled, assuming those submissions to be correct, other than the contribution machinery established under the Act of 1961.
In the result, a plaintiff who was reduced to the condition of a quadriplegic as a result of the admitted negligence of two defendants would recover only 10% of the damages awarded to him, if one of the two defendants was impecunious and the apportionment was in those proportions. Although the damages might run into several million pounds, a significant proportion of it attributable to the huge cost of medical and nursing care and other special facilities required into the future, only a relatively insignificant fraction of the damages would be recoverable. The solvent wrongdoer, in most cases in fact, if not in legal theory, an insurance company or some other body amply endowed with funds to meet just such a contingency, would find themselves exonerated from liability for the overwhelming bulk of the damages caused ex hypothesi by their own negligence.
Such a result would follow, although, as I have already found, under the contribution provisions, which would remain in place even if the plaintiffs’ submissions are well founded, the liability of the defendantsinter se is to be determined solely by reference to their blameworthiness. The drastic reduction in his damages will be effected even where the solvent defendant’s negligence was, overwhelmingly, the cause of his injuries.
It has been argued that this apparent injustice should be redressed by the State and not by the exaction of compensation from defendants in the position of the first plaintiff. Whatever the merits may be of the proposals to this end canvassed in argument, it has not been suggested that the Court is in any position to ensure that any of them are in place following its decision. While courts have on occasions drawn the attention of the Oireachtas with varying degrees of emphasis (and not always immediate results) to serious anomalies and injustices disclosed by their decisions, it has never been their function to legislate so as to cure these defects. In the present case, it would involve the Court in determining whether the loss should be transferred to the taxpayer or should be borne collectively by bodies such as insurance companies, questions of social policy which are beyond the competence of the judicial arm to resolve. In the result, the seeming injustice to the fifth defendant and all injured parties in the same position will remain without remedy until such time as the Oireachtas takes action. This, it is said, is the effect on our law of tort of the enactment of the Constitution in 1937.
It has been accepted in the course of the arguments in this case, if not expressly then by implication, that a system of law which enables those who have harmed others, either intentionally or in circumstances where their conduct could be objectively regarded as blameworthy, to recover compensation from those responsible is an essential feature of a civilised society. It is, I think, helpful in arriving at a conclusion in this case to consider that general principle in the light of the Constitution.
When the framers of the Constitution required the State to protect the personal rights of the citizen and to vindicate them in the case of injustice done, they were aware that the same instrument provided for the retention of the common law in the Irish law, of which it had formed a central part since its first migration from its homeland in the twelfth century. Although there has been some judicial support for the view that the reference in Article 50, s. 1 to “the laws in force” which are to be preserved is to statute law only, it seems difficult to establish any constitutional origin other than Article 50 for the common law doctrines applied by Irish courts since 1937 and which, indeed, had been similarly applied by them since 1922 on the basis of Article 73 of the Constitution of the Irish Free State, which was in similar terms. No doubt it was envisaged that the Irish courts would continue to develop the common law, as they had done since independence, in the light of changing social conditions in Ireland and decisions in other common law jurisdictions. No doubt it was also contemplated that the Oireachtas would, as circumstances demanded, intervene to amend or codify the law from time to time. But when they spoke of “injustice done”, they must surely have had in mind, not simply the right of the citizens to protection against oppression by the organs of the state, but also their right to a remedy if they became the innocent victims of the blameworthy conduct of others, the historic province of the law of tort. And while that law is not spelled out in the Constitution, any more than the precise nature of the trial by jury to which the citizen was entitled in the case of serious crime was identified, there can have been little doubt in the minds of those who gave their assent to the document as to the system of civil justice which was envisaged in Article 40, s. 3, sub-s. 2 as providing for the protection and vindication of the rights of the citizen.
The law of tort so retained in our jurisprudence allowed for liability where it could not be said that the injury or damage had been the result of any blameworthy conduct, let alone intentional wrongdoing. The rule in Rylands v. Fletcher (1868) L.R. 2 H.L. 330, the doctrine of vicarious liability and the law as to animals ferae naturae are obvious examples. But its characteristic manifestation, most clearly demonstrated in the ever-developing tort of negligence, was the action based on fault. The greatest master of the Anglo-American common law system, writing when it had recently broken free from the tyrannical restraints of the forms of action and was entering its most creative era, had this to say:
“. . . in the main the law started from those intentional wrongs which are the simplest and most pronounced cases, as well as the nearest to the feeling of revenge which leads to self-redress. It thus naturally adapted the vocabulary, and in some degree the tests, of morals. But as the law has grown, even when its standards have continued to model themselves upon those of morality, they have necessarily become external, because they have considered, not the actual condition of the particular defendant, but whether his conduct would have been wrong in the fair average member of the community, whom he is expected to equal at his peril.
In general, this question will be determined by considering the degree of danger attending the act or conduct under the known circumstances. If there is danger that harm to another will follow, the act is generally wrong in the sense of the law . . .
But while the law is thus continually adding to its specific rules, it does not adopt the coarse and impolitic principle that a man always acts at his peril. On the contrary, its concrete rules, as well as the general questions addressed to the jury, show that the defendant must have had at least a fair chance of avoiding the infliction of harm before he becomes answerable for such a consequence of his conduct. And it is certainly arguable that even a fair chance to avoid bringing harm to pass is not sufficient to throw upon a person the peril of his conduct, unless, judged by average standards, he is also to blame for what he does.” (Holmes, The Common Law, pp. 161 and 162).
The degree to which the establishment of fault should be a necessary ingredient of the tort action has, of course, been the subject of much debate, not only since Holmes wrote but also with increasing frequency since the enactment of the Constitution. But while there has been intermittent judicial support, in an era where the role of insurance has become so all important, for what he might have considered the “coarse and impolitic”policy of allowing the loss to lie on shoulders broad enough to carry it, and much discussion in Ireland as in other common law jurisdictions of the merits of systems of “universal liability” in road accident cases, it would be quite another matter to seek to turn back the clock by easing the burden of the wrongdoer at the expense of his victim.
If the plaintiffs’ arguments in the present case are well founded, it means that the defendant whose conduct has been blameworthy in this sense will escape liability for a significant part of the damage which he has brought about, solely because another person was also to blame and is impecunious. The effect of the Constitution will thus have been to exonerate to that extent the blameworthy at the expense of the blameless. I am satisfied that it cannot have been the intention of the framers of the Constitution, in providing protection for the property rights of the citizen, that the Constitution should be the source of a significantly greater injustice than is involved in the abridgement of those rights which was the necessary consequence of a civilised and humane system of tortious liability.
It follows that the common law rule that joint tortfeasors and several tortfeasors were each liable for all the damage recoverable by the plaintiff was not inconsistent with the Constitution within the meaning of Article 50, section 1. It may well be, of course, that had a challenge been launched to the rule in Merryweather v. Nixan (1799) 8 Term Rep. 186 before it was removed from our law by the Tortfeasors Act, 1951, it would have been found inconsistent with the Constitution as not vindicating the rights of defendants. But since that enactment, that issue has been academic.
For those reasons, I am satisfied that the claim in the present proceedings that ss. 12 and 14 are invalid having regard to the provisions of the Constitution cannot succeed, since they are only challenged to the extent to which they are declaratory of the common law principle which, as I have found, survived the enactment of the Constitution.
However, if contrary to the view already expressed the Tortfeasors Act, 1951, and the Act of 1961 are to be regarded as having started from atabula rasa and the constitutional validity of the latter measure is to be assessed without reference to the state of the common law prior to the enactment of the Constitution, I would similarly reach the conclusion that the plaintiffs in these proceedings have failed to discharge the onus which rests on them of establishing that these provisions are invalid.
The Oireachtas elected in 1961 to legislate on the basis that wrongfully injured plaintiffs should be entitled to recover adequate compensation from any of those who could reasonably be regarded as having caused those injuries. It was open to it to provide that a wrongdoer who was unable to recover contribution from a fellow wrongdoer should be compensated either at the public expense or by some form of levy on insurance companies. In considering whether such a scheme was in the public interest, it would have been entitled to bear in mind that ultimately the cost of such proposals would be borne either as a result of taxation or increased insurance premia by the public. It was entirely within the competence of the Oireachtas as a matter of social policy not to adopt that course, but rather to seek to balance the competing constitutional rights of plaintiffs and defendants without imposing additional burdens on the public.
That the concerns of the Oireachtas in this area were those characteristic of a responsible legislature in a free and democratic society is not open to doubt. Nor could it plausibly be suggested, in my view, that the means it adopted were disproportionate to the ends sought or arbitrary, unfair or irrational. The analysis of the difficult problems of causation and blameworthiness carried out in this case demonstrates that, if the legislature had adopted the course suggested by the plaintiffs in this case, in determining the proportion of compensation to which concurrent wrongdoers were entitled at the public expense or by a levy on insurance companies it would inevitably have found itself enacting a statutory scheme which could be plausibly attacked as being itself arbitrary and irrational. In my judgment, in enacting the common law rule but significantly modifying its harshness by establishing an appropriate contribution machinery, it acted wholly within the legislative discretion afforded to it under the Constitution.
The plaintiffs’ claim will, accordingly, be dismissed.
John E Shirley & Ors v A O Gorman & Ors
[2006] IEHC 27 (31 January 2006)
While the second and third named defendants have raised a locus standi point in relation to the plaintiffs on the basis, inter alia, that the second named plaintiff is not an Irish registered corporation, I am completely satisfied that as the owner of the properties in question (including as shareholders in the company), and in particular the property the subject of the O’Gorman lease, all of the plaintiffs in their respective capacities are entitled to mount this constitutional challenge to the statutory scheme. The court has been referred by Mr Fitzsimons to a number of decisions in this regard, but the Court is content to respectfully refer to the judgment of Keane J. (as he then was) in Iarnrod Eireann v. Ireland [1996] 3 IR 321, and I refer in particular to the passage from that judgment appearing at p. 345 thereof as follows:
“Undoubtedly, some at least of the rights enumerated in Article 40, s.3, sub-s.2 – the rights to life and liberty – are of no relevance to corporate bodies and other artificial legal entities. Property rights are, however, in a different category. Not only are corporate bodies themselves capable in law of owning property, whether movable or immovable, tangible or intangible. The ‘property’ referred to clearly includes shares in companies formed under the relevant companies’ legislation which was already a settled feature of the legal and commercial life of this country at the time of the enactment of the Constitution. There would be a spectacular deficiency in the guarantee to every citizen that his or her property rights will be protected from ‘unjust attack’, if such bodies were incapable in law of being regarded as ‘citizens, at least for the purpose of this Article, and if it was essential for the shareholders to abandon the protection of limited liability to which they are entitled by law in order to protect, not merely their own rights as shareholders but also the property rights of the corporate entity itself, which are in law distinct from the rights of its members…”
The position is beyond any real argument in my view as far as these plaintiffs are concerned, and it is unnecessary for me to set out the arguments and the case law to which I have been referred by Counsel. Equally the fact that the second named plaintiff is a company registered outside this jurisdiction does not impinge adversely upon its locus standi in these proceedings. Mr Fitzsimons has referred to a passage of the judgment of the Supreme Court in Re: Article 26 and the Illegal Immigrants (Trafficking) Bill 1999 [2000] 2 IR 360 at p. 385 as follows:
“It would be contrary to the very notion of a state founded on the rule of law, as this State is, and one in which, pursuant to Article 34 justice is administered in courts established by law, if all persons within this jurisdiction, including non-nationals, did not, in principle, have a constitutional right of access to the courts to enforce their legal rights……… It may be that in certain circumstances a right of access to the courts of non-nationals may be subject to conditions or limitations that would not apply to citizens. However, where the State or State authorities make decisions which are legally binding on, and addressed directly to, a particular individual within the jurisdiction, whether a citizen or non-citizen, such decisions must be taken in accordance with the law and the Constitution. It follows that the individual legally bound by such a decision must have access to the courts to challenge its validity. Otherwise the obligation on the State to act lawfully and constitutionally would be ineffective.”
In my view the entitlement of the plaintiffs, or any of them to make the challenge in these proceedings is clear.
The plaintiffs’ outline argument:
The starting point for the plaintiffs’ constitutional argument is the relevant Articles of the Constitution itself which they contend provide for them a guarantee of protection against the mischief, as they see it, of the impugned statutory provisions.
Article 40.3 provides as follows;
“1. The State guarantees in its laws to respect, and as far as is practicable, by its laws to defend and vindicate the personal rights of the citizen.
2. The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.”
Article 43 provides as follows:
“1. 1. The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
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2. The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1. The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2. The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
The legislative provisions which constitute what has been referred to as the statutory scheme enjoy the presumption of constitutionality, and the plaintiffs seek to rebut that presumption by their evidence and submissions.
Eoghan Fitzsimons SC for the plaintiffs immediately draws attention to the fact that the right to private property is not an absolute right, and that it may be “regulated by the principles of social justice”. He hopes by his submissions and by adducing appropriate evidence, which I shall come to in due course, to demonstrate to the Court that the impugned statutory scheme no longer pursues any aim which accords with any principle of social justice, even if it may be seen to have done so in times past when circumstances in the State were not as they are now.
Mr Fitzsimons pays particular attention to the word “accordingly” which appears at the commencement of Article 43.2.2, and submits that its meaning must be that it is only when seeking to pursue a principle of social justice that the Oireachtas may pass a law which delimits the exercise of these rights for the purpose of “reconciling their exercise with the exigencies of the common good”. In that regard he has referred to a passage from the judgment of the Supreme Court in Re: Article 26 and the Employment Equality Bill 1996 [1997] 2 IR 117 at 367:
“In reading Article 43 of the Constitution it is important to stress the significance of the word “accordingly” which appears in Article 43, s.2, subsection 2. It is because the rights of private property “ought” in civil society to be regulated by “the principles of social justice” that the State may, as occasion requires delimit their exercise with a view to reconciling it with “the exigencies of the common good”. It is because such a delimitation, to be valid, must be not only reconcilable with the exigencies of the common good but also with the principles of social justice that it cannot be an unjust attack on a citizen’s private property pursuant to the provisions of Article 40, s.3 of the Constitution (see judgment of Walsh J. in Dreher v. Irish Land Commission (1984) ILRM 94)”
In addition to passing these two tests of pursuing principles of social justice and the exigencies of the common good, Mr Fitzsimons also submits that any legislation which seeks to delimit the exercise of rights of private property must also not offend against the principle of proportionality. In other words, the measures being taken in the legislation under scrutiny must encroach upon the rights of the property owner no more than is necessary for the attainment of the objective sought to be achieved. Mr Fitzsimons submits that even if this Court was to find that there is identifiable some social justice principle which justifies the regulation of the plaintiffs’ property rights by delimiting them in accordance with the exigencies of the common good, the mechanisms by which that is achieved by the statutory scheme, including the price-fixing mechanism contained in s. 7 of the Landlord & Tenant (Amendment) Act, 1984 (“the 1984 Act”), go far beyond what is necessary or required for any such purpose, and are disproportionate, arbitrary, unjust and unconstitutional. Section 7(4) of that Act provides as follows:
“7 (4) (a) Where at the relevant date, the land is held under a lease that has expired or is held at a rent which, whether under the terms of the lease or by operation of a statute, is subject to a review which is due but has not been made, the purchase of the fee simple shall, subject to the other provisions of this section, be a sum equal to one-eighth of the amount which, at that date, a willing purchaser would give and a willing vendor would accept for the land in fee simple free of all estates, interests and incumbrances, but having regard to any covenant which continues in force by virtue of section 28 of Act (No.2) of 1978, and assuming that the lessee has complied with any other covenants or conditions in his lease that could affect the price.
(b) Deduction shall be made from that amount equal to the value of the goodwill, if any, in the premises of the person acquiring the fee simple.
(c) A deduction shall also be made from that amount equal to any addition to the value of the premises resulting from such works as would qualify for the special allowance mentioned in section 35 of the Act of 1980.
(d) In determining the amount referred to in paragraph (a) any addition to value deriving from contemplation of substantial rebuilding, or a scheme of development (such as are mentioned in section 33(1)(b)(i) and (ii) of the Act of 198 shall be disregarded.”
Evidence given on behalf of the plaintiffs by valuer, David Freeman, has indicated that the present market value of the entire premises on the open market as of 1998, including the supermarket erected by the tenant, but excluding any goodwill value attaching to the premises, would be in the region of €1,200,000. This figure was disputed by Mr Good, a valuer called on behalf of the tenant. He said the premises would fetch something more like £300,000, and not €1,200,000. In contrast to those figures, there has been evidence from Mr Freeman that the market value of the original Carrick House premises (excluding any tenant’s works), as of 1998, is in the region of €330,000, and from Mr Good that on the same basis the value would be between £150,000 and £180,000. I do not propose revisiting these conflicts in evidence. I dealt with the conflicts in the valuation evidence in so far as I had to for the purpose of the Circuit Appeal. It is safe to say, however, for the purposes of the present case, that the value of the entire premises now, which includes the developed supermarket premises, and any further addition to that value by virtue of any potential development value, is far in excess of any notional 1998 market value of the stand-alone Carrick House premises as originally demised, the latter being the figure by which the price for the acquisition of the fee simple is to be calculated on the basis of one-eighth thereof.
It will be seen from my judgment delivered on the 31st May 2005 that I concluded that the first named defendant is a person to whom s. 8 of the Landlord and Tenant (Ground Rents) (No.2) Act, 1978 gives an entitlement to enlarge its leasehold interest in these business premises by acquiring the fee simple interest therein from the plaintiffs, since the said defendant came within the provisions of s. 9 (1) of that Act, and in particular met one of the conditions set forth in s.10 of that Act, namely subsection (2) thereof which provides:
” that the lease is for a term of not less than fifty years and the yearly amount of the rent or the greatest rent reserved thereunder (whether redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of service under section 4 of the Act of 1967 of notice of intention to acquire the fee simple, or the date of an application under Part III of this Act, as the case may be, and that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title; provided that it shall be presumed, until the contrary is proved, that the buildings were not so erected.”
The first named defendant acquired the 1945 leasehold interest in the premises in 1974 from a Mr Connolly. There was evidence before me that at the time of purchase there was a butcher’s shop and supermarket run from the premises, and that in 1979 and thereafter, following certain grants of planning permission, the first named defendant greatly extended and altered the premises into, inter alia, a much larger supermarket. In my said judgment I have set out in detail the nature of subsequent planning permissions and developments on foot thereof, and I concluded that one consequence of this process of development was that the so-called Carrick House premises as originally demised, had been caused to lose its original identity for the purpose of s. 9 (2) of the 1978 Act. As also set forth in that judgment there was evidence that the cost of the various developments by the first named defendant between the years 1979 and 1996 was in excess of €300,000, and that the area covered by buildings had been enlarged as a result from 283 sq. metres to an area of some 1339 sq. metres.
The rent under the lease (as adjusted in 1970 from £55 per annum in exchange for the removal of the residential use restriction) is £75 per annum. The Rateable Valuation at the date of service of the notice to acquire the fee simple in 1998 was £211.50, having been adjusted upwards by the rating authority from time to time in order to take account of the various developments carried out. It is important to the present case to note that at the time of the granting of the said lease in 1945 the rent of £55 per annum, and the later adjusted rent of £75, exceeded easily the amount of the rateable valuation of the premises. It is safe to assume that the increase in the rateable valuation from time to time was a consequence of the tenant’s works and development of the premises that the rateable Valuation. This is relevant to the plaintiffs’ submissions, since one of the conditions which a tenant must satisfy in order to be entitled under the 1978 Act to acquire the fee simple is, as provided by s. 10(2) thereof, that “the yearly amount of the rent or the greatest rent reserved thereunder (whether redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of service under section 4 of the Act of 1967 of notice of intention to acquire the fee simple”.
In other words, it follows that a premises may slip quietly and by virtue only of a tenant’s own efforts by way of development (albeit ones to which the landlord gives his consent), from being one which is outside the statutory scheme of entitlement by which the tenant may acquire the fee simple from the landlord, to being a premises which falls within that statutory scheme. This is a point to which I shall return in due course.
…..
As I have already adverted to earlier, the plaintiffs contend that even if it has been shown, which of course they say it has not, that the impugned legislation pursues an identifiable social justice principle and that it can be shown to meet an exigency of the common good, it may still be found to be unconstitutional if the manner if its provisions exceed what is regarded as proportionate to the objective to be achieved. Another way in which this submission is put is to say that the legislation must interfere with the property rights of the citizen to the least extent required in order to achieve the desired objective. The argument is put also on a second footing also, namely that if the burden of the statute or the statutory scheme falls disproportionately heavily on a particular group of citizens, such as the group of landlords into which the plaintiffs fall. In this regard, Mr Fitzsimons has referred the Court to the case of Blake v. The Attorney General [1982] IR 117 – a case which found that certain provisions of the Rent Restriction Acts were unconstitutional, inter alia on the basis that certain provisions “constituted an unjust attack on the property rights of the plaintiffs contrary to Article 40, s.3, sub-s. of the Constitution since those provisions restricted the exercise of the property rights of one group of citizens for the benefit of another group without providing compensation for the first group, and in a manner which disregarded the financial capacity or needs of the members of the groups and which failed to limit the period of such restriction or to provide a method by which a landlord could have a rent reviewed.”
At page 139 of his judgment, O’Higgins CJ expressed himself as follows:
“In the opinion of the Court, the provisions of Part II of the Act of 1960 (as amended) restrict the property rights of one group of citizens for the benefit of another group. This is done without compensation and without regard to the financial capacity or the financial needs of either group, in legislation which provides no limitation on the period of restriction, gives no opportunity for review and allows no modification of the operation of the restriction. It is therefore both unfair and arbitrary. These provisions constitute an unjust attack on the property rights of landlords of controlled dwellings and are therefore contrary to the provisions of Article 43, s.3, sub-s. 2 of the Constitution.”
Mr Fitzsimons suggests that this reasoning is akin to the application of a proportionality test, and again states that the plaintiffs’ attack is not in relation to the application of the scheme to residential leases but to leases of business premises.
The plaintiffs refer also to the judgment of Hamilton CJ in In the Matter of Article 26 of the Employment Equality Bill [1997] 2 IR 321 where at p. 367 he stated:
“The Bill has the totally laudable aim of making provision for such of our fellow citizens as are disabled. Clearly it is in accordance with the principles of social justice that society should do this. But prima facie it would also appear to be just that society should bear the cost of doing it. It is important to distinguish between the proposed legislation and legislation to protect the health and safety of workers………But the difficulty with the section now under discussion is that it attempts to transfer the cost of solving one of society’s problems on to a particular group. The difficulty the Court finds with the section is not that it requires an employer to employ disabled people, but that it requires him to bear the cost of all special treatment or facilities which the disabled person may require to carry out the work unless the cost of the provision of such treatment or facilities would give rise to ‘undue hardship’ to the employer.”
Mr Fitzsimons refers to the fact that in that case the social principle in relation to assisting the disabled in society would have been clearly apparent from the legislation itself, but nevertheless the manner in which this was sought to be achieved bore down unfairly and therefore unjustly on another section of society, namely employers. In this regard reference is made to the fact that under the impugned scheme in the present case, the cost of transferring property from one prosperous commercial entity to another is borne by the landlord since, first of all, he/she is not receiving full value for his property under the scheme, by the way in which it is designed, and secondly that shortfall in value is not made good to the landlord by the general taxpayer/society at large. This is in contrast to the legislation of which Prof. Fahy gave evidence, such as the Land Purchase Acts where there was a scheme for the compulsory acquisition of property for which the tenant did not pay full market value, but the scheme allowed for that shortfall to be made good to the landlord by the public purse.
Mr Fitzsimons has submitted also that even if the Court were to be satisfied that the legislative scheme as a whole passed the tests of social justice, common good and proportionality, the Court should also scrutinise certain specific parts of the scheme namely the provisions contained in s. 10(2) of the 1978 Act, and s. 7 of the 1984 Act, both of which have already been set forth fully. He submits also that either or both of these sections are found to be unconstitutional, then the effect of such a finding must mean that the entire scheme impugned must fall also since they cannot be discretely severed from the overall scheme.
It will be recalled that in order to have entitlement to acquire the fees simple, the applicant must satisfy the requirements of s. 9 of that Act, and that one of the requirements of s. 9 is that one or other of the two alternative conditions contained in s. 10 must be met, and that in the Circuit Appeal herein I determined that the first named defendant met the condition contained in s. 10(2) of the Act which, by way of convenient reminder is as follows:
“” that the lease is for a term of not less than fifty years and the yearly amount of the rent or the greatest rent reserved thereunder (whether redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of service under section 4 of the Act of 1967 of notice of intention to acquire the fee simple, or the date of an application under Part III of this Act, as the case may be, and that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title; provided that it shall be presumed, until the contrary is proved, that the buildings were not so erected.”
In that regard I found that the landlord had not rebutted the presumption that the permanent buildings (all the permanent buildings, including Carrick House itself) had not been erected by the lessor. It is also the case that the lease in question was for a term of not less than fifty years, and also that at the date of the service of the s. 4 notice the rent was less than the amount of the then rateable valuation, even though at the time of the granting of the lease itself this was not the case. It will be recalled that the rateable valuation was gradually revised upwards solely as a result of development works by the tenant, some of which received retrospective consent from the landlord. These increases in valuation resulted in a premises creeping by chance, as it were, into the grasp of s. 10(2) of the Act.
Mr Fitzsimons refers to the fact that the 1978 Act altered the previously existing scheme in a number of ways. Firstly he recalled that in respect of an entitlement to a reversionary lease upon the expiry of a building lease, one of the eligibility criteria in the 1958 Act was as provided in s. 4(3)(a)(i) thereof, namely that the rent reserved by the lease was “less than three-fourths of the rateable valuation of the land thereby demised together with the buildings thereon, as first fixed or revised subsequent to the date of the lease pursuant to the Valuation (Ireland) Act, 1952, as amended and adapted, or (ii) in the case of a lease granted on or after the 1st day of January 1914 the rent reserved by the lease is less than that rateable valuation.”(emphasis added). Under the 1978 Act the appropriate date for the purpose of comparing the rent to the rateable valuation became the date of service of the notice to acquire the fee simple. In this way, as I have said, the premises were thus enabled to creep from being premises which would not have been caught by the scheme had the valuation been as of the date of the lease (or perhaps if there was provision for rent reviews by which the rent would have always be likely to have exceeded the rateable valuation). Mr Fitzsimons submits that there is no logical connection between a rent fixed in 1945 (or presumably the adjusted rent) and a rateable valuation fixed many years later, and no rationale has been put forward for this by the State. He makes the point also that the rent in question was not in fact a ground rent as such, but an occupational rent at the time, but has now become classified as one with the passage of time and as a result of the developments by the tenant. He says this is arbitrary, based on irrational considerations and unfair.
Mr Fitzsimons also submits that by linking the entitlement to acquire the fee simple to the rateable valuation, the legislature has effectively vested in the valuation authority the power to determine whether a person is or is not entitled to acquire the fee simple in property. Again he submits that this is arbitrary and unfair, and also points to the added fact that there is no entitlement on the landlord’s part to appeal against any revaluation of the premises which is made by the Commissioner. Other ways in which this link to rateable valuation offends, according to Mr Fitzsimons, are that no distinction is made between those landlords who received a capital sum as well as yearly rents and those who did not, and also that it fails to have regard to the fact that additions, extensions and improvements to the premises by the tenant are likely to cause an increase in the rateable valuation, but that the rent will remain the same, and in this regard he refers also to the legislative provision in s. 68 of the 1980 Act whereby a provision in a lease by which making an improvement was absolutely prohibited was to have effect as if it were a covenant prohibiting the making of an improvement without the consent of the landlord, and where there is a covenant against making improvements without the consent of the landlord, this was to be subject to the proviso that such consent could not be unreasonably withheld, thereby eliminating effectively the landlord’s right to withhold consent to an improvement which would have the capacity to cause a revaluation thereby bringing the premises within the compulsory acquisition scheme impugned herein.
But the plaintiffs, aside from pointing to these effects on them of the linkage of the purchase scheme to the rateable valuation of the premises, also point to a much more fundamental reason why the linkage is unfair and arbitrary, and that is their submission that the very way in which rateable valuations are fixed under that legislation is itself unfair, arbitrary, irrational and inconsistent, and that this further undermines the use of it as a means for determining an entitlement to acquire the fee simple in that it leads to different treatment of individuals dependent only on what part of this country the premises in question happen to be. This infringes principles of equality and non-discrimination in their submission. In this connection Mr Fitzsimons refers to and relies upon some of the evidence given by Mr McMillan as to how the valuation system operates, and it will be recalled from the summary of that evidence which I have already outlined that the Commissioner of Valuation operates a non-statutory formula for arriving at a rateable valuation, which appears to be dependent on a fraction of either .5 of 1% or .63 of 1% of net annual value, and that the only factor determining which fraction is used is the town in which the premises are located. That fraction of .63 of 1% was arrived at by reference to calculations based on an examination of rental values in Grafton Street, Dublin. It will be recalled also that Mr McMillan stated that in Ennis for example the fraction was .4 of 1% and that in all other places the fraction was .5 of 1%. He also stated that in as much as these fractions were linked back to an examination of rental values in places like Grafton Street and Henry Street in Dublin he could see no relevance of such an exercise to a location like Carrickmacross. Mr Fitzsimons emphasises the non-statutory nature of the study carried out by the Commissioner, and suggests that if perhaps some legislative provision authorised him to do so, some justification might be argued, but that is not the case. He points to the fact that the evidence of Mr McMillan as to how the system works remains uncontroverted, and that such a defective and unfair and irrational system for arriving at a rateable valuation has not become part of the qualifying mechanism for eligibility to purchase the fee simple from the plaintiffs and other similar landlords.
In relation to these submissions as to the inappropriateness of linking the scheme to the rateable valuation, Mr Fitzsimons has referred to the judgment of Barrington J. in Brennan v. The Attorney General [1983] ILRM. 449 in which the learned judge found the system then in place by which the rateable valuation of agricultural was fixed was, inter alia, obsolete and contravened the constitutional guarantee of basic fairness of procedures, as well as being an unjust attack on the plaintiffs’ property rights, and, in addition, delimited the plaintiffs’ property rights in a manner either inconsistent with the principles of social justice, or in a manner which was not required by the exigencies if the common good. Mr Fitzsimons referred the Court to a passage from that judgment appearing at p. 486 as follows:
“If the Oireachtas were today to introduce legislation providing for the valuation of the lands of Ireland, such legislation would enjoy the benefit of the presumption of constitutionality. But if such legislation were to provide that the lands of Ireland were to be valued by reference to crops grown, and the scale of agricultural prices obtained in the years 1849-1852, such provision would be so eccentric and ludicrous that the courts would have, I suggest, no difficulty in holding that it failed to respect the property rights of individual farmers. Yet it is the continuing effect of the 1852 Act and of amending legislation.”
Secondly, it is submitted that the Act altered the nature of the presumption referred to. The 1958 Act contained a presumption in s. 4 thereof in relation to a building lease, to the effect that where it is shown that the buildings were erected by the lessee it shall be presumed, where there is no express evidence of an agreement that upon the erection of the permanent buildings that a building lease would be granted, that there was such an agreement and that the buildings were erected in pursuance thereof. In the case of s. 10(2) however this has been extended in the manner appearing. The 1978 Act, in s. 10(2) thereof, as has been seen, created a presumption against the landlord which the plaintiffs submit is even more onerous against them, namely that unless the contrary is proved, it is to be presumed that the permanent buildings were not erected by the landlord or his predecessors in title. Again it is submitted that this is an unfair and unduly onerous burden to overcome, and Mr Fitzsimons has referred to the manner in which I referred to this presumption in my earlier judgment. He points also to the fact that the presumption is very specific as to requiring the landlord to prove that he erected the buildings, and not simply that the landlord provided the buildings or made them available to the lessee, and in this regard he refers to the fact that there was evidence in the Circuit Appeal from which it could easily be inferred that the landlord had provided the building at the time which was Carrick House, irrespective of who actually constructed same originally. Certainly it might have been possible to conclude from the evidence adduced by the plaintiffs that it was, as a matter of probability, the landlord rather than any lessee who erected Carrick House, but that was in my view an insufficient level of proof given the way in which the presumption is couched in the section. Mr Fitzsimons submits that this presumption is also disproportionate to any objective of the legislation. He submits that the Oireachtas could not have intended to deprive a landlord of premises which he himself had provided to the lessee, and that the presumption is therefore arbitrary and punitive, in as much as it appropriates to a lessee, and without proper compensation to the landlord, a benefit which that lessee does not deserve.
In relation to the presumption the plaintiffs also argue that it fails to take into account the difficulties which can be faced by owners of freehold in rebutting such a presumption, since records simply may not exist. They further argue that this presumption has a retrospective effect and that this makes the situation even worse, since it is only after the presumption is introduced that a landlord comes to realise that records as to the construction of the premises are required to be kept.
Section 7 of the 1984 Act:
The plaintiffs submit that this section is a key provision in the overall scheme, since without it, the scheme would effect an expropriation of property without any compensation whatsoever, and that it therefore must be viewed as a compensation provision, but that simply because it may be a compensation provision does not of itself validate the statute constitutionally. The scheme must nevertheless accord with social justice principles and the exigencies of the common good. But they also submit that the scheme must make provision not just for compensation, but for adequate compensation, and that the present scheme under section 7 fails in this regard. Mr Fitzsimons submits that what is required is reasonable compensation and that this would equate to full market value, and he refers again in this regard to the scheme which existed under the 1919 Act to which reference was made earlier in the evidence of Prof. Fahy.
The plaintiffs rely on the judgment of the Supreme Court in Re Article 26 of the Constitution and in the matter of Part V of the Planning and Development Bill, 1999 [2000] 2 IR 321 where the constitutionality of the provisions which required developers to transfer to the local housing authority up to 20% of the land for which planning permission was being sought in exchange for compensation at the level of agricultural value rather than its development value, was upheld on the basis, inter alia, that there was already a windfall effect in relation to the retained land by virtue of the granting of the planning permission. Mr Fitzsimons relied on a passage in the judgment of the Court at p. 350 thereof as follows:
“…it is important to bear in mind that, where the property of the citizen is compulsorily acquired by the State or one of its agencies for what are deemed by the legislature to be important social objectives, it has in general been recognised that he or she is entitled to at least the market value of the property so taken as constituting fair compensation for the invasion of his property rights. However, that this generally recognised right, though unquestionably of importance, is not absolute was made clear in two decisions of this court [Dreher v. Irish Land Commission, and O’Callaghan v. Commissioners of Public Works]……….There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property. As Walsh J. in Dreher v. Irish Land Commission [1984] I.L.R.M. 94 pointed out, even that may not be a sufficient measure of compensation in some cases………”
As I have already stated, the Court in that case dealt with the matter on the basis that the landowner was in any event receiving a windfall from the permission affecting the retained land, and regarded the provisions under review as meeting the compensation requirement, and Mr Fitzsimons submits that there is no evidence of any social policy objective which would justify the fixing of compensation at less than market value, as is the result of the impugned provisions in s. 7., and that the evidence has established that this will happen to the plaintiffs and owners like them, since even on the lowest market value namely that given by Mr Freeman on the basis of a reversionary lease, the figure is €61,500, whereas the Court found that the price under s. 7 of the Act is only €30,000 – less than half, and that this alone is an unjust attack, and enough to rebut the presumption of constitutionality of the section.
The plaintiffs submit that the s. 7 scheme is disproportionate and that the Oireachtas could easily have provided that an owner from whom property was being acquired under the statutory scheme should receive the market value of the property, the same to be fixed on the recognised basis taking into account all relevant factors. This would not offend, in their submission, since it would not be arbitrary, irrational and disproportionate.
Finally, the plaintiffs set out both in their oral submissions and written submissions seven reasons why s. 7 of the 1978 Act is in their view arbitrary, irrational and disproportionate:
· There is no requirement under s. 7(3) that any addition to value deriving from contemplation of redevelopment be taken into account in determining the purchase price of the fee simple, and that this appears to be a deliberate omission given the provisions of s. 7(4) and s. 7(9) of the Act.
· The provision that the purchase price shall in cases to which this provision applies (including to the first named defendant) be “a sum equal to one eighth of the amount which, at that date, a willing purchaser would pay and a willing vendor would accept for the land in fee simple”, since there is no evidence given of any logical or rational explanation for the particular fraction used, and that in so far as it may be referable or explained by the provisions of s. 35 of the 1980 Act providing that the rent under a reversionary lease should be fixed at one eighth of the gross rent, it cannot be justified by reference thereto, since there is no association between the two provisions, and it is therefore arbitrary and irrational.
· Certain provisions provide for deductions in the value prior to the further reduction to one eighth of the value, and these deductions all favour the lessee and take no account of the fact that works carried out on the premises may have required the consent of the landlord, and the provisions take no account of the fact that these works may have resulted in the rateable valuation of the premises being increased to a level that thereby gives the lessee an entitlement to acquire the fee simple.
· The exclusion under s.7(4) from the computation of the purchase price of any addition to value deriving from contemplated development of the premises, and that this fails to have regard to the entitlement of the landlord under s. 59 of the 1980 Act whereby the lessor can recover possession at the expiration of the lease if he or she has their own scheme of development for the premises, thereby depriving the lessee of an otherwise entitlement to a reversionary lease. This results in a situation where a lessee who might otherwise have been deprived of his interest in the premises receives the entirety of the redevelopment value of the property at no cost whatsoever. This amounts to expropriation from for example the plaintiffs herein and with no compensation, that part of the value of the premises which can be attributed to development potential.
· The provision in s. 7(9) of the Act, whereby in respect of leases with less than fifteen years to run (i.e. the lease of the first named defendant and the lease under which the Bank of Ireland hold premises from the plaintiffs) an application to acquire the fee simple is made, say, when there is fourteen years to run, the provisions as to price are to apply as if the lease had already expired, and that even in such a situation any addition to value deriving from development potential is excluded in assessing the price.
The plaintiffs submit that these examples demonstrate that in terms of impairing the plaintiffs’ property rights to the least extent necessary for the achievement of any demonstrated constitutionally permissible objective, s. 7 of the 1978 Act goes too far, and that it is arbitrary, irrational and disproportionate, and could easily have been drafted in a manner which was proportionate, thereby affecting the rights of the plaintiffs to a lesser extent.
Donal O’Donnell SC on behalf of the second named defendants (“the State) has submitted that the plaintiffs are incorrect in the way that they have characterised the evidence and the legislative scheme, and that when looked at in what he submits is the appropriate way, the matters of which the plaintiffs complain do not amount to an unconstitutional regime for the acquisition of fee simple interests by persons such as the first named defendant. He accepts that the State is obliged to defend and vindicate the constitutional rights of the citizen, and that the impugned legislation involves ultimately the acquisition of the landlord’s interest in property. He accepts also as a general principle that for such provisions to be constitutionally sound there must be a proper object in view i.e. a social justice principle. He also accepts that such a regime should provide fair and adequate compensation, but that there can be circumstances where such compensation might not necessarily be full market value compensation, and in this regard he refers to the case of Dreher v. Irish Land Commission to which reference has already been made, as well as the O’Callaghan case.
But what he described as the State’s “principal ground” of defence in these proceedings is that the impugned legislative regime does permit the acquisition of the landlord’s interest and does in fact provide a fair and adequate form of compensation for that acquisition. As a fall-back argument in this regard he submits that even if he is wrong that the scheme provides fair and adequate compensation, it is not necessary that such compensation be precisely in line with market values. Mr O’Donnell submits that it is important to analyse and examine what exactly it is that is being acquired from the landlord under the scheme. He submits that the landlord’s interest which is being acquired is not the land itself but an interest in the land – the fee simple interest, and he describes this as being a limited interest following upon the landlord’s decision at an earlier stage to grant a leasehold interest to a lessee, and that such a decision has consequences for the landlord, such as the consequence that at the end of a term of years the lessee is likely to enjoy an entitlement to a reversionary lease, which prevents the landlord effectively from ever regaining possession of the property. That entitlement to a reversionary lease has an effect on the value of the limited interest of the landlord thereafter, which Mr O’Donnell characterises as an entitlement to an income stream from the property, and severely constrains what the landlord may do with the property and his interest therein.
He refers in this regard to the evidence given by Mr O’Cleirigh that the open market value of such an interest is poor, and that the days when such an interest was an attractive investment are over given the arrival of inflation, and his evidence also that in fact the price-fixing mechanism under the impugned scheme produces, because it operates on an assumption that there is a willing vendor and willing purchaser, a price which in his opinion was ahead of the market value. He refers also to what is stated by Keane J. (as he then was) in Irish Life Assurance Company v. Dublin Land Securities [1986] I.R. 332 in relation to ground rent values and the difficulties surrounding the sale of them. I do not propose setting out the learned judge’s remarks in detail, but merely refer to the fact that Mr O’Donnell has submitted that what is stated is consistent with the views expressed by Mr O’Cleirigh.
He also refers to some of the evidence given by Prof. Wylie as to the nature of the various estates and interests in land tenure.
Mr O’Donnell submits that the problem is not so much with the details of the scheme itself but with the underlying value of the interest in the property retained by the landlord after having decided to grant a leasehold interest to somebody else.
Mr O’Donnell submits also that the fact that the leasehold interest in the property may have increased greatly for any reason and enures to the benefit of the tenant is not something of which the landlord can be seen to complain, and that the fact that some other person may be enriched cannot be classified as an attack on the property rights of somebody else who receives the value of the interest which they have. Mr O’Donnell has pointed to the fact that since 1931 a scheme of lease renewal has been in place which eroded the landlord’s right to possession at the end of the term, and that such a scheme has always been permissible, and he suggests that it was always in line with a social policy, and that one cannot equate the landlord’s interest after he has granted a lease, as being in any way the equivalent of a fee simple in possession, and therefore in value terms the two are very different.
Mr O’Donnell submits that the plaintiffs’ have not been specific as to what particular provisions of the statutory scheme they suggest are unconstitutional, even though he accepts that s.10(2) of the 1984 Act and s. 7 of the 1978 Act are specifically referred to as part of the plaintiffs’ challenge. He submits that these provisions are part of an overall scheme, and that in his view it is difficult to complain about those specific provisions to which I have referred, when the remainder of the scheme is left intact. He characterises the plaintiffs’ challenge as an outright attack on the entire scheme.
In as much as the plaintiffs appear to be challenging the scheme only in as much as it refers to business leases, Mr O’Donnell submits that this is of no importance or relevance since the legislation impugned makes no real distinction between the two in the way in which it defines a qualifying lease for the purpose of the acquisition scheme. He submits, and refers to the evidence of Prof. Wylie in this regard, that the social policy justification refers to both types of lease equally without any distinction, and he refers to the social injustice to any tenant under a qualifying lease that at the end of the term the premises had to revert to the landlord. He also referred to Prof. Wylie’s evidence regarding the policy objective of tidying up the system of conveyancing in the State by the elimination of what were referred to as “pyramid titles” and that this applied also to both types of lease in equal measure. He referred also to the desirable objective of ridding lessee’s of old premises of the need to apply for landlord’s consent to alter the premises which may have great value to the tenant, and that this is an uneconomical way of arranging matters of this kind, so that some person whose interest in the premises is confined to perhaps receiving a small rent can nevertheless control in this way what happens at a premises, those premises perhaps being of very substantial value.
Mr O’Donnell also submits that the plaintiffs cannot, as he suggests that they have sought to do, make a distinction between what he called “poor people in dwelling homes and rich people in business premises”. He submits that there are homes which may on account of their location have very high values, and in contrast there can be small shopkeepers in business premises which are low in value, and that the distinction for the purpose of this challenge simply cannot be made, and furthermore that the legislative scheme makes no such distinction, and there can be no element of means-testing to the scheme.
Mr O’Donnell states that it is significant that the limit of the plaintiffs’ challenge is back only as far as the 1967 Act and not back to the 1931 Act, and that the challenge at its broadest is to the right to acquire the freehold, and that there is no challenge to the right of a lessee under a building lease to a reversionary lease of 99 years at one eighth of the gross rental value. He suggests that the reason for this limitation to the challenge is that everybody would be agreed that there would be a significant social injustice if a tenant was not entitled to a reversionary lease where he/she held under a building lease and at the end of the term the land was to return to the landlord.
He accepts, however, that there is some of the evidence given by Mr McDowell which would suggest that Mr McDowell would not agree that there was such an injustice to that situation, on the basis that in such a situation the lessee would have entered such a transaction with his eyes open and realising that at the end of the term he would be obliged to return all the property, including buildings erected by him, to the landlord, and that a businessman in such a situation would have made his decision to take such a lease in the belief that during the term of the lease he would be able to recoup his cost of building the premises, and that therefore he would be at no loss if at the end of the term he was obliged to return the property in its entirety to the landlord. Mr O’Donnell suggests that such an approach, being one from the perspective purely of economics, would be seen as working an injustice on the lessee from a constitutional rights perspective, and the very situation which the legislature sought to address in its various legislative interventions beginning with the 1931 Act, – an Act, as already stated, which is not under challenge in these proceedings.
In relation to the argument that a landlord in the position of the plaintiffs at some stage in the past made a decision to restrict his interest in the property to an income stream argument by means of a fixed rent, and without any obligations to repair and maintain, Mr O’Donnell submits that the legislative scheme recognises that reality by means of the fraction mechanism based on market value, firstly in the 1931 Act by means of a rent fixed at one eighth of the gross rent, and later in the context of acquisition by means of value or price arrived at by reference to the provisions of s. 7 of the 1984 Act Act, including the fraction mechanism, which has been adjusted from time to time and is now at one eighth. Mr O’Donnell submits an explanation or justification of this fraction mechanism in the following way.
It is submitted that the price mechanism challenge only kicks in so to speak if the whole question of acquisition itself has passed the constitutional test of meeting a social justice principle and the exigencies of the common good. Therefore the mechanism where by that is achieved must be looked at in the context where the idea of acquisition itself is acceptable. In that connection, Mr O’Donnell has submitted that there must be a reasonable margin of appreciation or discretion given to the legislature as to how this is achieved, and provided a reasonable balance is struck between the competing rights and interests, the Court should not feel obliged to condemn the scheme, even if in certain cases an anomaly is shown to exist or certain people affected feel hard done by in particular situations, and that this is bound to happen in any scheme of general application.
As far as the fraction of one eighth itself is concerned, Mr O’Donnell refers to the fact that it is linked to the previous reference to the same fraction of one eighth set forth in the 1980 Act in relation to the reversionary lease rent calculation, so it is not something simply picked out of the air in some irrational way. He explains it by stating that the objective is to provide the landlord with the income stream to which his fee simple interest entitles him to receive during the term of the lease, and that this figure remains unchanged even though the value of the entirety of the land rises. In this way the proportion of that value which any capitalised valuation of the rent represents decreases so long as value of the property rises. He submits that this is a perfectly reasonable rationale for the fact that over the years since the introduction of the scheme the level of the fraction used to arrive at a valuation of the landlord’s interest has reduced from one quarter, to one sixth and now to one eighth, and that if that were not so, the landlord would end up with a price which represented the relationship of a higher rent than that reserved with overall value of the property. That in his submission would work an injustice in the other direction. He submits that the Oireachtas is entitled to deal with the matter in this way so as to achieve a balanced and fair result to all parties. He also refers to the evidence of Mr O’Cleirigh in this regard who gave it as his view that such a method of valuation was clear, fair ands reasonable. I have already summarised his evidence earlier.
The State contends that it is a matter for the Oireachtas to determine social justice principles and what does or does not accord with the exigencies of the common good. Mr O’Donnell urges that this Court cannot substitute its own views in that regard for the views of the Oireachtas, and that only if the Court was of the view that the view formed by the Oireachtas was so arbitrary, and so unjust that it could not be consistent with the Constitution, that the Court should interfere.
Mr O’Donnell has referred also to the fact that the Oireachtas has dealt with legislation of this kind on a large number of occasions, referring to the Acts of 1931, 1958, 1967, 1974, 1980, 1984, 1990 and now very recently in 2005, and he refers also to Prof. Wylie’s evidence that further reform of the law in this area is under consideration. He submits that the Oireachtas has recognised on these various occasions a social justice principle, and that it is necessary in the interests of the common good to bring in these pieces of legislation so as to adjust the scheme as it has thought fit from time to time. He has also referred to the historical background to land tenure in this country going back many hundreds of years and, in that context, to the origin of the ownership by landlords of estates here such as that of the plaintiffs, granted to the 1st Earl of Essex in the middle of the sixteenth century, part of which reached the Shirley family in the 17th century through inheritance. He submits that this is part of the background to the 1937 Constitution and to the inclusion therein of provisions permitting the delimitation of property rights. He refers to the fact that at the time of that Constitution there was already in progress as a result of Land Purchase legislation a system of land redistribution, and referred also to Prof. Wylie’s evidence that one of the underlying objectives of the legislation was a desire to place in Irish hands land which had been granted a long time previously to a small group of landlords. He submits therefore that a procedure for the acquisition of land interests is one which is constitutionally permissible so long as it is fair.
As part of his submissions Mr O’Donnell has referred also to the contents of the Meredith Report in 1928, and which led to the passing of the 1931 Act. He submits that there is evidence therein of the difficulties perceived to exist for tenants under the common law, and what steps were recommended to be introduced to remedy the situation as it was seen to be at that time, in relation to rights to renew, how fair rents would be fixed, how account should be taken of buildings and improvements made by the lessee and other relevant matters. I do not propose setting out in detail all the passages from the Commission’s Report to which the Court was referred. Reference was also made to a work by the late Mr Justice Kingsmill Moore on the Law of Landlord and Tenant, which was published after the passing of the 1931 Act, and to certain passages therein which made reference to what was regarded as the uneven bargaining position between landlords and tenants both at the commencement of a tenancy and at the end thereof. Again I do not propose to do more than just refer to the fact that Mr O’Donnell has referred to same for support for his submission that the legislature decided that it was necessary to introduce measures to deal with the position of tenants vis-a- vis landlords which was seen as favouring landlords at that time, as a result of the way in which matters were regarded and dealt with by reference to the common law. Mr O’Donnell submits also that what the plaintiffs are trying to achieve by the present proceedings is something which the legislation from 1931 onwards was designed to prevent, a situation where the landlord would gain the benefit of the increase in value of the property which had occurred during the term of the lease, albeit that there was provision for a landlord to resist an application to renew the lease if he a bona fide scheme of development in mind for the property. In this latter regard, Mr O’Donnell submits that that was something which the Oireachtas was entitled to change in due course if it was of the view that there was an injustice to the tenant. The fact that this and other matters were addressed by the Oireachtas in the 1958 Act is part of the ongoing development of the law in that area in the light of experience of how the scheme operated over time.
As another example Mr O’Donnell referred to the introduction of a rebuttable presumption in favour of the lessee as to the erection of buildings. But he points out also that the presumption only becomes of any relevance once other conditions are fulfilled, such as that the lease is for not less than fifty years, and that the rent is not more than a certain fraction of the rateable valuation. He submits that there is nothing unfair or unconstitutional about a measure which addresses in favour of the lessee a situation in which that lessee is at a distinct disadvantage in relation to the establishment of a matter essential to eligibility or entitlement to acquire the landlord’s interest in the property. He refers also to the fact that the presumption contained in the 1978 Act is not materially different to that which was introduced in the 1958 Act. He submits also that the use of the length of the lease and the use of the relationship which the rent bears to the level of the rateable valuation is simply a rule of thumb, so to speak, or means of arriving at the probability that the lease is a building lease and therefore that it is a ground rent, and it is submitted that there is nothing unfair in using these criteria for that purpose.
He accepts that the date at which the rateable valuation must be looked at for the purpose of comparison with the rent is altered by the 1978 Act so that the relevant rateable valuation is that applying at the date of service of the notice, rather than being the valuation “as first fixed or revised subsequent to the date of the lease pursuant to the Valuation (Ireland) Act, 1852, as amended and adapted”, as had been provided in s.4(3)(a) of the 1958 Act, and he acknowledges that this change is an important matter in respect of which complaint is made by the plaintiffs. But he contends also for a possible interpretation of that provision of the 1958 Act which is wider than the meaning suggested by Mr Fitzsimons. He submits that the words “first fixed or revised subsequent to the date of the lease” does not necessarily fix the valuation to that existing only at the date of the lease, because it refers also to “revised”. In other words, it seems to be suggested that the adjective “first” attaches only to the word “fixed and that the word “revised” stands alone, rather than being interpreted as “first revised”. If Mr O’Donnell is correct about that, then there seems to be little if any distinction between the provision in the 1958 Act and the later provision contained in s. 10(2) of the 1984 Act referring to the date of service of the notice to acquire, since the word “revised” would cover any revision of the rateable valuation up to that date. But even if he is wrong about that, he is of the view that there is nothing impermissible about looking at the date of valuation as of the date of service of the notice, and he has referred to the evidence of Mr O’Cleirigh in that regard who stated that in almost every case where a person is found to be eligible under s. 10(1) of the 1978 Act (the permanent buildings were erected by the lessee) the rent is found to be less that the rateable valuation, and that therefore the mechanism used is a fair indicator of the position in that regard, and he refers also of course that the landlord is entitled to put forward proof that the lessor in fact erected the premises, in which case there is no entitlement in the first place.
Mr O’Donnell also refers to s. 16 of the 1978 Act which in effect provides that the general right to acquire the fee simple interest does not apply to a person who has been declared not to be entitled to a reversionary lease because the landlord has a bona fide intention to redevelop the property, and that the landlord enjoys this protection. He refers also to the provisions of s. 30(2) of the 1980 Act which provides that a person who would be entitled to acquire the fee simple interest in the property under s. 9 of the 1978 Act is entitled to apply for a reversionary lease. He draws attention to the fact that this is a reversal of the previous situation where under the 1978 Act a lessee who would have been entitled to a reversionary lease was entitled to acquire the fees simple, whereas under this new provision a person entitled to acquire the fee simple, was entitled to apply for a reversionary lease.
In relation to the plaintiffs’ complaints relating to the price-fixing mechanism contained in s. 7(4) of the 1984 Act, namely the price by reference to one eighth of market value less deductions for tenant’s goodwill and the special allowance (i.e. tenant’s works which add to the letting value other than repairs and maintenance), and excluding any development value, Mr O’Donnell firstly refers to the distinction between the mechanism contained in s. 7(3) of the Act and that referred to in s. 7(4) thereof. The former makes a general provision that the price shall be the market value but taking into consideration the various matters set forth in paragraphs (a) to (j) thereof, such as the rent or any increase thereof payable, the interest yields on Government securities, the nature and location of the land, the price which has been paid for the fee simple in any sale thereof on or after the 22nd May 1964 (this having been the date of the Ground Rents Commission’s Report prior to the passing of the 1967 Act), and other matters set forth therein. However, the following subsection (4) provides that where the lease has expired a different mechanism is to apply and which has been applied in the present case. Mr O’Donnell has submitted that if the plaintiffs’ argument was to have weight they would have to have adduced evidence that the price, if fixed under s. 7(3) rather than s. 7(4) would have produced a higher figure, and that there is none such adduced, and again he has referred to Mr O’Cleirigh’s evidence that the market value of ground rents is very low, and that in fact s.7(4) produces a higher sum for the landlord than could be fixed under s. 7(3). For that reason, Mr O’Donnell submits that the plaintiffs are wrong in the manner in which they characterise the mechanism for price fixing under the latter subsection as in some way draconian or penal to landlords, and rather that it is a provision which recognises in the landlord’s favour a situation where the tenant has allowed the lease to expire and that the landlord may have had an expectation or hope that at the expiry he may get back the property, and that in such circumstances it may be appropriate that the landlord receives a somewhat larger consideration from the tenant than would otherwise have been fixed by s.7(3) of the Act. He submits that s. 7(3) must clearly be a constitutional provision since it specifically refers to the landlord receiving market value, and that if subsection (4) is to be impugned there would have to be evidence that subsection (4) works an unfairness, and he submits that the plaintiffs have not demonstrated this or even attempted to do so. He submits that the Oireachtas can be seen to have engaged in a careful balancing exercise in relation to the competing interests of both the landlord and the tenant in the manner in which the legislation has been worded. He also submits that the case of Hempenstall v. The Minister for the Environment [1994] 2 I.R. 20 is relevant to matters raised in these proceedings, since in that case, which dealt with property right in relation to taxi licences, it was held, inter alia, by Costello J. (as he then was) at p. 28:
“…an amendment of the law which by changing the conditions under which a licence is held, reduces the commercial value of the licence cannot be regarded as an attack on the property right in the licence – it is a consequence of the implied condition which is an inherent part of the property right in the licence.”
Mr O’Donnell submits that this would apply equally to the provisions for reversionary leases introduced in 1931 which may have affected greatly the value of the landlord’s interest in the property, but that it is a perfectly valid delimitation of rights in accordance with what is regarded as a social justice principle, and is not an unjust attack. He has referred also to Dreher v. The Irish Land Commission [1984) ILRM 94 in which Walsh J. found that the system of payment to land owners whose land was being acquired compulsorily by the Land Commission, and in which the consideration was paid by means of a transfer of land bonds equal in nominal value to the price fixed, was not unconstitutional even though by the time the vendor was entitled to encash the bonds so transferred the value had reduced from that nominal value and even from the actual value therein as at the date of transfer. The price had been fixed at £30,000, and he received a transfer of bonds of a nominal value of £30,000, yet by the time he was entitled to encash these bonds they had a realisable value on the day of transfer of only £29,400. The scheme was found to be constitutional on the basis that the Minister for Finance had not failed to ensure as far as he could to ensure that the market value of the bonds remained as near par as possible, and that simply because a person was entitled to just compensation that did not mean that he was entitled to market value. In fact the learned judge went on to say that there could be circumstances where just compensation could be either less or greater than market value. However, Mr O’Donnell’s central submission in relation to compensation in the present case, is that the landlord actually receives the market value or even more than market value, of his interest – the fee simple interest – in his property under the impugned scheme. His fall-back submission, if you like, is that even if the price fixed by the Court is less, it is fair and that the scheme which so provides and under which the price was fixed, is a fair and reasonable attempt by the legislature to provide a method of calculation of market value or compensation which takes account of the various competing interests and considerations.
James v. United Kingdom 8 EHRR 123:
This is a case to which it is relevant to have regard. It is a case in which issues similar, although not identical of course, were raised in the European Court of Human Rights arising out of the Leasehold Reform Act, 1967 in the United Kingdom under which certain tenants were entitled to acquire the freehold interest from their landlord. The head-note of the reported judgment of that court recites, inter alia, the fact that:
” …[the landlords] complained that the compulsory transfer of these properties and the calculation of the price received for this transfer amounted to a breach of Article 1 of Protocol No.1; that the circumstances of the transfer were discriminatory in breach of Article 14 of the Convention and that the absence of any appeal system violated Article 13…”
I should immediately refer to the fact that Mr Fitzsimons has drawn the Court’s attention to the fact that the properties at issue in this case were residential only, and did not relate to business premises, and he submits that this is a fundamental difference between that case and the plaintiffs’ case, although the plaintiffs wish to rely on some aspects of the judgment themselves. He also refers in that regard to the evidence given by Prof. Wylie on behalf of the second and third named defendants that the current law of landlord and tenant has moved well beyond building and proprietary leases, and the need to ensure that the tenant is not disadvantaged in his relations with the landlord.
Article 1 of Protocol 1 of the Convention provides:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of the State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
The wording of this provision is different to that in Article 43 of the Constitution, but the principle that the exercise of property rights may be regulated to meet the exigencies of the common good is apparent, and as is pointed out in the judgment in James, this must include meeting a social justice principle and the measures adopted by a State must be proportionate. For all practical purposes, there is no distinction, and for that reason, albeit allowing for the fact that the case related only to residential property, the Court’s judgment is clearly one which is relevant to have regard to in the light of the requirement upon Courts in that respect contained in s. 4 of the European Convention on Human Rights Act, 2003.
Mr O’Donnell referred to a number of conclusions arrived at by that Court in James:
1. Compulsory transfer of property from one individual to another may constitute a legitimate means for promoting the public interest, and that the taking of property effected pursuant to legitimate social, economic or other policies may be in the public interest even if the community at large has no direct use or enjoyment of the property taken.
2. The Court will respect a national legislature’s judgment when implementing social and economic policies unless that judgment is manifestly without reasonable foundation, and that the elimination of social injustice by leasehold reform legislation was a legitimate aim for the State to pursue and could not be characterised as manifestly unreasonable, and fell with the State’s margin of appreciation.
3. A measure depriving a person of his property must be appropriate for achieving its aim and not disproportionate thereto, but does not have to meet a test of strict necessity, and that provided that the means chosen could be regarded as reasonable and suited to achieving a legitimate aim and a fair balance the Court would not question the Court’s judgment of the best solution.
4. The taking of property without compensation reasonably related to its value would normally constitute a disproportionate interference which was not justifiable, although this did not give an entitlement to full compensation in all circumstances, and that in determining the level of compensation a State has a wide margin of appreciation to afford a fair balance between the interests of the parties, the general interest of society, and the landlord’s right of property.
5. It was not unreasonable for the legislature to determine that landlords generally should be deprived of the enrichment which would otherwise ensue on reversion of property, even if in a number of cases so-called undeserving tenants thereby benefited, and that in the case in question the operation and scale of the legislation in practice and the scale of anomalies under it did not render it unacceptable under Article 1, nor did it place an excessive burden on the applicants over and above the disadvantageous effects for landlords generally.
I have set out the above by means of a summary only of some conclusions reached by the Court in James. The judgment of the Court deals in more detail with each of these matters and others, but there is no need to set out the terms of the judgment in more detail at the moment. Mr O’Donnell relies on much of this judgment in support of his submissions, and points to the great similarity of these conclusions to principles which can be found in our existing jurisprudence to which the Court has been referred, such as Tuohy v. Courtney; Dreher v. Irish Land Commission; Heaney v. Ireland and so forth.
Mr O’Donnell referred to a number of specific passages from the judgment itself. I will not refer to all of these, but to some. For example he referred to a passage at p.142 of the Court’s judgment of the relating to the concept of what measures might be regarded as being in the public interest. That passage is as follows:
” (a) Margin of appreciation:
Because of their direct knowledge of their society and its needs, the national authorities are in principle better placed than the international judge to appreciate what is ‘in the public interest’. Under the system of protection established by the Convention, it is thus for the national authorities to make the initial assessment both of the existence of a problem of public concern warranting measures of deprivation of property and of the remedial action to be taken. Here, as in other fields to which the safeguards of the Convention extend, the national authorities accordingly enjoy a certain margin of appreciation.
Furthermore the notion of ‘public interest’ is necessarily extensive. In particular, as the Commission noted, the decision to enact laws expropriating property will commonly involve consideration of political, economic and social issues on which opinions within a democratic society may reasonably differ widely. The Court finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment is manifestly without reasonable foundation.…..”
In dealing with the landlord’s submission that in enacting the English Act of 1967 the government of the day was not doing so for the public benefit but rather for some purely political vote-seeking purpose, the Court stated:
“The Court notes, however, that leasehold reform in England and Wales had been a matter for public concern for almost a century and that, when the 1967 Act was passed, enfranchisement was accepted as a principle by all the major political parties, although they expressed different views as to how it should be implemented. It was not disputed by the applicants that the main criticisms now made by them of the substantive provisions of the legislation were voiced at the time and fully debated in Parliament before being rejected. The Court does not find that such political considerations as may have influenced the legislative process, socio-economic legislation being bound to reflect political attitudes to a greater or lesser extent, precluded the objective pursued by the 1967 Act from being a legitimate one in the public interest.”
The Court went on at p.144 to consider if the Court should look at the justifications for the legislation put forward by the government, and stated in that regard:
“…the Court has jurisdiction to inquire into the factual basis of the justification pleaded by the respondent government. That review, however, is limited to determining whether the legislature’s assessment of the relevant social and economic conditions came within the State’s margin of appreciation………The applicants’ views cannot be qualified as groundless. Nonetheless, there is sufficient evidence to justify the contrary views. In a building lease the original tenant will have built the house, in a premium lease he will have paid an initial capital sum which typically tool account of the building cost, and in both kinds of lease the tenant will have been responsible for all running repairs. This means that the long established tenant and his predecessors will over the years have invested a considerable amount of money in the house which is their home, whereas the landlord will normally have made no contribution towards its maintenance subsequent to the granting of the lease……… the United Kingdom Parliament’s belief in the existence of a social injustice was not such as could be characterised as manifestly unreasonable.”
This Court was referred also to a passage at p.145 as follows:
“According to the applicants, the security of tenure that tenants already had under the law in force provided an adequate response and the draconian nature of the means divided to give effect to the alleged moral entitlement, namely deprivation of property, went too far………It is, so the applicants argued, only if there was no other less drastic remedy for the perceived injustice that the extreme remedy of expropriation could satisfy the requirements of Article 1.
This amounts to reading a test of strict necessity into the Article, an interpretation which the Court does not find warranted. The availability of alternative solutions does not in itself render the leasehold reform legislation unjustified; it constitutes one factor, along with others, relevant for determining whether the means chosen could be regarded as reasonable and suited to achieving the legitimate aim being pursued, having regard to the need to strike a fair balance. Provided the legislature remained within these bounds, it is not for the Court to say whether the legislation represented the best solution for dealing with the problem or whether the legislative discretion should have been exercised in another way.
The occupying leaseholder was considered by Parliament to have a ‘moral entitlement’ to ownership of the house, of which inadequate account was taken under the existing law. The concern of the legislature was not simply to regulate more fairly the relationship of landlord and tenant but to right a perceived injustice that went to the very issue of ownership. Allowing a mechanism for the compulsory transfer of the freehold interest in the house and the land to the tenant, with financial compensation to the landlord cannot in itself be qualified in the circumstances as an inappropriate or disproportionate method for readjusting the law so as to meet that concern.”
The reference to the ‘moral entitlement’ to which the tenant was thought by Parliament to enjoy, is a reference to the 1966 White Paper published by the British government prior to the passing of the Act of 1967 there, and in which the government of the day set forth its proposals for reform in this area. That White Paper, as described in the Court’s judgment, set forth the government’s purpose, and it was clear for all to see. In the present case, Mr Fitzsimons has referred to the fact there is no such exposition of the government’s purpose in enacting the impugned statutory scheme, and that the Court must therefore have regard to what, if any, evidence has been adduced in that regard in these proceedings, and he suggests that there is no social justice principle disclosed in any of the evidence put up by the defendants which shows any justifiable social justice principle, or that, if even such a principle has been shown to exist, the exigencies of the common good require the particular measures adopted. Mr O’Donnell submits however in that regard that the Court can look, inter alia, to the 1926 Meredith Report, the 1964 Report of the Ground Rents Commission, the context of the historical background to, and the evolution of, legislation in the area of landlord and tenant rights, as well as the legislation itself in order to discern the pursuit of a social justice objective in the impugned statutory scheme, and that the same is in accordance with the exigencies of the common good, and that evidence in the strict sense by witnesses is not something required, even though he would refer to some of that evidence which has been given in the case.
Conclusions:
Social justice principles:
Article 43 of the Constitution requires that, although all persons have the right to private ownership in property, and although the State guarantees not to abolish that right, the State ought to regulate that right according to what are referred to as “principles of social justice”. That is the first part of the Article to be considered. It seems to me that social justice in the context of property rights means that there ought to be at least a fair, as opposed to equal, distribution of property amongst all members of the society, so that justice is achieved. In a democratic society, and one in which an open market operates, one could never achieve a situation where all citizens enjoyed ownership in the property of the State to an exactly equal degree. There will always be those who have more than others.
In an extreme example, where the vast majority of property in the State was permitted by the laws of the State to remain in the ownership of a small group at the top of the tree so to speak, it could be seen as a justifiable interference with the property rights of those in such a protected and privileged position that they be required to make a share of that wealth available for the many at the middle or bottom of the tree, albeit on the basis of purchase or compensation. The passing of laws to facilitate the ownership in property being thus enjoyed by a greater number of persons in society would constitute the pursuit of a principle of social justice. This would be what Mr Fitzsimons has referred to as a form of distributive justice. But he points out that in the case of the plaintiffs they are obliged under the scheme impugned in these proceedings to transfer their property to an already prosperous entity, the first named defendant, and similarly in the case of other properties of which they own the freehold in Carrickmacross, and that there can be no social justice principle which requires that this be done.
It is however necessary to distinguish between the objective of the legislation and the effect which its implementation may have in some instances, such as those just referred to. It has been pointed out in the James case to which I have referred that “it was not unreasonable for [the legislature] to determine that landlords should be deprived of the enrichment which would otherwise ensue on reversion of the property, even if in a number of cases ‘undeserving’ tenants thereby benefited” and that “the operation of the legislation in practice and the scale of the anomalies under it did not render it unacceptable under Article 1, nor did it place an excessive burden on the applicants over and above the disadvantageous effects for landlords generally.”
Although these remarks are made in the context of Convention rights, I see no reason not to apply the same in the context of constitutionally protected property rights. Even though the first named defendant is without any doubt, on the uncontradicted evidence adduced, a very prosperous legal entity, whose wealth will in no material way be adversely affected in the event of not acquiring the fee simple of the property, it does not detract from the objective of the legislation itself, which provides a scheme of wide and general application. It is relevant in the context of what was stated in the James case, and which I adopt for the purpose of these proceedings, that although there are anomalies in the way in which the first named defendant has been able to avail of the legislation, there has been no evidence produced to this Court that other landlords besides the plaintiffs are similarly adversely affected by anomalies such as those complained of by the plaintiffs. While I am sure that in all probability there would be some others similarly affected, it is also the case that the scheme impugned herein has been in existence for a great many years and has not to my knowledge been challenged during that time as to constitutionality.
The evidence has also been that in the case of the plaintiffs there are about twenty five other properties of which they are the fee simple owners, but I have been referred only to the fact that of these there are a small number of cases of what might be called prosperous or wealthy tenants, such as Mr Daly, Bank of Ireland and Allied Irish Banks. Perhaps some other tenants fall into that category, although the concept of “wealthy” is somewhat elusive of general definition.
The lack of any evidence as to the extent to which so-called wealthy or prosperous tenants are availing or have availed already of the scheme is of relevance, because even though undoubtedly some such anomalies or unintended consequences of the legislation may have occurred, it does not follow that the scheme should be seen as no longer pursuing its intended objective in respect of which the legislation enjoys the presumption of constitutionality. In my view, these features of the operation of the legislation cannot in themselves disturb the integrity of the social justice principles pursued by the legislation, and the presumption of constitutionality in that regard.
It is of course still necessary to identify the social justice principle which existed in 1967 perhaps, but certainly in 1978 and onwards, in order to answer this part of the plaintiffs’ submission. What I have said thus far is really to the effect that legislation which has as its object an equitable distribution of property rights amongst all sectors of society is legislation which is pursuing a social justice principle, even if in achieving that objective some persons who do not need to benefit from the scheme in monetary terms, in fact come through some chance, within the specific terms of the scheme.
Mr O’Donnell, on behalf of the State, has sought to demonstrate that the impugned legislation has such a social justice objective, both by evidence adduced, and by reference to the history of the development of the law in this area over many years, and therefore the historical context of the legislation.
The plaintiffs called Prof. Fahy to express expert views as a sociologist in relation to the social justice principles which might be seen to exist in the legislation. I have set out that evidence earlier and I will not do so to any extent again. He stated that the concept of social justice in the context of land distribution referred generally to a situation where disadvantaged people were regarded as having an entitlement to have that disadvantage addressed by society at large, i.e. the State. But it will be recalled that he stated that under previous schemes for the acquisition of land from land owners it was on the basis that the cost of the schemes was borne by the State and not by a particular group of individuals, and that where the State was pursuing a social justice objective it should bear the cost of that. He referred also to the fact that the Ground Rents Commission set up ahead of the 1967 Act did not make recommendations in respect of business premises, and also that the Commission had not addressed the matter in terms of social justice but more from the viewpoint that people in the State expected to own their own homes.
While it is undoubtedly true that that Commission made no such recommendation in respect of business tenancies, it is also true that the position of business tenants had been earlier addressed in the 1931 Act when rights to a new tenancy were created provided that certain conditions were fulfilled, as well as other matters in ease of tenants such as the right to a reversionary lease at the expiration of a building lease or proprietary lease. The Meredith Commission had made no recommendation that there should be a right to acquire compulsorily the freehold. The 1931Act in Part II thereof had also made certain provisions in respect mainly of urban area tenants in relation to improvements, and its short title refers to the Act being “An Act to make provision for the further improvement and amelioration of the position of tenants……..”. I refer to these matters in order to introduce the concept that the impugned legislative provisions must not be viewed as an isolated piece of legislation, but rather as part of a continuum of legislation all of which was designed in different ways to improve, as the legislature saw it (and that is important to observe) the position of tenants. I refrain from trying to identify a distinction between “improvement” and “amelioration” since I do not need to, but clearly both words have a meaning which is in ease of the tenant.
The Meredith Commission had been asked in 1927 by the government of the day to “enquire into and examine the existing law governing the relationship of landlord and tenant in respect of holdings in urban districts, towns and villages, occupied either for residential or for business purposes, with a view to ascertaining what hardships and anomalies, if any, arise under the law, and to recommend………”
Clearly that government was concerned about social justice at that time in 1927. Certain legislation was brought in following the report of that Commission. Mr Fitzsimons has pointed to the fact that in neither the 1931 Act, nor in the later 1958 Act which expanded the category of qualifying leases for the purpose of the entitlement to a reversionary lease, is there any entitlement to a reversionary lease where the premises was a business premises and the lease was subject to rent reviews, and there were in addition certain ways in which a landlord could avoid having to grant a reversionary lease, such as where he had in mind a bona fide intention to redevelop the site and so on. In so far as Mr Fitzsimons’s submission may be suggesting that the government may have thus demonstrated a view that it did not consider that business tenants were in a disadvantaged class and therefore not within any concept of social justice, I would not agree that it can be so interpreted for present purposes.
By 1961, the Minister for Justice considered it desirable to set up another Commission to consider matters concerned with ground rents. But it is important also to note, as appears from the very interesting and extensive history of the legislation which is contained within the report itself, that matters relating to the position of tenants were the subject of some ongoing scrutiny by the government and the legislature after 1931. It is not as if matters lay dormant until the late 1960s. For example, in 1936 a tribunal was set up to investigate the existing law in relation to certain occupational tenancies in urban areas. In 1943, the Landlord and Tenant (Amendment) Act, 1943 was passed giving an entitlement to compensation or the right to a reversionary lease to a lessee of a bare site who had erected buildings thereon. These matters can in my view be seen quite easily as continuing to observe and keep in mind broad social justice principles in ease of tenants, who historically had been a disadvantaged class.
The Ground Rents Commission Report on page one thereof refers to the terms of reference of the Commission. It appears that at the end of 1961, the Minister asked the Commission to consider and report on a number of matters, as follows:
“1. whether leaseholders should be given the right to purchase compulsorily the freehold an d other superior interests in their property on the basis that no assistance (by way of grant, loan or otherwise) from public funds towards the cost of purchase is involved;
2. whether the creation of further ground rents should be prohibited or restricted; and
3. what (if any) legislative provision should be made in relation to these matters. ”
I note that no distinction is drawn in these terms of reference between business tenants and residential tenants. It merely refers to “leaseholders”. As it turned out the Commission came to a view that it would not propose to the Minister that there should be a right to purchase the reversion of a purely business premises. In that regard the Commission reported as follows at para. 92:
“There was some support for the proposition that the right to purchase should be given only to a lessee of a dwelling, or of a combined dwelling and business premises. In general it was not proposed that there should be a right to purchase the reversion of a lease of purely business premises.”
Whatever recommendations are made to government, it is still a matter for the government to decide what if any of the recommendations it will incorporate into legislation. It is equally open to such a government to include in any legislation matters which have not been recommended, where the government nevertheless considers that in order to regulate rights by principles of social justice, it will permit all tenants regardless of whether they are residential or business lessees to be entitled to purchase the freehold interest of their premises. It is still a regulation by principles of social justice so to permit, even if it could be said both at the time and in later years that the class of business tenants in the country, or at least some of them, may not be generally regarded as deserving or needy. A consideration of the question of where that idea fits the “exigencies of the common good” will be dealt with in due course. I am simply looking at the question of whether such legislation can be seen as aimed at principles of social justice in the sense of distributive justice. In my view it can.
Some parts of Prof. Fahy’s evidence must be considered in the light of the fact that he was asked to opine on certain matters on an assumption that the Court would find that the compensation given to the landlord under the scheme would be found by the Court to be an undervalue. On that assumption he stated that a scheme which provided that the landlord should ear a cost of the scheme could not be socially justified and would be in stark contrast to earlier schemes under which any undervalue was made good to the landlord by the State in one way or another.
He similarly stated that for one prosperous entity to benefit at the expense of another could not be justified. He confirmed however to Mr Ralston that where the landowner was receiving fair market value for his interest it was unobjectionable. In view of the fact that I am satisfied that the landlord does receive fair compensation under the scheme, given the nature of his residual interest in the property, Prof. Fahy’s evidence in this regard is immaterial.
I am satisfied that the objective of the legislation must be looked at in isolation from how it is implemented, since the latter relates more to the question of the exigencies of the common good and proportionality. The objective of social justice is clearly evident in any legislation which enables a tenant to acquire the fee simple interest, even though in some or indeed many instances the tenant is no longer as disadvantaged economically as in previous generations. Disadvantage is not to be judged in purely economic terms. For that reason I do not feel that the evidence of Mr McDowell should sway the Court since it looks at social justice solely from the viewpoint of the economic transaction taking place when a landlord grants a lease to the tenant, and attempts to persuade the Court that simply because the tenant must be taken as making a business decision that by the end of the term he will have got his money back from any use he makes of the premises, he is not at any loss as such for which he needs to be protected. I think this view of an economist as such, while expert, and interesting as a viewpoint, is too narrow a view as far as basing any decision thereon as to whether there is a social justice objective in entitling a tenant to acquire the freehold is concerned. Other factors apart from pure economics are concerned come into play and to which a government may have regard in deciding on a social justice policy. There can be other factors or disadvantages affecting the enjoyment of the property, which arise from status of tenant. Ownership is not absolute, and there still exist the remnants of obligations between landlord and tenant, aside from the payment of a rent, which have led to measures being taken from time to time by the legislature, and which have effectively emasculated the effect of certain covenants (i.e. against assignment, sub-letting, making alterations and in respect of user etc), such that a landlord will not be permitted to unreasonably withhold consent. These provisions by which the advantage to the landlord of such covenants is emasculated is further evidence of a leaning by the legislature in favour of lessee empowerment. A measure which enables a tenant to have these restrictions removed completely can be seen as pursuing a social justice objective, which is apart and distinct from any question of wealth redistribution.
I think there is much to be said for a submission made by Mr O’Donnell, namely that if some of the evidence given by Mr McDowell were to be accepted and acted upon by the Court it would result in a situation where the legislation would revert to a position which the legislature had over many years sought to address in the interests of tenants, and certainly since 1931 including in relation to business premises.
Historically of course the main focus of land reform was the redistribution of wealth from the advantaged land owning class to the disadvantaged tenant class, and in respect of land as opposed to either dwellings or business premises. The history of this country over many centuries which led to the existence of such a large disadvantaged class of people does not have to be recited. It is part of the history of this country for centuries, and was referred to by Prof. Fahy in his evidence to an extent, and is also described in both the 1926 Meredith Report and the 1964 Ground Rents Commission Report. That historical backdrop does not and cannot assist in the actual interpretation of any particular provision, but in arriving at a conclusion as to whether the legislature were guided by a principle of social justice when enacting the relevant provisions under discussion, the Court must be entitled to look to aspects of the social history of the country in order to provide some context to the legislation. In that regard also I believe that it is appropriate not only to look at the particular pieces of legislation under scrutiny in these proceedings, but also to look at the entire body of legislation in this area, particularly the 1931 Act and the 1967 Act, and subsequent such Acts since there is much interweaving and cross-referencing between the various Acts.
The exigencies of the common good:
Reference has already been made to the significance to be attached to the word “accordingly” appearing in Article 43.2.2. It is therefore only where the State is pursuing a social justice principle that it may as occasion requires delimit the exercise of property rights with a view to reconciling their exercise with the exigencies of the common good.
It is worth noting also the phrase “as occasion requires” appearing in Article 43.2.2 of the Constitution. Such delimitation of property rights by the State when pursuing a principle of social justice, must therefore at the relevant time (i.e. the hearing of these proceedings) be ‘required’ for the purpose of reconciling their exercise with the exigencies of the common good. Not only does the phrase suggest that the legislative measures may have a certain in-built obsolescence, since the ‘requirement’ for same could disappear after a passage of time, but it would seem also to feed into the concept of proportionality in the sense that while a particular measure may well assist or have assisted in reconciling the exercise of certain property rights with the exigencies of the common good while in pursuit of a social justice principle, it may not be ‘required’ in order to do so. That is consistent with the proportionality argument that constitutional rights should be interfered with, restricted or delimited as little as is necessary for the attainment of the desired social justice objective. However I will come to the question of proportionality as such in due course.
It is important to reach a conclusion as to the meaning to be given to the words “exigencies of the common good”. The plaintiffs accept as they must that it is for them to rebut the presumption that the scheme is reconcilable with the exigencies of the common good. They submit that there is nothing within the text of the relevant legislation to indicate what legislative objective consistent with anything which can be described as a common good is being pursued. They say also that in so far as the State may argue that a common good is achieved by the social justice principle behind the transfer of property from one class of persons to another, this is negated by the circumstances of the present case where the recipients are themselves very wealthy and prosperous business people. They rely on the absence of any identifiable need in respect of business tenants in the Ground Rent Commission’s report referred to already. These arguments in my view are predicated on a meaning being attached to the word “exigencies” which equates to something like absolute necessity. That would be going too far in my view, and a meaning far short of absolute necessity would be adequate, since otherwise the legislature would be under such a strict requirement of proof of absolute necessity in every instance where they wish to amend the law in relation to delimiting property rights that the situation would become impossible. Of course the Courts enjoy an ultimate supervisory role in ensuring that legislation passed by the Oireachtas is constitutional, but the Courts should be slow to in any way substitute its own view of what may or may not be required in order to reconcile the exercise of property rights with the exigencies of the common good. Until some point of absolute extremity is reached where legislation is patently and manifestly not in pursuit of any possible common good exigency, the Court should abstain from interfering with the role of the legislature in deciding what measures are needed. The present case is not such a situation. The Oireachtas can be seen over many decades by now as having in mind a social justice objective in the area of the relationship between landlord and tenant. The fact that a measure or a series of measures as part of an overall scheme has a consequence in some cases, such as the present one and other Shirley properties, where some persons already prosperous and even wealthy, are entitled to purchase at a fair price the residual interest of the landlord, as well as poorer persons, does not take the scheme outside of a common good exigency. I certainly have received no evidence to suggest that in anything like a very large number of cases, not to mention even the majority of cases, such a situation arises. The common good does not mean the good of all in the sense of every person without exception. In other words, the fact that some anomaly is thrown up by the scheme, such as where the first named defendant is a wealthy entity, does not mean that the legislation does not meet the exigencies of the common good in a broad sense.
It is also apparent that the Oireachtas have been of the view over decades that legislation of this kind, although each piece is individually distinct, is consistent with the exigencies of the common good. In relation to some such pieces of legislation the plaintiffs make no challenge. Their focus is on the later pieces to which they have referred. Their contention is really that with the passage of time the exigencies seen to exist many decades ago are no longer exigencies in a situation where many tenants are no longer impoverished and in need of a law which requires a landlord to hand over to the tenant his freehold in the property at what the landlord sees as an undervalue far removed from any real market value for the property. But that is not to say that the legislation no longer meets the exigencies of the common good overall. A passage from the judgment of Finlay C.J. in Tuohy v. Courtney [1994] 3 I.R. 1 appearing at p.47 is apt, where the learned Chief Justice states:
“The Court is satisfied that in a challenge to the constitutional validity of any statute in the enactment of which the Oireachtas has been engaged in such a balancing function, the role of the courts is not to impose their view of the correct or desirable balance in substitution for the view of the legislature as displayed in their legislation but rather to determine from an objective stance whether the balance contained in the impugned legislation is so contrary to reason and fairness as to constitute an unjust attack on some individual’s constitutional rights.”
There is an overlap with issues of proportionality in the passage quoted, but it is also relevant to the extent to which this Court should attempt to interfere in the exercise by the Oireachtas of its un doubted discretion in the matter of when it shall intervene legislatively in the interests or exigencies of the common good. A large measure of appreciation and deference must be allowed by the Courts in such an area. I have already referred to the judgment of the ECHR in James v. United Kingdom and I have set out some of the conclusions and have included some quotation. Even though that Court was looking at the legislative intention and policies pursued by the UK from the viewpoint of an international Court and for that reason was stating that these matters are largely matters for the local legislature to determine, this Court sees no reason not to do the same given the fact that the Oireachtas is uniquely positioned to determine what is or is not meeting a common good exigency in the broad sense contended for, and in so far as I am required to have regard to the case law of the ECHR in reaching my conclusions, I gladly do so in this instance, and am also of the view that the James case in large measure accords in any event with the jurisprudence of the Irish courts, albeit that the James case, as mentioned by Mr Fitzsimons, dealt with only residential tenancies, and not business tenancies.
I am satisfied that the impugned statutory scheme is one which must be seen as intended to reconcile the exercise of the plaintiffs’ property rights with the exigencies of the common good, and I am not satisfied that the presumption of constitutionality which attaches to the legislative scheme in that regard has been rebutted. For the reasons set forth at some length already I am satisfied that a social justice principle lies behind the legislation, even one that endures still, and it would be difficult to demonstrate in that situation that nonetheless the legislation does not meet the exigencies of the common good, by saying that there has not been shown to exist a particular need on the part of the first named defendant to have the benefit of the scheme. While the issue of proportionality and that involving the concept of the common good are somewhat overlapping, it is necessary to address the proportionality issue separately.
Proportionality:
The test of proportionality nowadays is generally accepted as being properly expressed by Costello J. (as he then was) in Heaney v. Ireland [1994] 3 I.R. 593 at p. 607, where the learned judge stated:
“In consideration whether a restriction on the exercise of rights is permitted by the Constitution, the Courts in this country and elsewhere have found it helpful to apply the test of proportionality, a test which contains the notions of minimal restraint in the exercise of protected rights, and of the exigencies of the common good in a democratic society. This is a test frequently adopted by the European Court of Human Rights (see for example Times Newspapers Ltd v. United Kingdom (1979) 2 EHRR 245) and has recently been formulated by the Supreme Court of Canada in the following terms. The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right. It must relate to concerns pressing and substantial in a free and democratic society. The means must pass a proportionality test. They must:
(a) be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations;
(b) impair the right as little as possible; and
be such that their effects on rights are proportional to the objective: Chaulk v, R [1990] 3 SCR 1303 at pages 1335 and 1336.”
The plaintiffs submit that the impugned legislation in these proceedings fails these tests even if the Court is satisfied that it passes the social justice test and addresses exigencies of the common good, since in the manner in which it operates it is arbitrary, unfair and irrational and therefore disproportionate.
As I have already set forth, the plaintiffs contend that the manner in which the 1978 Act in s. 10(2) thereof links the rent to the rateable valuation is unconstitutional in as much as the section for the first time made this link one of the criteria for eligibility to acquire the fee simple. Mr Fitzsimons pointed to the fact that prior to that provision, the 1958 Act in s. 4(3)(a) had availed of the link between the rent and the rateable valuation only so that the tenant could avail of a presumption that a lease was a building lease, whereas in s.10(2) of the 1978 Act it became an eligibility criterion. However in my view the objective in each case was the same – namely in order to make the relevant provisions applicable to land with premises erected thereon by tenants, and with rents at such a low level that it was to be presumed, if necessary, that they were the subject of a building lease. There is nothing irrational, unfair or arbitrary in my view about the introduction of that criterion in s. 10(2) as one of several to be fulfilled for eligibility into the scheme. It is a proportionate measure for the purpose of laying down some method by which it can be determined whether the lease is one to which the entitlement should attach. It is not irrational since one can see the reason why it was included.
It will be recalled also that under the section the relationship of the rent to the rateable valuation was to be looked at as of the date of service of the notice under section 4, rather than as of the date of granting of the lease itself. The plaintiffs submit that this creates unfairness since it permits premises which at the date of the creation of the lease had a rent which was greater than the rateable valuation, and therefore outside the scheme, to become by effluxion of time only (i.e. by increases in the R.V.) within the scheme, and I have already set forth those submissions.
It would be beneficial at this point to refer again to that part of the plaintiffs’ case made in relation to the mechanism by which the rateable valuation of premises generally is arrived at, as explained by Mr McMillan in his evidence on behalf of the plaintiffs. Without revisiting his evidence in every detail since I have already set same out quite fully, it will be recalled that he explained that in Dublin city for example a factor of .63 of 1% of net annual value was used for the purpose of arriving at a rateable valuation, whereas in other locations that factor might be .5 0f 1% or .4 of 1%, and that this produced an anomalous situation where two premises, each identical in every relevant way, could nevertheless have different rateable valuations simply because of what town each was located in. That evidence is availed of by the plaintiffs in this case to demonstrate what they submit is the completely arbitrary nature of the means of selection of landlords who are obliged to part with their fee simple interest in property, and that this anomalous and arbitrary selection is unfair, unnecessary and unconstitutional.
I have considered the evidence in this regard. The method by which rateable valuations are arrived at is not itself under scrutiny or attack in these proceedings. But it is how that system operates to select persons for the purpose of s 9 of that Act which is being referred to, in order to assist the submission that the overall scheme and in particular the provisions of s. 10(2) of the 1978 Act is unfair. I agree that the fact that a different factor is applied to the net annual value in relation a premises depending on where the premises is located appears on its face to be irrational. But it is not necessarily the case in my view, since presumably the particular factor applied to a particular area is designed to take account of different circumstances prevailing in different towns, such as economic, social and other features which might make a premises in one town more valuable than an identical premises in the adjoining town. But again that may not be so in fact, since presumably that element is addressed already before applying the factor, by arriving at the net annual value of the premises in each town in the first place. I do not have to arrive at a definitive conclusion in this regard. But I accept that Mr McMillan’s evidence suggests that anomalies might arise in that a tenant in one town occupying under a lease and paying a rent of say £30 per annum may enjoy an entitlement to acquire the freehold in that property because his rent is lower than the rateable valuation at the relevant date, whereas a tenant in an a different town paying the same level of rent would not be so entitled, simply because the rent exceeded the rateable valuation, perhaps by reason of the application of a different factor to the net annual value. In such a situation, the two respective landlords are treated differently, and perhaps simply as a result of some anomalous situation arising from the manner in which rateable valuations are set. I accept that the system would be capable of throwing up some such anomalous situations. It does not in reality affect the present case since the rateable valuation by now is so much greater than the rent that any of the factors, when applied to the net annual value of the premises, would produce a rate many times higher than the rent reserved under the lease.
On the other hand, other anomalous situations might arise under the existing scheme, perhaps more unusual than the situation which has availed the first named defendant but not necessarily so, where the scheme operates to unintentionally exclude a tenant from the scheme by the use of, for example, of the linkage between the rateable valuation and the rent. I accept that the evidence from Mr O’Cleirigh that in a situation where a lessee under a building lease has no doubt as to his statutory entitlement to purchase the fee simple, “the rent reserved in the lease will invariably be less than the rateable valuation”. But there could nonetheless be an anomalous and exceptional situation where a lessee holds under a rent which for some reason exceeds the rateable valuation, even by a minute amount. Such a tenant would be excluded from the scheme in a way which the legislature will not have intended, but it could not be said that as a result the entire scheme is unconstitutional.
I made certain findings in my judgment dated 31st May 2005 in the Circuit Appeal. As a result I concluded that the first named defendant was a person who was entitled to enlarge his interest in the premises demised by the 1945 lease by acquiring the fee simple interest therein from the plaintiffs in these proceedings. That conclusion involved a finding based on how the legislation defined “improvements” and “additions” to the original permanent buildings, which have been referred to as Carrick House. I concluded that the works of construction carried out by the tenant were such that they caused the original Carrick House to lose its original identity, and this finding resulted in those works being classified as “additions” rather than mere improvements. That finding in turn led to the unavoidable conclusion that the lessor had not erected all the permanent buildings on the property. There has been some discussion before me in the present proceedings as to whether this was the sole basis on which I arrived at my conclusions as regards the fulfilment of the condition contained in s. 10(2) of the 1978 Act as regards the permanent buildings, or whether I in fact relied upon the so-called presumption contained at the end thereof that until the lessor proved the contrary to be the case it was to be presumed that the permanent buildings had not been erected by the lessor. I am satisfied that I did not rely on the presumption, but that having so found without reporting to same, I expressed some views to the effect that if I had been required to so rely on it I would not have been satisfied that the landlord had successfully rebutted it in the light of the requirement that the contrary be “proved” rather than that the Court simply be satisfied on some probability test, that the lessor had erected the buildings. I do not believe that the manner in which I expressed the matter was such as to prevent the plaintiffs for the purpose of their challenge to the scheme on proportionality grounds in these proceedings from arguing that the presumption as worded sets the bar so high as far as proof is concerned that it is an overly onerous obstacle to place in the path of a lessor, especially given the length of the leases in question and the likelihood that records of construction would not survive, even had the lessor reason to think at the time the lease was granted that such records of who paid for the erection of the permanent buildings would be required some fifty years later or more perhaps.
In the present case of course we know that Carrick House was constructed in the late eighteenth century which makes the availability of adequate records not just unlikely but improbable. The plaintiffs herein in fact had discovered some records of the history of the property going back to those times, but nothing therein satisfied me that it had been proved that the lessor had erected the house.
I mention this again now because it has relevance to the current issue of constitutionality. There is certainly no proof whatsoever that any tenant or lessee of the property was in possession on foot of a building lease as such, or any agreement to build. There is no evidence of any kind that any lessee actually built the property. If there had been I would have been able to find that the condition provided for in s. 10(1) of the 1978 Act had been met.
The eligibility of the first named defendant to acquire the fee simple was derived simply because, by virtue of the very precise way in which the conditions and definitions for eligibility are crafted in this very detailed legislation, he was able by chance to come within them. This extends to the fact that by chance also, in a sense, the rent over the years had become less that the rateable valuation as of the date of service of the notice – that “chance” being the result of the rent remaining constant (apart from the increase in 1970 to £75) while the rateable valuation increased as a result of the extensive works of development carried out by the tenant himself.
One way or another, the first named defendant met the requirements under the various provisions. That is his undoubted right under the scheme as worded, and I duly assessed the price of his exercise of that entitlement at €30,000.
But for the purpose of these proceedings the Court is, I feel, able to look at what I might loosely call the reality of the situation. By that I mean that the probability is that it was the lessor who in the late 18th or very early 19th century erected the original buildings on this site, and also that it was the lessor who in due course altered the buildings to the condition they were in when the lease of 1945 was granted, although I note that in a lease of 1919 wherein the rent was fixed at £50, a covenant was inserted which required the tenant to expend a sum of not less than £500 in carrying out works set forth in a schedule to that lease.
There was some evidence that various tenants, such as doctors and a solicitor occupied Carrick House for relatively short periods from time to time, and that when these tenancies came to an end the lessor resumed possession and then re-let same. In this way while it was never proved that the original buildings were erected by the lessor, it is the case that upon the granting of the lease the buildings were “provided” (as Mr Fitzsimons referred to it) by the lessor in 1945. That being the case, one could not say that the lease in this case was ever to be regarded as having been a building lease in the sense well understood and to which a ground rent would attach.
It is because of these factors that Mr Fitzsimons has submitted that the rent in the 1945 lease is not what is usually referred to as a ground rent – in other words a rent which is so low that it cannot be seen as being a rack rent or rent one would expect to see in an occupational lease or tenancy. The rent reserved in the 1945 lease was £55 per annum, and there is uncontroverted evidence that rents after the Second World war were significantly low, the implication being that £55 per annum can be seen as being not a bad rent at that time from the landlord’s point of view, and representing far more than it would have been if it were to be simply a ground rent in the accepted sense of that term. I must say that I agree that there is little question but that this rent was not a ground rent in the sense we have come to use that term. I note that Prof. Wylie in his evidence stated that in fact the term “ground rent” is not a term of art, and that it is not defined in the legislation. He stated that “it is used generally speaking to mean a rent that is reserved on a long term lease which is relatively low because all that is being leased is the ground – in other words it does not reflect any buildings because it is contemplate those buildings will be added later.”
I would not be satisfied by any evidence which I have heard that this rent was in 1945 so low as to amount to a ground rent in that sense. Nevertheless, by the way in which the scheme operates, this rent, by becoming over the years lower than the rateable valuation applicable on the date of service of the notice of application to acquire the fee simple, has achieved the very same significance, as far as assisting the tenant’s eligibility to so acquire that interest, as a classical ground rent. In so far as the scheme might be seen as not having been intended to benefit tenants who were not tenants under building leases or proprietary leases, this is certainly an anomaly in my view, and produces a purely fortuitous situation for the tenant in this case. Nevertheless the legislation says what it says and the tenant is entitled to avail of its provisions if he comes within them and I have found that he does. But I think it is important to set out these matters so as to provide a proper backdrop to the consideration of the constitutionality of the impugned overall scheme and the particular sections which form part of the scheme and about which the plaintiffs complain.
The plaintiffs submit that if one of the purposes of the statutory scheme to acquire the fee simple is to protect a tenant from a situation where at the end of the term of a lease the premises erected thereon by the tenant, and at no cost to the lessor, would have to be handed over to the landlord, as was the invidious position under the common law, then the legislation in question was not put in place for any purpose applicable to the first named defendant since he did not erect Carrick House, and neither did any of his predecessors in title, nor in fact any lessee at any particular time in the history of the premises. In other words he ought not to have the benefit of the legislation provided for in the scheme, which they say forces them in the first place to part with what is rightfully theirs, and secondly at a price which is less than market value in any event. They say that the first named defendant in effect is getting a benefit which the legislation did not intend him to get, and that it is by some unfair, and arbitrary chance that this is so and that it is unconstitutional. I agree with those submissions as far as the element of chance or good fortune of the tenant is concerned. But it is yet another matter to conclude therefore that the scheme is an unjust attack on the plaintiffs’ property rights on proportionality grounds, having regard inter alia to the fact that what I regard as fair compensation is paid.
I am of the view that simply because the scheme throws up an anomaly or anomalies in this way is insufficient to render it unconstitutional – the more so where adequate and fair compensation is paid to the landlord in any event. Where there is a statutory scheme of general application under which a great number of premises are intended to be included, and certain criteria are decided upon by the Oireachtas for eligibility into the scheme, it is reasonable that a certain margin of appreciation be permitted to the Oireachtas in the manner in which the scheme is devised. In any such scheme there will inevitably be premises which happen for one reason or another come within the scheme even though the particular category of premises was not the intended target of the legislation. It would be virtually impossible to avoid such a situation arising no matter how carefully and painstakingly the criteria for eligibility into the scheme are crafted.
In relation to the price fixing provisions in s. 7 of the 1984 Act, I am satisfied firstly that what is being valued in reality is the residual interest of the landlord in the premises, and that for all reasonable purposes this can be seen as the income stream to which the landlord is entitled, since, again for all practical purposes, the landlord no longer has an interest which will ever entitle him to possession of the premises. I accept that there could be the occasional situation in which a landlord regains possession, but that would have to be regarded as the exception rather than the rule.
I accept completely, as I must, that under normal circumstances where a person is being deprived compulsorily of his property in the interests of the common good he or she must, as stated by the Supreme Court in Re Article 26 and Part V of the Planning and Development Bill 1999 [2000] 2 IR 321 at 350 “be fully compensated at a level equivalent to at least the market value of the acquired property”. That in the present case means the market value of the landlord’s residual interest in the property.
I arrived at my conclusions as to the basis on which that value should be arrived at when I dealt with the Circuit Appeal. I am completely satisfied that the very detailed provisions contained in the provisions as to what factors are to be taken into account and what factors are to be excluded from consideration represents a balanced approach to valuation of the residual interest of the landlord, and that the figure arrived at ensures that fair, reasonable and appropriate compensation is paid to the landlord for that interest. The fact that some already prosperous tenant thereafter may achieve a windfall by the onward sale of the freehold premises is not something which can affect the constitutionality of the scheme, even in the case of the first named defendant who one may safely say, for the reasons already stated, was not a category of lessee whom it was intended to benefit under the scheme.
On the basis of the nature of the interest being acquired under the scheme, I find nothing irrational, arbitrary or disproportionate about the manner in which the purchase price is arrived at. The exclusion of any increase in value of the premises attributable to development value is logically related to the nature of the landlord’s remaining interest – the right to receive rent. In relation to the use of the one eighth fraction, it has a rational connection to that interest as I have already referred to, but in addition the use of the fraction has in fact arrived at what I have concluded is a fair price. Indeed there has been evidence that the fraction is part of a mechanism by which a price is arrived at which is ahead of what the sale of the ground rent on the open market would achieve. In relation to redevelopment value, the plaintiffs have pointed to the fact that while under s. 33(1) of the Landlord and Tenant (Amendment) Act, 1980 Act a lessor has the right to prevent a lessee from obtaining a reversionary lease in circumstances where the lessor has his own scheme of development for the property, the lessor is completely excluded from any participation in that added value where the lessee exercises his right to acquire the freehold. That submission of course must be looked at in the light of the fact that s.59 of the same Act, a lessee has been found to be disentitled to a reversionary lease by virtue of the provisions of s. 33(1) thereof, shall be paid compensation by the lessor, and the measure of that compensation is described in s. 59(3) as being “the pecuniary loss, damage or expense which will, in the opinion of the Court, be suffered by the disentitled person as a direct consequence of the disentitled person having been declared not to be entitled to a lease”. In addition there are severe consequences for any lessor who fails to pay the compensation to the tenant. I do not think that the comparison which the plaintiffs make with the provisions in s.33(1) of the 1980 Act has any meaning in the context of whether the provisions of s. 7 are disproportionate as to their effect on the landlord.
For all these reasons, I dismiss the plaintiffs’ claim.
Representatives of Chadwick (deceased) & anor -v- Fingal County Council
[2007] IESC 49
Fennelly J
36. Finally, I must address the reliance by the appellants on the constitutional right to the ownership and enjoyment of property as mandating an interpretation of section 63 to the effect claimed. Accepting that section 63, having been applied by a post-Constitution statute, should be construed so as to be consistent with the Constitution, it is necessary to consider whether the traditional interpretation could, in fact, give rise to a possible infringement of any constitutional right of the appellants. It is common case that the appellants are entitled under the section to be compensated for the value of the property taken, for the effects (if any) of severance and for injurious affection of their retained lands by anticipated use by the Council of the lands acquired from them. It is also common case that, if no land had been taken, there would have been no right to compensation for the damage, inconvenience or loss of amenity caused by the future operation of the motorway. No neighbour of the appellants has any such right, unless land is taken and used for that purpose. The appellants’ claim is premised on the proposition that the acquisition has affected or will adversely affect some property right, which is entitled to constitutional protection. What is at stake is the non-tortious effect of activities on land not taken. The injurious affection here in contemplation is the alleged damaging effects to the retained lands of acts which would not give rise to any cause of action at law, particularly the law of nuisance, and does not entail any injury to any existing property right. I find it impossible to discern any unfairness or injustice in this scheme of compensation which could give rise to any issue as to whether, to use the language of Article 40, section 3, sub-section 2 of the Constitution, there was an “unjust attack” on property rights. It follows, as a corollary, that the claimants’ right to sue the Council or any other user either of the land taken or any other lands is undisturbed.
Clinton v. An Bord Pleanala & Ors
[2005] IEHC 84 (15 March 2005)
Finnegan P.
The Constitutional Issue
The constitutional issue is pleaded in the Statement to Ground Application for Judicial Review as follows. The relief sought –
“8. In the alternative a Declaration that the provisions of Part XIV of the Planning and Development Act 2000 are invalid having regard to the provisions of the Constitution.”
The grounds relied upon are as follows –
Strictly in the alternative to the foregoing pleas, it is the Applicant’s case that if the legislative provisions in respect of the compulsory acquisition of lands allow for the acquisition of lands other than in circumstances whereas a very minimum (i) there is a mandatory requirement that the acquiring authority demonstrate that there is a countervailing public interest which justifies the use of compulsory purchase powers; (ii) the question of whether or not there is such a countervailing public interest is to be determined either by the High Court or by an independent person or body subject to a heightened standard of review by the High Court; (iii) the owner of the land is to be afforded a meaningful opportunity to make submissions and representations at an oral hearing as to why his land should not be acquired compulsorily (to include the concomitant right to fair procedures, extending to the right to advance and detailed notice of the reasons put forward in support of the compulsory acquisition; the right to discovery and the production of documents; and the right to cross examination); and (iv) that the use of the land acquired be confined to the particular purpose in respect of which the independent determination at (ii) above was made then such provisions are unconstitutional.
Under the Constitution, private property rights are expressly protected and the exercise of a power of compulsory purchase represents a prima facie interference with those rights. The use of such an exceptional power must accordingly, be justified by reference to the common good. More particularly the acquiring authority must be in a position to demonstrate that there is a countervailing public interest which justifies the use of compulsory purchase powers.
The Applicant was at all material times the owner of certain of the lands the subject matter of the confirmed Compulsory Purchase Order (the nature and extent of the lands owned by the Applicant are set out in the Schedule of Lands hereto). The right to retain those lands form part of the Plaintiff’s property rights, as protected by Article 40.1 and 3 and Article 43 of the Constitution. Any exercise by the State, or any agency authorised by the State, of a power of compulsory purchase over the said lands, can only arise in circumstances where, having regard to the public good, same is justified. Even where same is justified in principle, the extent to which the property rights are interfered with must, so as to comply with the principles of proportionality, be both proportionate to the ends intended to be achieved thereby, and interfere with the Applicant’s property rights to no greater extent than that which is necessary for the purpose of achieving such end.
The provisions of the Local Government (No. 2) Act 1960; the Housing Act 1966; and Part XIV of the Planning and Development Act 2000 are invalid having regard to the provisions of the Constitution in that the said provisions purport to allow for compulsory purchase of the Applicant’s lands other than pursuant to a scheme with the safeguards identified at paragraph 39.”
The Pleadings also raise as a constitutional ground at paragraph 20 the following –
“20. The citizens constitutionally protected property rights cannot be overridden simply on the payment of compensation. It is a necessary precondition of the acquisition of, and/or extinction of, any property right of the citizen that would be bona fide considered and, if necessary demonstrated either by statute or by the determination of the relevant acquiring authority, and confirmed by an independent review, that the public interest requires that the citizen be deprived of the property in question (even on payment of fair compensation).”
The relevant provisions of the Constitution are the following –
Article 40.3.2. The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
Article 43.1.1. The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
1. The State recognises, however that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.
It is submitted by the Applicant that if effect is to be given to the provisions of the Constitution in the context of a Compulsory Purchase Order before confirming the Order An Bord Pleanála must be satisfied that the acquisition is required by an exigency of the common good and in order to be so satisfied the acquiring authority must put forward for consideration by An Bord Pleanála the purpose of the acquisition and the manner in which the land required is proposed to be used. The Applicant however lays particular stress on the words “requires” and “exigencies” in Article 43.1.2 of the Constitution as imposing upon a body seeking to interfere with property rights and a requirement to show not just a necessity but something which is demanded for the common good: see An Blascaod Mor Teoranta & Others –v- the Commissioners of Public Works in Ireland & Others Budd J. 27th February 1998 at page 110 et seq –
“The following inferences can be drawn in respect of the principles of law from the cases. In order to ascertain the constitutionality of the 1989 Act, the Court must ask
(1) Whether this delimitation, the restriction on the rights of enjoyment of private property, is in accordance with the principles of social justice and
(2) whether the delimitation, in this case involving expropriation with compensation, is necessary in order to reconcile the exercise of the Plaintiff’s property rights with the exigencies of the common good.
Furthermore these questions must be examined against the background of the presumption of constitutionality and the margin of tolerance allowed to the Oireachtas in making the assessment of what is required to fulfil the exigencies of the common good. In this regard the word “exigencies” has a connotation of more than “useful”, “reasonable” or “desirable”: it means “necessary” and implies the existence of a pressing social need. The notion of necessity is linked to that of a democratic society. A measure cannot be regarded as necessary in a democratic society, based on tolerance and broad mindedness, unless it was proportionate to the legitimate aim being pursued. Furthermore, when the exigencies of the common good are called in and justify restrictions on the exercise of the rights of private property, being fundamental rights spelt out in the Constitution, it should be remembered that the protection of the fundamental right, is one of the objects which needs to be secured as a part of the common good. Has a pressing social need been demonstrated which justify the impugned legislation and its encroachment on the basic rights of private property? Is the amount of the encroachment proportionate to a legitimate aim being pursued and to the difference in the Plaintiff’s situation which requires the delimitation of their rights.”
From that case I take the following propositions. The delimitation of private ownership to be valid must be reconcilable with the exigencies of the common good and with the principles of social justice. There must be a sufficient and proper public purpose for the acquisition and which purpose cannot be achieved by lesser means.
Further the margin of appreciation allowable to the Oireachtas where fundamental rights to private property are concerned is not as wide as in cases such as MacMathuna –v- Ireland and the Attorney General (1995) 1 I.R. 484 and Madigan –v- The Attorney General (1986) ILRM 136 which concern the allocation of social welfare allowances and taxation respectively. The Applicant further submitted and I accept that it follows from Article 43.1.1 that compensation cannot validate an interference with property rights that is not justified by the exigencies of the common good: the right to private property cannot be equated with a right to compensation. It is submitted by the Applicant and I accept that the principle of proportionality applies to the exercise of the constitutional power to delimit the right to property.
From the Pleadings it is clear that the Applicant challenges in its entirety the Planning and Development Act 2000 Part XIV. The challenge however in argument was more focused and I propose to deal with the same on the basis advanced in argument.
Turning to the Ground at paragraph 20 of the Statement to Ground Application for Judicial Review I do not understand it to have been in contention between the parties that the mere existence of an entitlement to compensation would render constitutionally permissible the compulsory acquisition of property. As to the remainder of paragraph 20 I consider the same to be encompassed within the Grounds at paragraph 40. The proposition in paragraph 41 of the Statement of Grounds is an unobjectionable statement of constitutional principles.
Turning to paragraph 39 of the Grounds I propose dealing with the same seriatim –
(i) There is a mandatory requirement that the Acquiring Authority demonstrate that there is a countervailing public interest which justifies the use of compulsory powers.
Counsel for the Attorney General accepted and I agree that this is a correct statement of the law.
(ii) The question of whether or not there is such a countervailing public interest is to be determined either by the High Court or by an independent person or body subject to a heightened standard of review by the High Court.
I accept that the correct approach for this Court to adopt where a constitutional right is sought to be affected is that stated in Prest –v- Secretary of State for Wales (1982) 81 LGR 193 by Watkins L.J. –
“In the sphere of compulsory land acquisition, the onus of showing that a Compulsory Purchase Order has been properly confirmed rests squarely on the Secretary of State. The taking of a persons land against his will is a serious invasion of his proprietary rights. The use of statutory authority for the destruction of those rights requires to be most carefully scrutinised. The Courts must be vigilant to see to it that the authority is not abused. It must not be used unless it is clear that the Secretary of State has allowed those rights to be violated by a decision based upon the right legal principles, adequate evidence and proper consideration of the factor which sways his mind into confirmation of the Order sought.”
Where constitutional rights are to be affected I accept that both the relevant statutory provisions which are purported to be exercised and the manner and purpose for which they are exercised should be subjected to heightened scrutiny.
(iii) The owner of the land is to be afforded a meaningful opportunity to make submissions and representations at an oral hearing as to why his land should not be acquired compulsorily (to include the concomitant right to fair procedures, extending to the right to advance and detailed notice of the reasons put forward in support of the compulsory acquisition; the right to discovery and the production of documents; and the right to cross examination).
I accept this proposition: however I am satisfied that the statutory scheme meets all these requirements and accordingly does not offend the Constitution. The application of the statutory scheme is a different matter: should there be a denial of natural justice or an unfairness the remedy lies in the Courts by way of an application for Judicial Review: in short the appropriate remedy is to judicial review proceedings at the public inquiry or the decision and if there has been a denial of natural justice there is a remedy available. In such circumstances however the constitutional infirmity lies in the procedures and the decision making process but not in the statute itself. I am satisfied that the statutory provisions which provide for an oral hearing with an onus on the acquiring authority to satisfy the Bord that the power to acquire has been properly invoked in accordance with the statute. It affords him an opportunity to test the evidence proffered in support of confirmation by cross examination and by adducing evidence. There is a facility to obtain documents other than those produced by the Acquiring Authority in section 135 of the Act of 2002. The presumption of constitutionality carries with it an intention on the part of the Oireachtas that proceedings, procedures, discretions and adjudications pursuant to a statute are to be themselves in accordance with the principles of constitutional justice: see East Donegal Cooperative Livestock Mart Limited –v- Attorney General (1970) I.R. 317. Given that this is the case I am satisfied that the scheme of the legislation does not infringe the constitutional rights of the Applicant to private property.
(iv) That the use of the land acquired be confined to the particular purpose in respect of which the independent determination was made.
I have already dealt with the purpose for which these lands have been acquired and which are detailed in the Inspector’s Report. There is no question of that purpose having been abandoned. In these circumstances no issue arises.
Having regard to the foregoing I refuse the Applicant the leave which he seeks.
Shirley & ors v A. O’Gorman & Co. Ltd & ors
[2012] IESC 5 (02 February 2012)
The constitutional challenge
42. The appellant claims that the legislation which has the effect that it must transfer its fee simple interest in the premises to the first-named respondent is incompatible with the Constitution for a number of reasons. Some of these are broad and general and some are very specific to the appellant’s circumstances. The principal arguments can be summarised very briefly as follows:
1. Article 43 of the Constitution recognises that the exercise of property rights ought to be “regulated by the principles of social justice.” The exercise of property rights may, in the language of Article 43.2.2 “accordingly” be delimited by law “with a view to reconciling their exercise with the exigencies of the common good.” Provision for the compulsory sale by the owner of the fee simple in property such as the premises to a purely commercial lessee serves no discernible public interest, common good or social policy;
2. The combined effect of section 7, subsections 3 and 4 is to limit arbitrarily the amount of the purchase price payable to the lessor inter alia by providing for a maximum 1/8th of an imaginary market value having disallowed development value (section 7(3)) and any – special allowance under the 1980 Act, which represents additions and improvements made by the lessee and to prevent proper assessment of the deprivation of interest from being made.
3. Depending on the choice of valuations made, the difference between the price fixed on appeal by Peart J at €30,000 as the price of purchase of the fee simple and a wide range of possible valuations if the appellant was not entitled to purchase the fee simple was very large. The lowest possible comparable open-market value was, at a minimum, 100% more the figure of €30,000 fixed by Peart J.
4. The presumption in section 10.2 combined with the requirement that the lessor “prove” that he or his predecessors in title “erected” the building even when he can show that he owned the building outright (in this case, on the grant of the lease in 1919) is inflexible, arbitrary and unjust;
5. the criterion that the rent be less than the rateable valuation is arbitrary and capricious and unconnected to the purpose of the scheme, particularly having regard to the evidence as to the operation of rateable valuations in practice
43. Peart J considered all these arguments in a comprehensive judgment in the constitutional action. It is from that judgment that the present appeal is taken. Having regard to Article 34.4.5 of the Constitution a decision of this Court on the validity of any law must be pronounced in a judgment of the Court.
44. That provision does not apply to a judgment concerning the interpretation, as distinct from the validity of a law. Every Act of the Oireachtas must, so far as is possible, be interpreted, in a manner which renders it compatible with the Constitution. Walsh J explained this principle, known as the “double-construction” rule, in his judgment in McDonald v Bord na gCon (N0. 2) [1965] I.R. 217 at 239 as follows:
“The Greyhound Industry Act of 1958, being an Act of the Oireachtas, is presumed to be constitutional until the contrary is clearly established. One practical effect of this presumption is that, if in respect of any provision or provisions of the Act two or more constructions are reasonably open, one of which is constitutional and the other or others are unconstitutional, it must be presumed that the Oireachtas intended only the constitutional construction and a Court called upon to adjudicate upon the constitutionality of the statutory provision should uphold the constitutional construction. It is only when there is no construction reasonably open which is not repugnant to the Constitution that the provision should be held to be repugnant.”
45. The same learned judge recalled that passage and elucidated the matter further in his judgment in East Donegal Co-operative v Attorney General [1970] I.R. 317 at 341:
“Therefore, an Act of the Oireachtas, or any provision thereof, will not be declared to be invalid where it is possible to construe it in accordance with the Constitution; and it is not only a question of preferring a constitutional construction to one which would be unconstitutional where they both may appear to be open but it also means that an interpretation favouring the validity of an Act should be given in cases of doubt. It must be added, of course, that interpretation or construction of an Act or any provision thereof in conformity with the Constitution cannot be pushed to the point where the interpetation would result in the substitution of the legislative provision by another provision with a different context, as that would be to usurp the functions of the Oireachtas. In seeking to reach an interpretation or construction in accordance with the Constitution, a statutory provision which is clear and unambiguous cannot be given an opposite meaning.”
46. The standing of the appellant to challenge the constitutionality of provisions of the ground rents legislation depends entirely on its being affected by the impugned provisions. Section 10.2 of the Act of 1978 is the only provision which has been successfully invoked with the consequence that the appellant is compelled to convey the fee simple in its property to the first-named respondent. The application of the first-named respondent for an order entitling him to compel the appellant to convey the fee simple to him succeeded only because it was held to be able to meet the conditions of section 10.2.
47. The appellant complains that section 10.2, insofar as it compels it to sell the fee simple in the property to the first-named respondent is arbitrary and unjust. The appellant accepted that it could be logical for the Oireachtas to provide for the payment to the lessor of a fraction of the market value in the case of a building lease where the lessee had constructed and paid for the building and the landlord had merely provided the site. It was submitted that that logic broke down when what was in issue was not a building lease or anything akin to it. The effect of section 10.2 was to take into the net, for the first time, leases such as that for Carrick House, which were not building leases and where the landlord had provided the buildings to the tenant. The evidence on this aspect of the case was summarised by Peart J as follows:
“There was some evidence that various tenants, such as doctors and a solicitor occupied Carrick House for relatively short periods from time to time, and that when these tenancies came to an end the lessor resumed possession and then re-let same. In this way while it was never proved that the original buildings were erected by the lessor, it is the case that upon the granting of the lease the buildings were “provided” (as [counsel] referred to it) by the lessor in 1945. That being the case, one could not say that the lease in this case was ever to be regarded as having been a building lease in the sense well understood and to which a ground rent would attach.”
48. The learned judge proceeded to comment on the way in which a rent, which in 1945 could not be considered a “ground rent,” had, by falling below the rateable valuation permitted the lessee to qualify for purchase of the fee simple. He said:
“It is because of these factors that [counsel] has submitted that the rent in the 1945lease is not what is usually referred to as a ground rent – in other words a rent which is so low that it cannot be seen as being a rack rent or rent one would expect to see in an occupational lease or tenancy. The rent reserved in the 1945 lease was £55 per annum, and there is uncontroverted evidence that rents after the Second World war were significantly low, the implication being that £55 per annum can be seen as being not a bad rent at that time from the landlord’s point of view, and representing far more than it would have been if it were to be simply a ground rent in the accepted sense of that term. I must say that I agree that there is little question but that this rent was not a ground rent in the sense we have come to use that term. I note that Prof. Wylie in his evidence stated that in fact the term “ground rent” is not a term of art, and that it is not defined in the legislation. He stated that “it is used generally speaking to mean a rent that is reserved on a long term lease which is relatively low because all that is being leased is the ground – in other words it does not reflect any buildings because it is contemplatde those buildings will be added later.
“I would not be satisfied by any evidence which I have heard that this rent was in 1945 so low as to amount to a ground rent in that sense. Nevertheless, by the way in which the scheme operates, this rent, by becoming over the years lower than the rateable valuation applicable on the date of service of the notice of application to acquire the fee simple, has achieved the very same significance, as far as assisting the tenant’s eligibility to so acquire that interest, as a classical ground rent. In so far as the scheme might be seen as not having been intended to benefit tenants who were not tenants under building leases or proprietary leases, this is certainly an anomaly in my view, and produces a purely fortuitous situation for the tenant in this case. Nevertheless the legislation says what it says and the tenant is entitled to avail of its provisions if he comes within them and I have found that he does.”
49. It was not, of course, the fact, taken on its own, that the rent was less than the rateable valuation on 2nd March 1998, which enabled the first-named respondent to satisfy the requirements of section 10.2, although Peart J observed at another point that the “increases in valuation resulted in a premises creeping by chance, as it were, into the grasp of s. 10(2) of the Act.” It also had to satisfy, with the benefit of the presumption in its favour, the requirement that “the permanent buildings ……were not erected by the lessor or any superior lessor or any of their predecessors in title.”
50. The application of section 10.2 requires, in the first instance that there be a lease of at least fifty years and that the rent be below the amount of the rateable valuation at the date of service of notice of intention to acquire the fee simple, namely 2nd March 1998. There was no difficulty about compliance with these requirements. The major controversy, certainly in the course of the Circuit Court Appeal was concentrated on compliance by the lessee with the condition that “that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title.”
51. Before embarking on an analysis of that provision and how it should be interpreted, I must again advert to the fact that this matter has been decided by Peart J in his judgment in the Circuit Court appeal. It is impossible, therefore, to ignore the treatment of the issue by the learned judge. Insofar as I discuss them, it cannot be in the sense that this is an appeal from that decision. It is not and it cannot be. This Court may not encroach into the question of the determination of an appeal from the Circuit Court. It is, however, inevitable that the views expressed by the learned judge become the point of reference on the question of interpretation of the provisions of the legislation, because it was that interpretation that formed the basis on which the appellant mounted its challenge to the constitutionality of the legislation.
52. It does not appear to have been in dispute that proof that “the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title” refers to all the buildings and not merely a part. While I will return to the point, I would emphasise that the term, permanent buildings means all the permanent buildings. Counsel for the appellant submitted to Peart J, in the Circuit Court appeal, that the alternative provision, section 10.1, refers to “the permanent buildings” being erected by the lessee, and not to just some of the permanent buildings. Peart J appears to have accepted this proposition. When he was considering the alternative submission on the part of the first-named respondent in reliance on Condition number 1, he said that he did “not take the view that [Condition Number 1] can be satisfied in the present case by establishing or at least satisfying the Court that the works carried out to Carrick House by the tenant are of such a nature as to have caused Carrick House to have lost its original identity, and that in that sense the present Carrick House structure has been erected by the lessee.”
53. Clearly, the learned judge was taking account of the evidence of the transformation of the permanent buildings which, nonetheless, left standing significant parts of the original Carrick House. For instance, the internal staircase remained and the upstairs rooms had been converted into flats.
54. To put the matter beyond doubt, the learned judge clarified the position in his judgment on the constitutional issue by saying that it had been indeed his intention that his judgment would be clear and that in his view the reference to “permanent buildings” means all permanent buildings on the land.
55. The onus is, of course, on the lessee to satisfy the condition in section 10.1, which contains no presumption on which it can rely, but this passage does not depend on that. It addresses the substance of the condition, namely that the condition refers to the erection of all the permanent buildings. It deals with the fact, not proof of the fact.
56. Furthermore, when he turned to section 10.2, the learned judge appears to confirm that he considered that the proof related to all the buildings. He said:
“Under the latter part of condition 2 the onus is clearly on the landlord to rebut the presumption that the permanent buildings, and for this purpose this must mean the original Carrick House and its outhouses as demised in the 1945 lease, were not erected by the lessor or any superior lessor or any of their predecessors in title.”
In other words, it was common case that the lessee or its predecessors had erected all the permanent buildings which transformed the original Carrick House after the assignment to Mr Michael Connolly in 1972. The problem related to Carrick House. So far as the judge was concerned there was a presumption that the lessee or its predecessors had erected Carrick House and the appellant had to rebut it if it was to resist the application to acquire the fee simple.
57. The passage which I have just cited from the judgment of Peart J is of considerable importance, when considering the interpretation, in the light of the Constitution, of section 10.2. Although he does not spell it out, I believe the learned judge was saying that the term the permanent buildings meant all the permanent buildings on the land. At this point, it is the substance of the condition that needs to be discerned. I will consider the burden of proof and the presumption later. In order for the lessee to be entitled compulsorily to acquire the fee simple, it must be established
“that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title…”
Confusingly, the condition is negative in form. Expressed in positive language, and leaving aside the interpretation of “predecessors in title” for the moment, it means that to satisfy this condition it must be the fact that none of the buildings were erected by the lessor.
58. The interpretation I propose in the preceding paragraph is, in my view, necessary in order to arrive at a constitutional interpretation. If the term, permanent buildings, means that it is sufficient if the lessee has erected merely part of the buildings, however small, the right compulsorily to acquire the fee simple would be conferred on such a lessee regardless of the fact that it was the lessor that had erected and was the owner of the major part of the buildings. Moreover, the consideration for the purchase would be fixed pursuant to section 7(4) by reference to a rent which is one eighth of the market rent. In an extreme case, the lessee would be entitled to purchase the fee simple compulsorily even if he had taken a lease at very favourable rent, where the landlord had erected all the buildings, except for a small extension. It may, of course, be said that this is an unlikely scenario, because the rent would, in all likelihood, be greater than the rateable valuation. Nonetheless, this remains the correct interpretation of the term permanent buildings.
59. Without an interpretation to the effect that permanent buildings means all the permanent buildings, section 10.2 could, therefore, have the effect of entitling a lessee to acquire the fee simple calculated by reference to one eighth of the market rent even where the lessor had erected most or nearly all the buildings. The effect of the approach whereby the lessee may acquire the fee simple even if he has erected only part of the permanent buildings is graphically illustrated by the result reached in the present case, which I have described at paragraphs 39 and 40. The lessor is to receive only one eighth of the market value of the original Carrick House and lands.
60. Peart J was correct, therefore, to say that the issue of the presumption, in the present case, related to Carrick House and its outhouses.
61. The question, therefore, became essentially whether the appellant could rebut the presumption contained in section 10.2 that the permanent buildings, insofar as they consisted of the remaining elements of Carrick House “were not erected by the lessor or any superior lessor or any of their predecessors in title…”
62. The evidence before the High Court related to the entire period of the ownership of the property by the appellant and its predecessors in title. Peart J traced the history back to a grant to the 1st Earl of Essex in about 1576 by Queen Elizabeth I of England. He said that certain of that granted property, including property situated on the west side of Main Street, passed by inheritance to the ancestors of the present Shirley family in about 1646 and had remained in the ownership of that family in the broad sense ever since. He cited the evidence, in the form of reports of Mr.David Semple, Consulting Engineer and Architect, who assigned to Carrick House a date between 1790 and 1810 and of Mr. David Freeman, Chartered Valuation Surveyor, who dated it in the late 18th or early 19th century.
63. He noted evidence of some very interesting work undertaken by the appellant in assembling estate records from the late 18th century onwards in order to try to satisfy the Court that the probability was that these buildings on the land were erected by the landlord. He traced in particular detail the leases from 1919, all granted by members of the Shirley family, who were the predecessors in title of the first-named respondent.
64. In his judgment in the constitutional case, he noted, in particular, the significance of the evidence regarding the level of rent, £55 per annum, reserved under the extension to the1919 lease. He accepted that there was “uncontroverted evidence that rents after the Second World war were significantly low, the implication being that £55 per annum can be seen as being not a bad rent at that time from the landlord’s point of view, and representing far more than it would have been if it were to be simply a ground rent in the accepted sense of that term.” He added that, in his view, “there is little question but that this rent was not a ground rent in the sense we have come to use that term.”
65. Nonetheless, when he came, in his judgment on the Circuit Court Appeal, to assess this evidence in the light of the presumption contained in section 10.2, he took the following view:
“In my view, given the wording of s.10(2) of the 1978 Act, and of the proviso, it would be necessary for the landlord to show conclusively, and certainly as a matter of almost inescapable probability, that the lessor or his predecessors in title erected the building, given that the proviso is clearly intended to be in ease of the tenant who has no manner or means of establishing the situation one way or another in relation to buildings which are so old.”
66. In his judgment in the constitutional case, the learned judge noted a submission made on the part of the appellant that this was an unreasonable and unfair burden to impose on a landlord. This was a reference to the burden of proof which the learned judge had adopted and applied in the ground-rents appeal. Counsel for the appellant had there submitted that the lessor was, thereby, required to prove, as opposed to satisfy, the Court as a matter of probability, that the lessor or a predecessor in title, erected the permanent buildings, which was an almost impossible task in most cases.
67. I also mentioned at the outset that the learned judge had declined to decide an important issue of interpretation of the legislation in the light of the Constitution. He took note of a submission made by counsel for the appellant that a wide interpretation should be given to the term “predecessor in title” appearing in section 10.2 so that the term would embrace also lessees whose leases expired resulting in the lessor regaining possession of Carrick House before creating a new lease or tenancy in favour of another tenant. He noted that, on such an interpretation, if it could be shown that, at any stage prior to the erection of the new buildings, Carrick House had come back into the possession of the Shirley estate, then it would not matter whether it was the Shirley estate or any lessee who erected Carrick House, since such a lessee whose lease expired would come within the wider definition of a “predecessor in title.”
68. The substance of the submission was that if a narrow and literal rather than a broad interpretation were to be accorded to the term “predecessor in title” this would involve an arbitrary transfer of benefit from the lessor to the lessee. The learned judge, however, expressed the view that it was “undesirable that he express any view on these particular submissions,” given the existence of the constitutional challenge to the legislation. He took the view that it was unnecessary [that he express any view] for the purpose of his determination of the issues on the facts of the Circuit Court Appeal. Consequently, he did not consider whether the double-construction rule should be applied. He appears simply to have adopted what he considered to be the literal construction. While he did not say so, it seems implicit that he was reserving the question of the interpretation to be considered in the constitutional action. Consequently, the learned judge made no decision, in the ground-rent proceedings, on whether the term “predecessors in title” should be given a broad interpretation, as proposed on behalf of the appellant.
69. The effect of the decision by the learned judge, on the interpretation of the Act in the Circuit Court Appeal, was, of course, that the matter had effectively been decided before the hearing of the constitutional claim. It was never reopened. The learned judge, in his judgment in the latter action, merely referred to the manner in which he had referred to this presumption in his earlier judgment. There does not appear to have been any question of reconsidering it in the light of the fact that this was now the constitutional action and that he had declined to consider a broader interpretation in his earlier judgment. He continued:
“Certainly it might have been possible to conclude from the evidence adduced by the plaintiffs that it was, as a matter of probability, the landlord rather than any lessee who erected Carrick House, but that was in my view an insufficient level of proof given the way in which the presumption is couched in the section.”
70. In the result, the appellant was driven to submit that the presumption, at least as it had been interpreted, was arbitrary and punitive, in as much as it appropriated to a lessee, and without proper compensation to the landlord, a benefit which that lessee does not deserve.
71. It is only right to say that the learned judge delivered two very thorough and considered judgments covering the two cases. Nonetheless, it seems clear that a consequence of the necessary segregation of the two issues, one being decided by way of appeal from the Circuit Court and the other in a plenary High Court action, was that the learned judge did not consider or decide upon the question of the correct interpretation of section 10.2 in the light of the presumption of constitutionality and the double-construction rule in either case.
72. As was made clear by Walsh J in the passage from the East Donegal case, cited above, a law “will not be declared to be invalid where it is possible to construe it in accordance with the Constitution…” In McDaid v Sheehy 1991] 1 I.R. 1 at page 19, Finlay C.J. referred to what he described as the “settled jurisprudence of this Court” as being against deciding an issue of constitutional validity in circumstances where the party making the challenge had not been prejudiceed or damaged by the impugned provision.
73. It is regrettable that, for the reasons I have described, the High Court did not, in either of its judgments decide the issue of the correct interpretation, in the light of the double construction rule, of the crucial provision of section 10.2 of the Landlord and Tenant (Ground Rents) (no. 2) Act, 1978. It is also true that, when the matter was raised on the hearing of the appeal, counsel for the appellant appeared reluctant to accept the invitation to argue it.
74. None of the foregoing dispenses this Court from its obligation to respect the constitutional principles which it has laid down affecting constitutional litigation. It must, to the extent that it is reasonably possible, examine impugned laws with a view to discerning whether a construction is open which renders the legislation compatible with the Constitution and only when confronted with a negative result embark on consideration of its compatibility with the Constitution.
75. I turn now to consider what should be the correct interpretation of the presumption expressed in section 10.2. It seems to me that two questions arise regarding the interpretation of the expression, “erected by the lessor or any superior lessor or any of their predecessors in title:
(a) does it exclude the possibility that an earlier unidentified lessor or lessee may have constructed part of the buildings in circumstances where the lessor was full owner of all interests?
(b) does the term “erected” exclude an interpretation that the lessor, by providing the buildings, should be treated as having erected them?
76. These questions are posed in a context where the lessee is seeking to avail of a statutory procedure enabling it to acquire compulsorily from the landlord the latter’s interest in the land the subject of the lease. What is at issue is whether the lessor should be compulsorily deprived of his property. Furthermore, as is clear from the evidence heard in the High Court, that acquisition will be at a price which is set by the legislation at a level very significantly below the value which the lessor would be able to obtain on the open market. What is at issue is the acquisition of the landlord’s property at a price fixed by the legislation so as to favour the purchaser and to the disadvantage of the seller.
77. In those circumstances, it must follow that the principle of the presumption of constitutionality comes into operation and, with it, the principle of double construction. If section 10.2 is reasonably open to an interpretation which is consistent with the appellant’s constitutionally protected property rights and, in that context less unfair and burdensome, that interpretation should be applied.
78. Two separate aspects of section 10.2 need to be examined: firstly, what meaning is to be attributed to the expression, “erected by the lessor or any superior lessor or any of their predecessors in title…?” secondly, what is the standard of proof?
79. In order to be consistent with the rights of the landlord, I believe a broad, indeed a commonsense, construction needs to be given to section 10.2.
80. It is easiest to address the issue by reference to the evidence. The predecessors in title of the appellant include Evelyn Charles Shirley and his predecessors in title. It is common case that, in the period from 1919 to some years after 1951 the premises consisted of the old Carrick House, a substantial residence in a country town. At the time of the grant of the lease of 1919, the lessor was the owner of the fee simple interest in the property. Carrick House had been built many years before, on the evidence probably about the year 1800. Carrick House necessarily had to have been built by some predecessor in title of Evelyn Charles Shirley, the lessor who granted that lease. Of course, at this interval of time, it is not possible to “prove” who built Carrick House and certainly not according to the standard of “almost inescapable probability” required by the learned trial judge in the Circuit Court Appeal. However, the predecessors in title of Evelyn Charles Shirley, as of 1919, must necessarily encompass all previous owners, whether lessors or lessees, since Evelyn Charles Shirley owned all interests in the property at that time. This is a conclusion reached as a matter of inference: there is no direct proof, but the logic seems to me to be so compelling as to inescapable.
81. This brings me to the second point. The word, “prove” in section 10.2 does not introduce any requirement above and beyond what is normally required to discharge a burden to prove on the balance of probabilities. Section 10.2 does not demand eyewitness or physical evidence. It does not preclude the use of inference. The learned trial judge, in his Circuit Appeal judgment, used the expressions, “conclusively,” and “almost inescapable probability,” in setting the standard of proof. Nonetheless, in the constitutional judgment, he acknowledged that it “might have been possible to conclude from the evidence adduced by the plaintiffs that it was, as a matter of probability, the landlord rather than any lessee …erected Carrick House…” The words of section 10.2 certainly impose a burden of proof on the landlord, the appellant in this appeal, to rebut a presumption. But there is nothing in the provision which goes beyond the normal test of balance of probabilities. Very clear words would be required to reach that result. If that were indeed the test, it would be difficult to resist the appellant’s argument that the test would be unfair and unduly burdensome.
82. In my view, it follows that the section, when interpreted in the light of the presumption of constitutionality, and the double-construction rule, would have enabled the appellant to point to the fact that, as of the date of grant of the leases of 1919 and 1945, its predecessor in title had gathered into their ownership all prior rights whether of lessor or lessee. It would thus have been able to rebut the presumption in section 10.2 of the Act of 1978 that the permanent buildings had not been erected by the lessor or its predecessor in title and defeat the application of the first-named respondent for the purchase of the fee simple in the property. The section, properly construed, would not, therefore, have affected the appellant, and it would not have any standing to challenge the section as being repugnant to the Constitution.
83. While the High Court considered the issue of the validity of the impugned sections, and this Court has heard the appeal against its judgment, the High Court did not decide the question of interpretation of the term predecessors in title, on which I have expressed my views. On the interpretation I have adopted, the appellant would not have been affected by section 10.2 and would not have been compelled to sell the fee simple in the property. For this reason, I would dismiss the appeal from the High Court but for the very different reason that the appellant would not have any standing to challenge the section as being repugnant to the Constitution.
84. I must end by emphasising that this conclusion has no effect on the decision of the learned trial judge on the Circuit Court Appeal. It is a matter for the parties and for the learned trial judge to consider what effect it has, if any.
Art 26 and the Employment Equality Bill 1996
Counsel on behalf of the Attorney General accepted that this was a drafting error and that the words “or where” should have been used instead of “unless”. The Court, however, approaches the constitutionality of the Bill on the assumption that a court, construing a provision of this nature, is entitled to transpose, interpolate or otherwise alter words in a statute, where the intention of the legislature is plain on the construction of the statute as a whole, in order to give effect to the statute and avoid manifest absurdity or injustice (see Halsbury’s Laws of England , 4th ed. vol. 44 at para. 862). The Court notes, however, that in a number of areas, of which this is the most conspicuous example, the draftsmanship of the Bill gives rise to some concern.
It was submitted by counsel assigned by the Court that the provisions of the Bill in this area in their application to employers were invalid having regard to Article 40, s. 1 acknowledging the equality of all citizens before the law and Article 40, s. 3 guaranteeing the unenumerated personal rights of the citizen to earn his or her livelihood and to protect his or her property rights from unjust attack.
At the outset, counsel drew attention to the wide ranging definition of”disability” in s. 2, sub-s. 1 of the Bill. In particular, it was suggested, the inclusion in “disability” of “disabilities which may exist in the future”meant that virtually the entire population was included in the term “person with a disability”. It followed that, despite the measure of relief intended to be afforded to employers, particularly those in the private sector, the burdens imposed on them were extremely onerous and so disproportionate to the results intended to be achieved, it was said, as to amount to a failure adequately to protect the rights of employers to earn their livelihood and also amounted to an unjust attack on their property rights.
In this context, it was submitted that the fact that employers were required to bear what could be significant costs involved in providing appropriate facilities for disabled employees without payment of compensation by the State constituted an unjust attack on their property rights within the meaning of Article 40, s. 3, sub-section 2. This, it was said, would present particular difficulties for small firms and the concessions envisaged in s. 35, sub-ss. 4 and 5 already referred to were insufficient to save the impugned provisions. It was pointed out that the assessment of whether these costs would cause “undue hardship” to the employer would ultimately be determined by the various agencies on which powers were conferred by the Bill and that even actual hardship might not be sufficient to win exemption, since they would be required to establish to the satisfaction of such bodies that there was “undue hardship”, whatever that might be held to mean.
It was finally submitted by counsel assigned by the Court that the exemption from these provisions of the Defence Forces, the Garda SÃochána and the prison service was in violation of the guarantee of equality in Article 40, section 1. It was urged that this exemption was impermissibly wide, since it was obvious that there were posts in each of the three services, such as desk jobs, which could be filled without any difficulty by persons suffering from disabilities which would disqualify them from performing the duties normally associated with these occupations. All of this, it was said, amounted to a discrimination between the public and private sectors which, given the extent of the discrimination, was unrelated to the objectives sought to be achieved and was irrational and arbitrary.
Counsel on behalf of the Attorney General submitted that these provisions were a delimitation of the exercise of the property rights of employers which had clearly been imposed by the Oireachtas with a view to reconciling the exercise of those rights with the exigencies of a particular aspect of the common good i.e. the promotion of equality between disabled and more fortunate citizens. As such, it was permissible by virtue of Article 43, s. 2, sub-s. 2 of the Constitution, unless it could be shown that the abridgement thus effected of property rights amounted to an unjust attack on those rights within the meaning of Article 40, s. 3, subsection 2. Counsel submitted that the absence of provision for compensation did not amount to such an unjust attack, citing in support the decisions of this Court in Dreher v. Irish Land Commission [1984] I.L.R.M.
94, O’Callaghan v. Commissioners of Public Works [1985] I.L.R.M. 364 and Cafolla v. O’Malley [1985] I.R. 486.
It was further submitted that, having regard to the well established presumption that the powers and discretions conferred by the Bill would be exercised by those to whom they were entrusted in a manner consistent with the provisions of the Constitution, the Court was entitled to assume that, in deciding whether particular persons had established that they would be occasioned “undue hardship” by compliance with the provisions of the Bill, the authorities concerned would be bound to act in a constitutional manner which respected the property rights of the employers concerned and if they failed so to act could be restrained by the courts.
As to the non-applicability of the provisions to the Defence Forces, the Garda SÃochána and the prison service, it was submitted that the distinctive and unique requirements as to physical and mental fitness of these particular branches of the public service rendered their removal from the scope of the Bill perfectly reasonable. While it was conceded that there were positions in each of the branches concerned which could more easily be occupied by persons with physical disabilities, it was said that these posts were in the main of a clerical nature and, as a matter of administration, those who held them were not regarded as being members of the Defence Forces, the Gardaà or the prison service as the case might be.
Counsel also drew attention to corresponding provisions in the legislation of other jurisdictions, such as the Americans with Disabilities Act, 1996, (United States), the Disability Discrimination Act, 1996, (United Kingdom), the Anti-Discrimination Act, 1991, (Queensland), the Human Rights Code (Ontario) and the Human Rights Act, 1984, (British Columbia). These contained somewhat similar provisions relating to disability without any corresponding right to compensation and, in the case of the United Kingdom, exempted the Armed Forces, the Police and the Prison Service. In the case of the United States legislation, the exemption extended to the entire public service. While it was accepted that the existence of such legislation in other jurisdictions was not in any sense determinative of the issue, it was submitted that it was of some assistance in enabling the court to determine whether the provisions in question were, as claimed by counsel assigned by the Court, so arbitrary and irrational as to be declared invalid.
In considering these submissions, the Court considers it necessary to set out in extenso the provisions of Article 43 of the Constitution. It provides that:
“1. 1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
It has been clear since the decision of this Court in Blake v. Attorney General [1982] I.R. 117 that this Article prohibits the abolition of private property as an institution but at the same time permits, in particular circumstances, the regulation of the exercise of that right. It does not deal with the citizen’s right to a particular item of property: those items are, however, protected from unjust attack by the provisions of Article 40, s. 3, sub-section 1.
The Court is satisfied that the provisions under consideration constitute a delimitation of the exercise by employers of a right protected by that Article, i.e. the right to carry on a business and earn a livelihood. It is also satisfied that these limitations have been imposed by the Oireachtas with a view to reconciling the exercise of the rights in question with a specific aspect of the common good i.e. the promotion of equality in the workplace between the disabled and their more fortunate fellow citizens. The issue which the Court has to resolve is as to whether the abridgement of those rights effected by these provisions constitutes an “unjust attack”on those rights in the case of individual employers, having regard to the manner in which it has been effected.
It is clear that, in determining whether the absence of any provision in the legislation under consideration for the payment of compensation constitutes such a “unjust attack”, the Court may have regard to whether the restriction, in the form in which it was imposed, is consistent with the requirements of “social justice” within the meaning of Article 43, s. 2, sub-section 1. In reading Article 43 of the Constitution it is important to stress the significance of the word “accordingly” which appears in Article 43, s. 2, sub-section 2. It is because the rights of private property “ought”in civil society to be regulated by “the principles of social justice” that the State may, as occasion requires, delimit their exercise with a view to reconciling it with the “exigencies of the common good”. It is because such a delimitation, to be valid, must be not only reconcilable with the exigencies of the common good but also with the principles of social justice that it cannot be an unjust attack on a citizen’s private property pursuant to the provisions of Article 40, s. 3 of the Constitution (see judgment of Walsh J. in Dreher v. Irish Land Commission [1984] I.L.R.M. 94).
Needless to say what is or is not required by the principles of social justice or by the exigencies of the common good is primarily a matter for the Oireachtas and this Court will be slow to interfere with the decision of the Oireachtas in this area. But it is not exclusively a matter for the Oireachtas. Otherwise, as was pointed out in the Buckley v. The Attorney General [1950] I.R. 67, Article 43 would appear, with Article 45, in the section of the Constitution devoted to the directive principles of social policy the application of which by the Oireachtas in the making of laws is withdrawn from the consideration of the courts.
The Bill has the totally laudable aim of making provision for such of our fellow citizens as are disabled. Clearly it is in accordance with the principles of social justice that society should do this. But, prima facie, it would also appear to be just that society should bear the cost of doing it. It is important to distinguish between the proposed legislation and legislation to protect the health and safety of workers. It is entirely proper that the State should insist that those who profit from an industrial process should manage it as safely, and with as little danger to health, as possible. The cost of doing the job safely and in a healthy manner is properly regarded as part of the industrialist’s costs of production. Likewise it is proper that he should pay if he pollutes the air the land or the rivers. It would be unjust if he were allowed to take the profits and let society carry the cost. Likewise it is just that the State, through its planning agencies, should insist that the public buildings and private buildings to which the general public are intended to have access for work or play should be designed in such a way as to be accessible by the disabled as well as by the able-bodied.
But the difficulty with the section now under discussion is that it attempts to transfer the cost of solving one of society’s problems on to a particular group. The difficulty the Court finds with the section is not that it requires an employer to employ disabled people, but that it requires him to bear the cost of all special treatment or facilities which the disabled person may require to carry out the work unless the cost of the provision
of such treatment or facilities would give rise to “undue hardship” to the employer.
There is no provision to exempt small firms or firms with a limited number of employees, from the provisions of the Bill. The wide definition of the term “disability” in the Bill means that it is impossible to estimate in advance what the likely cost to an employer would be. The Bill does provide that one of the matters to be taken into consideration in estimating whether employing the disabled person would cause undue hardship to the employer is “the financial circumstances of the employer” but this in turn implies that the employer would have to disclose his financial circumstances and the problems of his business to an outside party.
It therefore appears to the Court that the provisions of the Bill dealing with disability, despite their laudable intention, are repugnant to the Constitution for the reasons stated.
In view of what is said above it is not necessary for the Court to deal with the exemption of “employment” in the Defence Forces, the Garda SÃochána or the prison service from the disability provisions of the Bill. The Court does however find it difficult to understand why the clerical or civilian members of these services should be exempt.
Vicarious liability
Sections 14 and 15 of the Bill
The Court now comes to a consideration of ss. 14 and 15 of the Bill which provide:
“14. A person who procures or attempts to procure another person to do anything which
(a) constitutes discrimination which is unlawful under this Act, or
(b) constitutes victimisation for the purposes of Part V,
shall be guilty of an offence under this section.
15. (1) Anything done by a person in the course of his or her employment shall be treated for the purposes of this Act as done also by that person’s employer, whether or not it was done with the employer’s knowledge or approval.
(2) Anything done by a person as agent for another person, with the authority (whether express or implied and whether precedent or subsequent) of that other person, shall be treated for the purposes of this Act as done also by that other person.
(3) In proceedings brought under this Act against an employer in respect of an act alleged to have been done by an employee of the employer, it shall be a defence for the employer to prove that the employer took such steps as were reasonably practicable to prevent the employee
(a) from doing that act; or
(b) from doing in the course of his or her employment acts of that description.”
It is nowhere provided in the legislation that the actual perpetrator of an act of discrimination or victimisation is to be guilty of any offence. It is only a person who procures or attempts to procure another person to do something which constitutes discrimination or victimisation who can be guilty of an offence under section 14. Such a person must be proved in the ordinary way to have had mens rea i.e. an intention to commit the offence. It is strange and anomalous that the chief perpetrator of the act is guilty of nothing; it is only the person who procures or attempts to procure the deed who is to be arraigned. But just because a provision is strange or anomalous does not render it repugnant to the Constitution. It is, for example, only a civil wrong to trespass on another’s land but if there is a conspiracy to commit a trespass on another’s land that makes the conspirators guilty of a criminal offence. The Court concludes that s. 14 is not repugnant to the Constitution.
Coming to s. 15, the first inquiry that has to be made is whether it applies to criminal as well as to civil proceedings. It should be said that as regards the fixing of civil responsibility on an employer, s. 15 is unexceptional and accords with well established principles of fixing vicarious responsibility on employers for the wrongs of their employees. Counsel for the Attorney General submitted that the section does apply to criminal proceedings and invited the Court to say that if that submission is wrong, the provision might be saved under the “double construction” rule. cf:Kelly, The Irish Constitution, 3rd Ed., p. 458 et seq.
In the opinion of the Court the “double construction” rule can have no application to this section. The so called rule can only apply where there is an ambiguity or a choice between two constructions. If on a reading of the section the plain words are apparent, then the duty of the court is to give effect to a literal reading of the section. The section refers to”proceedings brought under this Act” which must include all forms of proceedings and that, in turn, includes criminal proceedings.
The Court has no entitlement to give a statutory provision a construction beyond its plain meaning. As the court said in East Donegal Co-operative Livestock Mart Ltd. v. Attorney General [1970] I.R. 317 at p. 341:
“It must be added, of course, that interpretation or construction of an Act or any provision thereof in conformity with the Constitution cannot be pushed to the point where the interpretation would result in the substitution of the legislative provision by another provision with a different context, as that would be to usurp the functions of the Oireachtas.”
It is clear that under s. 15 while the person procuring or attempting to procure the deed must have a guilty mind it is not necessary to show that the employer who is to be made vicariously responsible had any knowledge of the procurer’s actions. While it was submitted, both in the written submissions and in the oral presentation by counsel for the Attorney General, that sub-s. 3 provides an escape route of some description for an accused, this may not always be so.
While the debate before the Court was largely occupied by the inter-relation between ss. 14 and 15, it should be noted that s. 15 governs not only s. 14 but the other offence sections, viz. s. 10, sub-s. 4, s. 11, sub-s. 4, s. 61, sub-s. 4 and s. 63 where the possibility of applying sub-s. 3 is even more problematic.
Further, it is to be noted that the Court deals here with a question of vicarious liability: not absolute or strict liability. This distinction is important because many of the cases which proceeded on the basis that the master was being rendered liable for the wrong of the servant in a criminal context involved the failure on the part of the master to perform a personal dutythat is a duty imposed on a specified person by the relevant statute.
At common law a master was liable for the crimes of his servant in two circumstances only. The proprietor of a newspaper was liable criminally as well as civilly for libels published by his servants in conducting his newspaper even though he had not authorised their publication; but the Libel Act, 1843, permitted him to show that the libel was published without his authority and with no lack of care on his part. (See now s. 7 of the Defamation Act, 1961). The other exception at common law was that of public nuisance. This is an act which obstructs, or causes inconvenience or damage to, the public in the exercise of rights common to all the citizens.
Aside from these exceptions, the master was not liable for the crimes of his servant. In Huggins [1730] 2 Stra 882 the accused, the warden of the Fleet, was charged with the murder of a prisoner whose death had
been caused by the servant of Huggins’s deputy. It was held that, though the servant was guilty, Huggins was not, since the acts were done without his knowledge. Raymond C.J. said at p. 884:
“It is a point not to be disputed, but that in criminal cases the principal is not answerable for the act of the deputy, as he is in civil cases: they must each answer for their own acts, and stand or fall by their own behaviour. All the authors that treat of criminal proceedings proceed on the foundation of this distinction; that to affect the superior by the act of the deputy, there must be the command of the superior which is not found in this case.”
There were many exceptions created by statute over the years but they tend to be confined to what have been termed “public welfare offences”.Many of the nineteenth century cases turned on the liability of publicans. The reason for holding a publican liable for the crimes of his servant was that since the licence was personal to him and involved a commitment by him to run an orderly house then he should bear the consequences if the servant did anything wrong. The difficulty in granting any exemption to the licensee in such circumstances was illustrated in the judgment of Russell L.J. of Killowen in Commissioners of Police v. Cartman [1896] 1 Q.B. 655 at p. 658:
“We may take as an illustration the case of a sporting publican who attends race-meetings all over the country, and leaves a manager in charge of his public-house; is it to be said that there is no remedy under this section if drink is sold by the manager in charge to any number of drunken persons? It is clear that there is no machinery by which the person actually selling can be convicted; a penalty can only be inflicted on the licensee.”
The rationale behind this type of case is captured well in the judgments of the King’s Bench Division in Department of Agriculture and Technical Instruction v. Burke [1915] 2 I.R. 128.
The background facts to that case were that by s. 5, sub-s. 1 of the Weeds and Agriculture Seeds (Ireland) Act, 1909, an officer of the Department of Agriculture and Technical Instruction for Ireland was empowered to enter the shop or other premises of any person who sold agricultural seeds for sowing, and could examine and take samples of any agricultural seeds on the premises. By sub-s. 2 it was provided that the person on whose premises a sample was taken should if the officer required, give the name and address of the person from whom he procured the seeds, and if he refused to give such name and address, or willfully gave a false name and address, he should be guilty of an offence under the Act, and liable on summary conviction to a penalty not exceeding £10. It was held that the owner of the shop in which the sample was taken was guilty of an offence under the sub-section if such false name and address was willfully given by the manager of the business, although without the authority or consent of the principal.
Cherry L.C.J. said at p. 138:
“There is no doubt that the general principle of English criminal law is that a man is responsible only for his own acts, and not for those of his agents or servants unless he has expressly authorized them. A guilty knowledge or some unlawful intention is, as a general rule, necessary to constitute a crime. Nemo reus est nisi mens sit rea.The doctrine of the responsibility of principals for the acts of their agents does not usually apply in criminal proceedings. But there are numerous exceptions to this rule. The greater number of these exceptions grafted upon the general rule are cases in which it has been decided that, upon the construction put upon the language of particular statutes, criminal responsibility has been placed upon masters for the acts of their servants. These statutes are usually Acts, such as the Food and Drugs Act, and the Merchandise Marks Act, passed with the object of securing fair and honest dealing in retail trades, by regulations the enforcement of which rests with inspectors appointed by the Government. Cases under these statutes are very numerous. I need only refer to one or two as samples. In Pain v. Boughtwood 24 Q.B.D 353, decided in 1890, and followed by all courts ever since, it was held that a shopkeeper might be convicted under the Sale of Food and Drugs Act, 1875, of selling adulterated milk, though he was personally unaware of the adulteration at the time of the sale, and that it was unnecessary to prove a mens rea to support the conviction. No question arose in that case as to the responsibility of a master for the acts of his servant; but, in a more recent case of Commissioners of Police v. Cartman [1896] 1 Q.B. 655, it was held that a licensed publican might be convicted of selling intoxicating liquor to a drunken person, though the sale was made in his absence by a servant, contrary to his express directions. The ground of that decision was that in businesses usually carried on, not by the proprietors themselves but by servants on their behalf, the object with which the Acts were passed would be defeated unless the employers were held liable for the acts of their servants done within the scope of their employment. The reasoning upon which the decision under the Licensing Acts was based applies with full force to the statute under which the present proceedings are taken, and the case itself is a strong authority for holding that the decision of the magistrates in the present case is wrong. The seed trade, as well as the licensing trade, is carried on usually by salesmen in shops, and there can be no doubt that a manager giving to a Government inspector the information which the owner was bound to give on request, is acting within the scope of his authority. This at once brings the case within the line of authorities under the various statutes referred to in Coppen v. Moore [1898] 2 Q.B. 306, where, in the words of Lord Russell of Killowen ‘the Court, in fact, came to the conclusion that, having regard to the language, scope, and object of these Acts, the Legislature intended to fix criminal responsibility upon the master for acts done by his servant in the course of his employment, although such acts were not authorized by the master, and might even have been expressly prohibited by him’.
The respondent’s counsel in this case relied very strongly upon the decision of this Court in the case of Taylor v. Nixon [1910] 2 I.R. 94, but that case is clearly distinguishable from the present one. There, the offence charged was that of obstructing an inspector in taking a sample of whiskey, and the act done by the manager, for which it was sought to hold the publican liablenamely, breaking the bottlewas clearly one which could not possibly be held to come within the scope of his authority.”
While the Court is not now called upon to pronounce on the validity of such provisions, nevertheless, the Court is of the opinion that the conditions by which they may be held to pass muster under our present constitutional system is that they were part of the established legal order at the birth of the State as well as on the coming into operation of the present Constitution; they should essentially be regulatory in character; apply where a person has a particular privilege (such as a licence) or a duty to make sure that public standards as regards health or safety or the environment or the protection of the consumer, and such like, are upheld, and where it might be difficult, invidious or redundant to seek to make the employee liable.
However, what is sought to be done by this provision is that an employer, devoid of any guilty intent, is liable to be found guilty on indictment of an offence carrying a fine of £15,000 or a prison sentence of two years, or both such fine and imprisonment, and to be tainted with guilt for offences which are far from being regulatory in character but are likely to attract a substantial measure of opprobrium. The social policy of making the Act more effective does not, in the opinion of this Court, justify the introduction of so radical a change to our criminal law. The change appears to the Court to be quite disproportionate to the mischief with which the section seeks to deal.
In the course of his speech in Sweet v. Parsley [1970] A.C. 132 at p. 150, Reid L.J.the case dealt more with the concept of strict liability as opposed to vicarious liability, but what he had to say is equally pertinent to what the Court has to considerreferred to “the public scandal of convicting on a serious charge persons who are in no way blameworthy”.Of course, the English courts would have to recognise that if parliament decreed that a person should be found guilty in those circumstances, then the legislation might be upheld because parliament in the British system is said to be supreme.
Our situation, however, is totally different. We are governed by a Constitution with the separation of powers as its fulcrum and the two Houses of the Oireachtas are precluded from enacting any legislation which is in any respect repugnant to the Constitution.
The Court concludes that to render an employer liable to potentially severe criminal sanctions in circumstances which are so unjust, irrational and inappropriate would make any purported trial of such a person not one held in due course of law and, therefore, contrary to Article 38, s. 1 of the Constitution and also repugnant to the provisions of Article 40, s. 1 of the Constitution.
Section 16, sub-s. 4
Section 16, sub-s. 4 provides that nothing in the legislation shall be construed as:
“. . . requiring an employer to recruit, retain in employment or promote an individual if the employer is aware, on the basis of a criminal conviction of the individual or other reliable information, that the individual engages, or has a propensity to engage, in any form of sexual behaviour which is unlawful.”
It is clear that the Bill provides that none of its provisions requires an employer to recruit, or promote an individual if the employee has a past criminal conviction for unlawful sexual behaviour or it is considered on the basis of reliable information that he engages in, or has a propensity to engage in unlawful sexual behaviour.
Counsel assigned by the Court challenged s. 16, sub-s. 4 on the grounds that a person could be singled out on the basis of “reliable information” and that this is contrary to the guarantee of equality identified by the Court in King v. The Attorney General [1981] I.R. 233 and that an offence against the requirement that laws should be certain and that the language used (“reliable information”, “propensity”) is inherently uncertain.
It should be emphasised that the provision provides an exemption of which the employer is entitled to avail but, as submitted by counsel for the Attorney General, the Bill leaves unaffected any existing legal or constitutional remedies which an employee may have against an employer who, for example, dismisses him or fails to promote him: cf. Unfair Dismissals Acts, 1977 to 1993.
The legislation impugned in King v. The Attorney General [1981] I.R. 223 was s. 4 of the Vagrancy Act, 1824, as amended by the Prevention of Crimes Act, 1871, and the Penal Servitude Act, 1891, which provided:
“. . . every suspected person or reputed thief, frequenting (or loitering about or in) any river, canal or navigable stream, dock or basin, or any quay, wharf or warehouse near or adjoining thereto, or any street, highway or avenue leading thereto, or any place of public resort, or any avenue leading thereto, or any street, or any highway or any place adjacent to a street or highway, with intent to commit felony . . . shall be deemed a rogue and vagabond, within the true intent and meaning of this Act; and it shall be lawful for any Justice of the Peace to commit such offender (being thereof convicted before him by the confession of such offender, or by the evidence on oath of one or more credible witness or witnesses) to the House of Correction, there to be kept to hard labour for any time not exceeding three calendar months . . . and . . . in providing the intent to commit a felony it shall not be necessary to show that the person suspected was guilty of any particular act or acts tending to show his purpose or intent, and he may be convicted if from the circumstances of the case, and from his known character as proved to the Justice of the Peace or court before whom or which he is brought, it appears to such justice or court that his intent was to commit a felony . . .”
As Kenny J. observed in the course of his judgment at p. 263:
“It is a fundamental feature of our system of government by law (and not by decree or diktat) that citizens may be convicted only of offences which have been specified with precision by the judges who made the common law, or of offences which, created by statute, are expressed without ambiguity. But what does ‘suspected person’ mean? Suspected of what? What does ‘reputed thief mean? Reputed by whom? It does not mean a person who has been convicted of theft, for then ‘convicted thief’ would have been the appropriate words. So one is driven back to the conclusion that it is impossible to ascertain the meaning of the expressions. In my opinion, both governing phrases ‘suspected person’ and ‘reputed thief’ are so uncertain that they cannot form the foundation for a criminal offence.”
It will be seen immediately that the point at issue was totally different from what is in debate in this reference.
Whether particular information is “reliable” or whether a person has such a “propensity to engage in” the conduct to which s. 16, sub-s. 4 applies will, in the event of dispute, fall for resolution by the relevant tribunal or court and it may be taken as accepted that they will apply the well established standards of constitutional justice and fair procedures.
No doubt, the Houses of the Oireachtas conscious of the higher dangers of recidivism with regard to sexual crimes as well as the addictive character of certain sexual offences involving minors and so as to avoid a situation where persons convicted of such offences or with a clear propensity to engage in such behaviour could secure access to employment on an equal footing with other types of employees, provided by s. 16, sub-s. 5 that:
“Without prejudice to the generality of subsection (4), that subsection applies in particular where the employment concerned involves access to minors or to other persons who are vulnerable.”
The Court is of the view that it is concerned here with something that is clearly one of policy which the Houses of the Oireachtas are entitled to enact so as to afford employers a certain protection and this is justifiable on the grounds of prudence and safety. However, it should be observed that it is not every idle word that should be heeded by an employer. The employer in each case where a person’s suitability is called in question will need to make a proper value judgment having regard to all the circumstances; but if that judgment is exercised bona fide the employer should not be faulted just because it turns out to be wrong.
Certificate under s. 63
Section 63 states:
“(1) Any person who
(a) obstructs or impedes the Court, the Director or an equality officer in the exercise of powers under this Part, or
(b) fails to comply with a requirement of the Court, the Director or an equality officer given under this Part,
shall be guilty of an offence under this section.
(2) Any reference in subsection (1) to an equality officer includes a reference to a person authorised under section 58 (1) (a).
(3) In any proceedings for an offence under this section, a document purporting to be certified by the Director or to be sealed with the seal of the Court and relating to the circumstances in which the offence is alleged to have occurred shall be received as prima facie evidence of the facts stated therein.”
Submissions
Counsel assigned by the Court submitted that the provisions of s. 63, sub-s. 3 are unlike any other provision in a criminal statute where the offence can be proved by a certificate (potentially based on hearsay of an authorised officer’s evidence) without the requirement that the author of the certificate attend to give evidence and be cross-examined on the facts stated in the certificate. It was submitted that s. 63, sub-s. 3 envisages the whole of the prosecution’s case being on the certificate, that the certificate would set out the facts of the offence and that there would be no need for more evidence thereafter. Thus, on the presentation of the certificate recording the circumstances of the offence to the court and on receipt thereof by the judge there would be no other element of the offence to be proved by the State. The accused must thereafter give evidence or suffer the consequences.
Counsel pointed out that the person making the certificate may not himself have been the person involved in the events and yet he may certify from information he has received from others. Counsel submitted that the effect of this process is to shift the persuasive burden of proof to the accused. As such, it was submitted, the section is unconstitutional being in violation of the constitutional right to trial in due course of law.
Counsel for the Attorney General submitted that s. 63, sub-s. 3 provides merely for the reception of certain evidence and that it remains open to the accused to counter the effect of such evidence in any number of ways: that the weight (if any) to be attached to the document rendered admissible by s. 63, sub-s. 3 remains at all times a matter for the trial judge. Counsel submitted that s. 63, sub-s. 3 does not purport to shift the legal burden of proof. Further, it was argued that the challenge to the validity of the section must fail in view of case law. Unlike the position in Maher v. Attorney General [1973] I.R. 140, where the statute in issue s. 44 of the Road Traffic Act, 1968, purported to make a certificate of blood or urine alcohol concentration “conclusive evidence” that the concentration was as specified, s. 63, sub-s. 3 does not purport to make any document decisive or conclusive evidence. It was submitted that it was incorrect to suggest that s. 63, sub-s. 3 should not be interpreted as enabling an accused to be convicted without having an opportunity to cross-examine his accuser. It was submitted that where the contents of a certificate are put in issue it is clear that the court in which the prosecution is being conducted retains the power to require the attendance of the persons involved to give oral evidence (and be cross-examined) and that it must be presumed that the court will adopt this course where it is appropriate to do so to ensure that the constitutional rights of the accused are vindicated. Reliance was placed on Hardy v. Ireland [1994] 2 I.R. 550; O’Leary v. The Attorney General [1993] 1 I.R. 102, [1995] 1 I.R. 254; Lennon v. Judge Clifford [1996] 2 I.R. 590; O’Callaghan v. District Judge Clifford [1993] 3 I.R. 603. Counsel concluded that the assertion that s. 63, sub-s. 3 is unconstitutional has no substance.
The section
Section 63, sub-s. 1 creates the offences of obstructing or impeding the court, the director or an equality officer in the exercise of powers under Part V of the Bill, or failing to comply with a requirement of the court director or an equality officer. An equality officer includes a person authorised by the director or the chairman under s. 58, sub-section 1 (a). The constitutional issue arises on s. 63, sub-section 3. That sub-section refers to “any proceedings for an offence” under the section; that is a criminal trial. It relates to “a document purporting to be certified by the Director or to be sealed with the seal of the Court” and thus plainly stated includes documents relating to circumstances whether or not the director (in the case of his purported certification) had direct knowledge of the information being certified or not. The sub-section defines the content of the document as:
“relating to the circumstances in which the offence is alleged to have occurred”.
The words are clear and all-embracing. They do not refer to peripheral matters. They do not refer to scientific or technical issues. On the face of the section and in the plain meaning of the words they refer to all the circumstances in which the offence is alleged to have occurred, the whole case.
Article 38, s. 1
Article 38, s. 1 of the Constitution states:
“No person shall be tried on any criminal charge save in due course of law”.
Trial in due course of law includes the constitutionally protected concept of the right to have a fair trial. A trial in due course of law is one wherein the rights of the individual are protected and yet they may be limited in a fair and just way for the benefit of society. In The Criminal Law (Jurisdiction) Bill, 1975 [1977] I.R. 129, O’Higgins C.J. said of Article 38, section 1 at p. 152:
“The phrase ‘due course of law’ requires a fair and just balance between the exercise of individual freedoms and the requirements of an ordered society.”
The sub-section raises a fundamental matter wider than either the presumption of innocence or the shifting of an evidential burden of proof. It concerns the essence of a constitutional criminal trial. Historically trials, whether in summary form or on indictment, have proceeded viva vocealthough documentary evidence and inferences therefrom may be part and parcel of the trial. It is a fundamental principle in our system that, in general, criminal trials are conducted on viva voce evidence. In In Re Haughey [1971] I.R. 217 at p. 261 Ó Dálaigh C.J. stated:
“In a criminal trial, evidence must be given orally; a statute may authorise otherwise . . .”
Whereas viva voce evidence is the norm in the majority of cases, proof by written statement is allowed in certain circumstances but with the consent of the accused, and, in other cases, certificates may provideprima facie evidence of specific issues of a scientific or technical nature. Such limitation of viva voce evidence is reasonable in circumstances where the nature of the evidence is, for example, technical and by its form appropriate in a certificate, as such form means that, for example, many technicians and officials are not required to be called to court in each case. A reasonable balance is obtained.
Counsel for the Attorney General relied on case law for their proposition that the section is constitutional. However, the cases they relied upon may be distinguished from the issues in this case.
Precedent
In Hardy v. Ireland [1994] 2 I.R. 550 at issue was s. 4, sub-s. 1 of the Explosive Substances Act, 1883, which provides that any person who
“. . . knowingly has in his possession or under his control any explosive substance, under such circumstances as to give rise to a reasonable suspicion that he . . . does not have it in his possession or under his control for a lawful object, shall, unless he can show that he . . . had it in his possession or under his control for a lawful object, be guilty of felony . . .”
In analysing s. 4, sub-s. 1 of the Explosive Substances Act, 1883, Hederman J. stated at p. 564:
“In my judgment, in a trial alleging an offence under the section the prosecution has to prove beyond reasonable doubt (I take the basic ingredients contained in the section and I leave aside alternate wording):
(1) That the accused knowingly had in his possession a substance which it proves is an explosive substance;
(2) that he had it under such circumstances as to give rise to a reasonable suspicion that he did not have it in his possession for a lawful object and that, in turn, means that there is an onus on the prosecution to prove that the accused could not show that he had it in his possession for a lawful object.
Once those ingredients are in place, it is still open to the accused to demonstrate in any one of a number of ways, such as by cross-examination, submissions or by giving evidence, that a prima facie situation pointing to his guilt should not be allowed to prevail.
I believe that this analysis complies with our well-established criminal law jurisprudence in regard to having trials in due course of law. That constitutional requirement applies whether the offence is made an offence under a pre- or post-constitutional enactment. It protects the presumption of innocence, it requires that the prosecution should prove its case beyond all reasonable doubt; but it does not prohibit that, in the course of the case, once certain facts are established, inferences may not be drawn from those facts and I include in that the entitlement to do this by way even of documentary evidence. What is kept in place, however, is the essential requirement that at the end of the trial and before a verdict can be entered the prosecution must show that it has proved its case beyond all reasonable doubt.”
This case is distinguishable from the situation under the proposed s. 63, sub-section 3. The evidential burden of proof did shift to the accused. But the elements of “knowingly” in his “possession”, the proof of an explosive substance, the circumstances giving rise to a reasonable suspicion of it not being in possession by the accused for a lawful object, were highlighted by Hederman J. and have not comparable components in the proposed situation under s. 63, sub-section 3. Also, the very nature of the offence of possession of explosives places it in a special category.
The conclusion that once certain facts are established that inferences may be drawn from documentary evidence does not provide a precedent for the proposition where it is proposed that an entire case be proved by way of a certificate. To hold that there may be documentary evidence from which inferences may be drawn is not to say that the proof of a case may be by certificate.
In O’Leary v. The Attorney General [1995] 1 I.R. 254 at issue was the constitutionality of s. 24 of the Offences Against the State Act, 1939, which states:
“On the trial of a person charged with the offence of being a member of an unlawful organisation, proof to the satisfaction of the court that an incriminating document relating to the said organisation was found on such person or in his possession or on lands or in premises owned or occupied by him or under his control shall, without more, be evidence until the contrary is proved that such person was a member of the said organisation at the time alleged in the said charge.”
The plaintiff claimed in that case that since he, like every other person accused of a criminal charge, had a right to the presumption of innocence which right was constitutionally protected, the section infringed that right and was unconstitutional. The Supreme Court recognised that in certain instances the evidential burden of proof shifts to the accused. However, O’Flaherty J. stated at p. 266:
“Courts, whether comprising a judge sitting with a jury or a judge or judges only, will not act as automatons in the assessment of evidence. With a statutory provision setting out what is to be regarded as evidenceand whether it is called a presumption or not is of no moment the court must always approach its task in a responsible manner and have proper regard to the paramount place that the presumption of innocence occupies in any criminal trial.”
The above case is an authority on the shifting of the evidential burden of proof. However, it does not address the issue raised by s. 63 of an entire case, the circumstances of the offence, being proved on a single certificate where the certifying person may have been informed of the incident only and not have been a party thereto. Indeed, it speaks to the very antithesis of such a circumstance in its reference to “automatons”.
Counsel also submitted that O’Callaghan v. District Judge Clifford [1993] 3 I.R. 603 was an authority for their argument. This is not so. InO’Callaghan the sole issue was the adjournment of the case: there was no decision on the constitutionality of offences prosecuted by way of certificate. Finlay C.J. stated at p. 614:
“Having regard to that decision and to the fact that the appeal before this Court was determined on the issue indicated in the judgment which has just been delivered by Denham J., it does not become necessary for this Court to enter upon any consideration of the constitutional validity of s. 94, sub-s. 9 of the Finance Act, 1983. It has not done so. It does not give any decision on that question.”
Consequently, contrary to the argument of counsel for the Attorney General, the cited case law is no aid to their submissions.
Due process
The essential question posed is whether it is constitutionally valid to have a case of the nature proposed conducted and concluded on the basis as provided in s. 63, sub-section 3. It is proposed to apply the certification process to a criminal trial on issues of obstructing or impeding named bodies as well as to the matter of failing to comply with a requirement of named bodies. The question of whether there has been an obstruction or an impeding of a body or whether there has been a failure to comply with a requirement of a named body are issues likely to give rise to sharp conflict of evidence. They are also matters totally distinct from issues either scientific or technical or other such capable of or amenable to prima facie proof by certification.
These issues of “circumstances” are not amenable to resolution by certificate, much less a certificate in the purported form. The idea that a criminal trial could proceed from beginning to end concluding with a verdict of guilty on the production of a document is inconsistent with the concept of trial in due course of law. The use of a certificate as proposed in s. 63, sub-s. 3 is to do more than prove evidence of certain technical matters by certificate. It is a document which may be certified by a person with no personal knowledge of or involvement in the events in issue. It purports to relate to all the facts of the offence. No other evidence may be anticipated.
Proof by way of certification is an interference with the norm of a trial viva voce. A certificate is an appropriate form of proof when it is proportionate to the ends to be achieved. It is a justifiable method of proof when the process is, for example, of a technical nature and there are other issues before the court.
It is a question of whether the constitutionally guaranteed right to trial in due course of law has been interfered with and if so whether it has been limited in a reasonable and justifiable manner appropriate to the circumstances. It is clear that in s. 63, sub-s. 3 there is an interference with the right to a trial in due course of law. The issue is whether the intrusion is constitutional.
The objective of the legislation is a laudable social policy. However, nothing inherent in that policy or in the nature of the legal rights granted by the legislation renders it necessary to have the remedy in the form proposed. It is neither rational nor necessary to so limit the right of due process to achieve the objective of the legislation.
In effect a form of proportionality test must be applied to the proposed section. (a) Is it rationally designed to meet the objective of the legislation? (b) Does it intrude into constitutional rights as little as is reasonably possible? (c) Is there a proportionality between the section and the right to trial in due course of law and the objective of the legislation? A similar test was used by the Canadian Supreme Court in R. v. Oakes [1986] 1 S.C.R. 103 and Chaulk v. R. [1990] 3 S.C.R. 1303. Applying this test to s. 63, sub-s. 3 it is clear that s. 63, sub-s. 3 is not specifically designed to meet the objectives of the Bill. The process is not rationally connected to the objective. The process of certification is an intrusion into the constitutional rights of an accused, yet there is no rational reason why trial by certification process is necessary in this type of case. Thus, there is no proportionality between the process of trial by certification and the objective of the Bill and the limitations of the right to trial in due course of law. The objective of equality in employment does not require that the offence in issue be tried by the method set out in s. 63, sub-section 3. The intrusion, the interference in the due course of law, is not limited in a rational way. Or to put it a slightly different way, s. 63, sub-s. 3 when read in the context of the Bill is a failure to protect the constitutional rights of the citizen and not warranted by the objectives which it is sought to secure: see Cox v. Ireland [1992] 2 I.R. 503 at p. 523.
The use of such a certificate is so contrary to the concept of affording a person a trial in due course of law as to render the provision contrary to Article 38, s. 1 of the Constitution. Accordingly, on this ground, the Court finds the provision repugnant to the Constitution.
Inviolability of the dwelling
It was submitted by counsel assigned by the Court that s. 58 of the Bill was repugnant to Article 40, s. 5 of the Constitution which provides that:
“The dwelling of every citizen is inviolable and shall not be forcibly entered save in accordance with law.”
Section 58, sub-s. 2 (a) empowers a “designated officer” i.e. the Director of Equality Investigations, the Chairman of the Labour Court, an equality officer or a person authorised in that behalf by the Director or the Chairman “at all reasonable times, peaceably [to] enter premises.”
This may only be done for the purpose of enabling information to be obtained which the Director or the Labour Court may require to enable them to exercise their functions under Part V of the Bill. The power may only be exercised in the case of a dwelling where, under s. 58, sub-s. 4, either the Minister (or an authorised officer of the Minister) certifies in writing that there are reasonable grounds for believing that there is in the dwelling information which is material to the investigation of a case or a consideration of an appeal under Part V or the Circuit Court makes an order to the same effect. These provisions do not authorise any search to be made of the premises so entered.
The only provision for a forcible entry of any premises, including a dwelling, is where a judge of the District Court is satisfied by information on oath of a designated officer that there is reasonable cause for suspecting that any records, books, documents or other things containing material information are to be found on the premises and the judge issues a search warrant.
The Court is satisfied that these provisions confer powers on the Director, the Labour Court and the Minister which are reasonably necessary to enable them to carry out investigations for the purpose of enforcing the relevant provisions of the Bill and, authorising as they do the forcible entry of a dwelling house only where a court issues a search warrant on the basis of sworn evidence, are not repugnant to Article 40, s. 5 of the Constitution .
The right to silence
It was further submitted by counsel assigned by the court that s. 59, sub-s. 3 of the Bill which imposes a duty on persons required to attend before the Director or the Chairman of the Labour Court,
“(a) to answer fully and truthfully any questions put to them by the Director or the Chairman (other than any question tending to incriminate the person asked); and
(b) if so requested by the Director or the Chairman to sign a declaration of the truth of their answers to any such questions”
was repugnant to Article 40, s. 3 of the Constitution as failing to protect an unenumerated right of the citizen, i.e. the privilege against self incrimination.
As is clear from the opening words of s. 59, sub-s. 1, the powers given to the Director or the Labour Court under this section are conferred on them so as to enable them to exercise their functions under Part V of the Bill.
The Court is satisfied that they are reasonably necessary in order to enable the Director and the Labour Court to exercise those functions and, having regard to the express saver contained in sub-s. 3 (a), do not in any way encroach on any privilege of the citizen against self incrimination. The Court is accordingly satisfied that the provisions in question are not repugnant to the Constitution.
Remaining provisions of the Bill
The Court has considered the remaining provisions of the Bill and is not satisfied that it has been established that any of them is repugnant to the Constitution or to any provision thereof.
Conclusions
The decision of the Court, therefore, is that the provisions of the Bill hereinbefore indicated are for the reasons stated herein repugnant to the Constitution.
The President will be so informed.
I certify this to be the judgment and decision of the Supreme Court pronounced on the 15th May, 1997.
Bupa Ireland Ltd & Anor -v- Health Insurance Authority & Ors
[2006] IEHC 431 (23 November 2006)
MacKechnie J
293. The Government has decided that a core principle of private health insurance in this country should be community rating across the market. In addition it has legislated for open enrolment, lifetime cover and minimum benefits. The belief is that this system is for the general good and will result in all persons, irrespective of health status, age or gender, being able to obtain cover at affordable prices. The objective of risk equalisation, as has been repeatedly stated, is to support this community rating -across the market. It does so by way of inter generational solidarity. The State’s belief is that without a risk equalisation scheme there are potential vices which could seriously disturb the ordinarily functioning of this type of system. In fact, full support for the attachment of a risk equalisation scheme, with such a system is forthcoming from several international studies as well as from a variety of other expert opinion. The report of the Advisory Group is clear-cut in the necessity for a risk equalisation scheme. As referred to earlier in this judgment, the report also quoted similar supporting views which it had received from many of those who made submissions to it during the course of its work. The White Paper comprehensively endorses the Government’s position on this regulatory framework. Mr. Barrett in his affidavit evidence repeated the objective of the scheme and the justification therefor. He referred to the danger of cherry picking which in my view is a real danger and is capable of leading to the existence of a significant difference in risk profile between insurers. Community rating and open enrolment are not in themselves sufficient to guard against this. Risk selection, consciously or sub consciously can lead to this undesirable result. Such a situation is not sustainable even in the immediate term. It can lead to practices such as shadow pricing, excessive profits and more sinisterly a death spiral resulting in market instability. For the purposes of this case it is not essential to determine the precise academic parameters of what constitutes a death spiral. In my view there is sufficient evidence of a compelling nature to support this possibility occurring. There cannot be an obligation on the State to defer corrective action until the presence of a worst case scenario is established. In my opinion therefore, the availability of a risk equalisation scheme, which depending on circumstances may or may not be activated, has been in principle justified as being a necessary measure to underpin the operation of the regulatory regime in this country. There is no doubt in my mind but that a collapse of the private market would heavily impact on the availability of public health services. Therefore the creation of a risk equalisation scheme, pursuant to s. 12, is in my view a pressing and substantial need in a free and democratic society. I believe that the provision of such a scheme, (in a regulated market) and its impact on the property rights of BUPA is a regulation of the exercise of those rights in accordance with the principles of social justice and that the limitations placed on such rights are essential in the common good. Such rights are not absolute and their exercise may be curtailed when balanced against the common good. (See paras 242 – 245 supra).
294. The State has always put forward, as a justification for this scheme, the maintenance of community rating. In this regard much has been made of the phrase inter-generational solidarity. In my view this expression is purely descriptive and helps to explain a means by which such community rating in fact operates. It is no more than that and otherwise the correct statutory phase is ‘community rating across the market’. In any event Mr. Barrett evidence is that community rating across the market, and the stability of private medical insurance in this country would be extremely vulnerable without risk equalisation. A scheme is therefore essential to remove the incentive of insurers to target young people, and in that way to drive their own profits, rather than to concentrate on creating efficiencies in the many areas still open to them.
295. In the context of justification the State aid decision of the Commission, dated the 13th of May 2003 although given under Article 87, is highly relevant for its views on the necessity and proportionality of the risk equalisation scheme. Full support for the position of the respondents on the necessity of the scheme, is evident from the contents of para. 50, which speak, of the operation of risk selection either by design or by accident, of the disparity in claims costs if in fact an insurer should be left with a higher proportion of the less healthy individuals than its competitor, and of the possibility of significant market instability leading to an erosion of public confidence. At para. 52 it concludes that RES “is necessary to underpin the principles enforced by the Irish authorities …It ensures that risks are shared appropriately across the market and allows for a level playing field in respect of the particular constraints of the Irish system. If, as an alternative the Irish PMI market were risk rated, the RES would not be necessary”.
296. The decision also deals with the proportionality of the scheme in paras. 53 to 59 inclusive. It agrees that the design of this scheme restricts payments to what are “strictly necessary” to neutralise the differences in risk profiles. Moreover as part of its proportionality analysis, it refers to the criteria which must be met before the scheme is activated and in particular to the role of the HIA’s as well as the Minister’s, which varies depending on the threshold which the MEP should be at, at any given time. Moreover it highlight to the level at which benefits were equalised and comments upon the exclusion of the luxury elements of the VHI’s plans. In addition it points out that an insured was able to retain its own claims costs with the resulting benefit which that entailed. The exclusionary period for new entrants and the phasing in time thereafter were also mentioned. It concluded therefore that the scheme had passed both the necessity and the proportionality test. With this conclusion I respectfully agree.
297. For the reasons above given I am satisfied that the respondents have discharged the justification and the objective justification test which they must in order to succeed in defending these proceedings. Moreover the impact upon BUPA’s constitutional rights are required within the terms of Article 43 and therefore do not amount to an unjust attack under Article 40.3. In conclusion therefore I dismiss these proceedings.
Private Motorists Provident Society Ltd and Joseph Moore v Attorney General
1981 No. 210
Supreme Court
6 May 1983
[1984] I.L.R.M. 88
(O’Higgins CJ, Finlay P, Walsh, Henchy and McCarthy JJ)
6
O’HIGGINS CJ
delivered the JUDGMENT OF THE COURT on 6 May 1983 saying: The first-named plaintiff (hereinafter referred to as ‘the Society’) is a society registered under the Industrial and Provident Societies Acts. The second-named plaintiff (hereinafter referred to as ‘Mr Moore’) is a shareholder in, and a member of the management committee of the Society.
The Society was incorporated and registered in 1958. It engaged in the business of banking in accordance with its powers as a society registered under The Industrial and Provident Societies Act 1893 (the Act of 1893). This business, which consisted in the acceptance and holding of deposits from members and the making of loans to members, expanded steadily over the years and at the date of the commencement of these proceedings £13,700,000 were deposited with the Society and advances to members totalled £11,700,000. The Central Bank Act 1971 (the Act of 1971) made provision for the licensing and supervision of banks by the Central Bank of Ireland. By s. 7 the securing of a licence from the Central Bank and the maintenance of a deposit therein were made essential to the carrying on of a banking business by any person. S. 7(4), however, specifically exempted industrial and provident societies from the requirements of the section and accordingly the Society’s banking business did not come under the control or supervision of the Central Bank. This banking business continued to be free of legislative control until the passing of The Industrial and Provident Societies (Amendment) Act 1978 (the Act of 1978) which by s. 5(2) prohibits industrial and provident societies, such as the Society, from accepting or holding deposits after the end of a period of five years commencing at the passing of the Act (15 November 1978). It is clear that if this prohibition takes effect it will be virtually impossible for the Society to carry on a banking business and its ability to make a profit will be severely limited. The Society and Mr Moore have brought these proceedings seeking a declaration that the Act of 1978 is invalid having regard to the provisions of the Constitution. This claim, having failed in the High Court, has been renewed in this Court by way of appeal.
The Act of 1978
The Act of 1978 is intended to amend earlier legislation dealing with industrial and provident societies. It is divided into four parts. Part I deals with interpretation. Part II deals with industrial and provident societies. Part III deals with credit unions and Part IV deals with miscellaneous matters. Despite the generality of the declaration sought by the plaintiffs it is clear that the invalidity alleged arises only in respect of Part II and in particular in relation to s. 5(3). This and some other sections contained in Part II require to be noted. S. 5 provides as follows:
5.—
(1)(a) This subsection applies to a society which was not incorporated before 4 October 1978, or which on that date was incorporated and either had not accepted deposits the aggregate of which on that date did not exceed £25,000.
(b) A society to which this subsection applies shall not accept deposits.
(2) Subject to subsection (3), a society other than a society to which subsection (1) applies shall not accept or hold deposits after the end of the period of five years commencing at the passing of this Act.
(3)(a) The Minister, after consultation with the Central Bank may, by regulation, extend the period of five years referred to in subsection (2) for such further period or periods as he considers appropriate having regard to the public interest.
(b) Regulations under this subsection may apply to a specified class or classes of society denoted by such matters as the Minister thinks fit and different periods may be specified for different classes of society.
(c) Every regulation made under this subsection shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annuled accordingly, but without prejudice to anything previously done thereunder.
Subsection (1) applies to newly incorporated societies and to older societies which were accepting deposits on a comparatively small scale. Subsection (2) applies to the older societies which were accepting deposits on a larger scale and in particular applies to the Society. Accordingly, unless the period of five years is extended by regulation made under subsection (3) the Society’s power to accept and hold deposits will cease on and after 15 November 1983. By s. 6 a prohibition is imposed on the raising of loans by societies, but by subsection (4) of the section the prohibition will not apply to a loan made to a society by a bank. S. 10 which empowers the registrar to regulate in various ways the banking business of a society applies to the Society during the permitted continuance of its banking business. Other sections of Part II also apply but are not relevant to the issues raised on this appeal.
The position of the Society and Mr Moore in relation to the claim of invalidity
The case for invalidity which the plaintiffs seek to establish rests on two allegations. In the first place it is contended that the impugned legislation and, in particular, s. 5(2) thereof contravenes the provisions of Art. 40.3 of the Constitution in that it constitutes an unjust attack on property rights. In the second place it is contended that the legislation is an interference with the freedom of association which is guaranteed to citizens by Article 40.6.1° (iii) of the Constitution. This case has been put forward on behalf both of the Society and Mr Moore. The rights which are alleged to have been infringed are among the personal rights which the Constitution guarantees to citizens. The Society is a creature of statute law and it is argued that as such it does not enjoy that constitutional protection. However, Mr Moore as a citizen is entitled to complain if the impugned legislation interferes with any of his personal rights. This he does in the claim that both his property rights and his freedom of association have been violated. In the circumstances it is unnecessary to decide the question of the Society’s rights. The court does not therefore express any opinion on this question.
Mr. Moore’s rights as a shareholder
Mr Moore’s complaint with regard to a violation of his property rights is based on the fact that he is a shareholder in the Society. As such he claims that any attack upon the business or profitability of the Society is indirectly an attack upon his shareholding therein. For this reason he claims that, to the extent that the impugned legislation unjustly limits and prohibits the business of the society and thereby affects its profitability, it damages his investment as a shareholder and constitutes an attack upon his property rights. This claim is contested by counsel for the Attorney General who, while denying that the impugned legislation is in any way unjust, specifically disputes Mr Moore’s claim that, as a shareholder in the Society, his property rights are affected by legislation which applies only to the Society and to its business. He submits that a shareholder in an incorporated body such as the Society, while he has various contractual rights in and against that body, arising from his investment, has no property rights in its assets or business. In the opinion of the court it is sufficient that as a shareholder Mr Moore has, to the extent of his investment, an interest in the Society and contractual rights arising therefrom. This interest and these contractual rights are property rights which belong to Mr Moore and which are capable of being harmed by injury done to the Society. The court, therefore, rejects the submission made on behalf of the Attorney General that as a shareholder in the Society Mr Moore has no property rights capable of being invoked for the purposes of Article 40.3 of the Constitution. The court’s acceptance of the argument put forward by Mr Moore on this point is in accordance with the judgment of Kenny J in the Central Dublin Development Association and Others v Attorney General 109 ILTR 69 and with that of O’Keeffe P and this Court in East Donegal Co-Operative v Attorney General [1970] IR 317. The court will therefore consider the question of the validity of the impugned legislation having regard to its effect on Mr Moore’s property rights as a shareholder in the Society.
The claim that the impugned legislation constitutes an unjust attack on Mr Moore’s property rights
The case for invalidity as a violation of property rights has been argued on the basis that the prohibition contained in s. 5(2) constitutes an unjust attack on the property rights thereby affected contrary to Article 40.3 of the Constitution. Upon its incorporation and registration in 1958 the Society was, subject to the provisions of the 1893 Act, free to engage in the business of banking. Initially its activities were confined to a form of vehicle damage insurance cover for members. Gradually, however, with the object of financing an insurance company, it commenced taking deposits and the business of banking. The evidence established that the Society made steady prograss in its banking business, and, the express exclusion of such from the control imposed on the business of the commercial banks by the Act of 1971, probably encouraged its members to expect that such freedom from control would continue indefinitely. It appears from the evidence that at the time of the enactment of the 1971 Act the amount of banking business done by industrial and provident societies was small and only the Society and one other were involved. Some years later, however, the position had changed dramatically. By 1977 a large number of such societies were engaged in banking and the amount of business being done by them was considerable. At the trial of this action in the High Court the Attorney General called a witness from the Department of Industry and Commerce and one from the Central Bank. Their evidence related to the public concern and interest in the control of banking and to the proper criteria to be followed in exercising such control. On this evidence the learned trial judge came to the following conclusions:
1. It is in the public interest that banking business should be regulated according to the principles of sound banking practice.
2. The criteria applied by the Central Bank (in addition to the statutory requirements under the 1971 Act) when deciding whether to grant a licence are those which are required for sound banking practice and are reasonable.
3. None of the industrial and provident societies taking deposits in 1976 and 1977 were operating their businesses according to these principles.
4. The reason why industrial and provident societies were exempted by s. 7(4) of the 1971 Act from the restrictions imposed by s. 7(1) on persons other than licensed banks carrying on banking business was because there were only two societies in 1971 carrying on a small business with no appreciable risk to the public at large.
5. The reason why the acceptance or holding of deposits by industrial and provident societies was prohibited by the Act was because all of them were operating what was effectively a substantial banking business outside the control of the Central Bank without regard to the principles of sound banking practice and the general public who placed money on deposit with the societies was at risk.
6. The Minister had a legitimate interest and concern to protect members of the general public who would not have the commercial awareness of banking institutions in relation to making deposits.
It is in the light of these findings, based on the evidence at the trial, that the allegation that the impugned legislation constitutes an unjust attack on the property rights affected must be considered. Counsel for the plaintiffs have submitted that if the effect of this legislation is to interfere with the banking business of the Society to the extent of wholly eliminating it, without any compensation, this amounts to an unjust attack on the property rights thereby affected. They assert that this is the reality of what the legislation implies in so far as the Society is concerned. The prohibition on the acceptance or holding of deposits from its members will cut the Society off from a source of cheap money. While the Society could still borrow money from a bank such loan would be on such terms that it would severely reduce the business, and the profitability thereof, which the Society could transact. Also while the Society could in accordance with the provisions of the 1893 Act avoid the prohibition contained in s. 5(2) by converting into a company and seek a licence to engage in banking, there would be no guarantee that such a licence would issue. Accordingly, they submit that the impugned legislation amounts to an expropriation of the Society’s business in banking without compensation and is on that account an unjust attack on the property rights of shareholders.
The court does not accept these submissions. The prohibition contained in the impugned section is not an expropriation of the business of the Society or of the property rights of its shareholders. It is a regulation and control of the range of business which the Society may lawfully transact. The Oireachtas is bound to legislate having regard to the requirements of the common good. It is clear from the conclusions of the learned trial judge on the evidence she heard that the regulation and control effected by the legislation was reasonable, and was in accordance with the public interest and with the requirements of the common good. It cannot, therefore, be regarded as an unjust attack on property rights.
Accordingly, the plaintiff’s claim that the impugned legislation is invalid having regard to the provisions of Article 40.3 fails.
The alleged breach of the right of association
Mr Moore also alleges that the prohibition on the Society from accepting or holding deposits is an infringement of his right to associate with others in the formation and running of a society for such a purpose and is contrary to the provisions of Article 40.6.1° (iii) of the Constitution. In effect, he contends that the Society was formed for this purpose and to prohibit it by law from doing what he and his associates joined together to achieve is to frustrate the right to associate. The removal of the power to engage in the business of banking, it is contended, destroys the profitability of the Society and renders worthless the exercise of the right of association.
The court does not regard this contention as sustainable. Mr Moore’s right to associate with others has not been interfered with. The exercise of such a right is not prevented by a law limiting and controllnig in the public interest what such an associate may do. In this instance the law which is impugned does no more than to regulate what the Society or association may do and this is not an infringement of Article 40.6.1°(iii) of the Constitution. The challenge to the validity of the law on the basis of an alleged infringement of this Constitutional provision also fails.
Accordingly, this appeal is dismissed.
Richard O’Brien v Bord na Mona and the Attorney General
1981 No’s 201 & 205
Supreme Court
9 December 1982
[1983] I.L.R.M. 314
O’HIGGINS CJ
delivered the judgment of the Court on the Constitutional issues on 9 December 1982 saying: By order dated 18 March 1981 made in these proceedings by Keane J in the High Court, it was declared that ss. 29 and 30 of the Turf Development Act, 1946 are invalid having regard to the provisions of the Constitution. Against the declaration both the Defendants have appealed to this court.
The Turf Development, Act 1946 is the statute setting up Bord na Mona. S. 29 provides that the Board of Bord na Mona for the purpose of exercising or performing any of its functions may do all or any of a number of things including the acquiring of any land either permanently or temporarily and either by agreement or compulsorily and also the acquisition of various rights in or over land. S. 30 provides that any time before conveyance or ascertainment of price or compensation the Board may, subject to provisions with regard to notice and to the eventual payment of compensation, and for the purpose of exercising or performing all or any of its functions, enter on and take possession of any land or exercise any right in land or terminate, restrict or interfere with interests in land.
The duties of the Board as set out at s. 17 of the Act of 1946 are:
(a) to produce and market turf and turf products; and
(b) to foster the production and use of turf and turf products; and
(c) to acquire bogs and other lands; and
(d) to manage, develop and work bogs and other lands vested in the Board, and
(e) generally to do all such other things as arise out of or are consequential upon the duties mentioned in the preceding paragraphs of this section.
The long title to the Act of 1946 is as follows:
An Act to make better provision for the development in the national interest of the production, distribution and supply of turf in the State and for this purpose to establish a Board to be called Bord na Mona, to define its powers and duties, to dissolve the Turf Development Board Limited and to transfer its property and liability to Bord na Mona and to provide for certain other matters connected with the matters aforesaid.
The plaintiff is the owner of a farm of land containing approximately 376 acres in Co. Westmeath which includes an area of bogland.
In November 1978 Bord na Mona published an advertisement in the newspapers indicating their intention to acquire certain lands scheduled to the advertisement, including approximately 132 acres of bogland the property of the plaintiff. In pursuance of that advertisement and of a right of objection indicated in it, the plaintiff objected and had meetings and correspondence through a solicitor with the officials of Bord na Mona. On 21 March 1980 the Board of Bord na Mona resolved compulsorily to acquire the bogland, the property of the plaintiff, and in June 1980 Bord na Mona served on the plaintiff a notice of their intention to enter and take possession of the land occupied by him, the subject matter of the decision to acquire pursuant to s. 30 of the Act.
The plaintiff in these proceedings firstly sought a declaration that ss. 29 and 30 of the Act of 1946 were repugnant to Articles 40 and 43 of the Constitution, and further claimed a series of declarations that steps taken or purported to be taken by Bord na Mona to acquire compulsorily the said lands and to enter on or take possession of the said lands were unlawful and in excess of their powers under the Act of 1946, and were taken or purported to be taken in breach of rules of natural and constitutional justice.
This judgment of the Court is concerned only with the claim for a declaration as to the invalidity of the two sections having regard to the provisions of the Constitution, and individual judgments in relation to the other claims will be delivered. The grounds on which the plaintiff in his pleadings alleged the invalidity of the sections were firstly that they failed to respect, defend and vindicate the personal rights of the plaintiff as guaranteed by Art. 40.3, and secondly that they contravened the plaintiff’s right to private ownership of his lands as guaranteed in Art. 43.
It is clear from the judgment of the learned trial judge that the submissions made on the facts in the High Court on behalf of the plaintiff with regard to the allegation that the sections were unconstitutional were firstly, that the absence in the statute of an express provision requiring Bord na Mona to give notice of their intention to make a compulsory acquisition order was a failure to protect and vindicate the property rights of the plaintiff in breach of Art. 40.3, and constituted an interference with the plaintiff’s right of ownership of his property, not required and beyond the requirements of the common good, in breach of Art. 43. Secondly and in the alternative, it was submitted that the absence of any procedure contained in the Act of 1946 for appeal against the making of a compulsory acquisition order or for the confirmation by an external authority or outside tribunal of the making of a compulsory acquisition order constituted a breach of both the Articles concerned.
The learned trial judge rejected the first of these submissions, basing his decision on the principles laid down by this court in the East Donegal Co-Operative v The Attorney General [1970] IR 317. In that case it was held that it is to be presumed that it was intended that proceedings, procedures, discretions and adjudications which were permitted, provided for or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice. The learned trial judge found that there was nothing in the Act of 1946 which prevented Bord na Mona in proceeding compulsorily to acquire lands to give due notice of their intention so to do and to create a machinery for the proper making and consideration of objections or representations concerning such proposed acquisition. He accordingly held that the Act could not be found to be unconstitutional on those grounds. Against that portion of his judgment and that decision there has been no cross appeal in this case nor indeed in the view of this court could one have been sustainable.
The learned trial judge did, however, hold that the act of Bord na Mona in making a compulsory acquisition order was a judicial and not an administrative act, and that the power contained in the Act of 1946 enabling them so to decide without any form of appeal or confirmation by an external tribunal or authority violated the maxim of natural justice and constitutional justice that no man should be a judge in his own cause.
It is against that decision on the facts proved and on the terms of the statute that the appeal to this court on this issue arises. The Act of 1946 having been enacted by the Oireachtas subsequent to the Constitution is of course entitled to a presumption of constitutionality in accordance with the principle repeatedly laid down by this court.
The correctness of the decision of the learned trial judge upon which he based his view that ss.29 and 30 of the Act of 1946 were inconsistent with the Constitution depends upon his conclusion as a matter of law having regard to the terms of the statute that Bord na Mona in making a decision to acquire these lands was performing a judicial rather than an administrative act. In the case of Murphy v The Corporation of Dublin [1972] IR 215 the issue which was before the court was the right of the Minister for Local Government (as the relevant Minister then was) to claim an executive privilege in relation to the report of an Inspector submitted to him pursuant to the provisions of the Housing Act, 1966 as the result of a public enquiry into objections made against the confirmation of a compulsory purchase order.
The decision in that case was to the effect that the Minister in exercising his powers under the Housing Act, 1966 was doing so as a persona designata under that Act, and that he therefore was not exercising one of the executive powers of the State, and could not accordingly claim an executive privilege in relation to the report on foot of which he exercised the power. In the judgment in the High Court in this case, particular reliance was placed upon the portion of the judgment of Walsh J, with whose judgment all the other members of the court agreed, where at p. 238 he stated:
by statute the Minister is the one who has to decide the matter — not the Inspector. In doing so the Minister must act judicially and within the bounds of constitutional justice.
In the context of the issues which arose for determination before the court in Murphy v The Dublin Corporation this court is satisfied that the statement quoted decided that the Minister in confirming a Compulsory Purchase Order was bound to act judicially. It was not an expression of opinion that the confirmation was a judicial rather than an administrative act.
In a great number of instances, persons carrying out acts which are clearly in their essence administrative (and particularly in cases where such acts affect property rights) have under our law an obligation to act fairly, and in that sense, judicially in the carrying out of those acts and in the making of the decisions involved in them. They can and will be reviewed, restrained and corrected by the courts if they act in a manner which is considered to be arbitrary, capricious, partial or manifestly unfair. In that sense it can be said that such persons carrying out administrative acts have an obligation to act judicially, but so to say does not determine the question as to whether within the category of different functions they are administrative actions or judicial actions; cf Fisher v The Irish Land Commission and the Attorney General [1948] IR 3; McDonald v Bord na gCon and The Attorney General [1965] IR 217 and Loftus v The Attorney General [1979] IR.
In the view of the court it is necessary in this case to examine and consider the structure and intention of the Act of 1946 in order to determine whether Bord na Mona in making a decision to acquire land or property rights compulsorily is exercising a function or power of a judicial nature. If it is then it cannot be a judge in its own cause. But, on the other hand, if it is acting in discharge of an administrative function it would have an obligation to act fairly and properly but would not necessarily be inhibited from deciding the question as to whether or not to acquire.
The long title of the Turf Development, Act 1946, and the provisions of s. 17 of the Act which have already been quoted, make it clear that the purpose of the statute was to make available the considerable natural resource of turf in this State in the best possible fachion for the use of the nation. Both on the terms of the statute itself and indeed on the events which have since occurred in the development of the activities and work of Bord na Mona it is clear that the dominant method by which that overall purpose was to be achieved and has been achieved was by the acquisition of boglands and other ancilliary lands by Bord na Mona and the working of them by Bord na Mona itself so as to produce turf and turf products. It seems clear that it was by this procedure that a major source of energy was intended to be and has in fact been harnessed for the use of society in general. The control of this operation, and specifically the decision as to whether any particular piece of land should or should not be acquired, vests ultimately under the terms of the statute in the Board. The members of the Board, the Chairman and the Managing Director are appointed by the Government and hold office at the will of the Government.
The statute must, therefore, be viewed as constituting a decision that the common good requires that bogland should be available for compulsory acquisition. The task of securing that objective was vested in Bord na Mona a statutory corporation.
Viewed in that light, it would appear clear that the decision as to whether or not any particular area of land should be acquired for the attainment of that objective should be effectively vested in Bord na Mona. There is not any other authority of the State, executive or judicial, which should make the decision in principle as to whether, balancing the desirability of the production of turf on the one hand, and the interests of an individual owner of land on the other, the production of turf or the agricultural interests of the landowner should prevail.
Such a view of the purpose and effect of the state does not vest in Bord na Mona an arbitrary or capricious power. Nor is it exempt in any way from review by the courts should it in any particular instance act from an indirect or improper motive or without due fairness of procedure or without proper consideration for the rights of others.
This court is satisfied that, subject to these very considerable restrictions, the making of or refusal to make an order for compulsory acquisition is essentially an administrative act.
Having reached that conclusion, the court is further satisfied that neither the absence of a right of appeal from the decision of Bord na Mona to acquire a particular area of land or property right, as distinct from the right to review the exercise of that right, nor the absence of a scheme for a confirming external authority constitutes a breach of any of the plaintiff’s constitutional rights.
Therefore the decision of the court is that ss. 29 and 30 of the Turf Development Act, 1946 are not invalid having regard to the provisions of the Constitution, on the grounds relied upon, and that the declaration made in the High Court to the contrary effect must be set aside.
FINLAY P
(O’Higgins CJ, Walsh, Henchy and Griffin JJ concurring) delivered his judgment on the remaining issues on 9 December 1982 saying: The plaintiff in addition to the claim made by him that the impugned sections of the Turf Development Act, 1946 were inconsistent with the Constitution, which has been dealt with in the judgment of the court, also claimed in the alternative that even assuming the constitutionality of those provisions that the defendants Bord na Mona, on the facts of this case, acted in excess of their powers and otherwise than in accordance with natural and constitutional justice in the procedures which they adopted prior to the making of a decision compulsorily to acquire his land.
Although the learned trial judge having declared the sections to be inconsistent with the Constitution did not make any order on this claim, he expressed the view in his judgment that on the facts proved in this case that the Board of the defendants, Bord na Mona, had made the ‘compulsory purchase order’ without having considered the substance of the plaintiff’s objection to it, and that in so doing they acted in breach of natural justice and constitutional justice and in particular in breach of the maxim audi alteram partem.
The defendants, Bord na Mona, in their Notice of Appeal appealed against that finding by the learned trial judge on the grounds that he erred at law or on the facts or on a mixed question of law and fact. Against that finding of the learned trial judge no appeal was submitted on behalf of the Attorney General.
Although the appeal by the defendants Bord na Mona against this finding is stated to be on the grounds that the learned trial judge erred on the law and on the facts, it seems clear that individual findings of fact which were made by him are not seriously challenged on behalf of these defendants. On a consideration of the transcript they could not be held to be unsupported by the evidence.
Those facts may thus be shortly summarised:
1. These defendants published a notice in the local and national press in October 1978 of their intention to consider making an order to acquire permanently and compulsorily certain lands scheduled and of the fact that a map showing the lands proposed to be acquired together with a book of reference containing the names of the owners had been deposited in their Head Office and at the Garda Siochana station in Athlone where they were available for inspection. The advertisement informed persons wishing to make representations or objections of their right to do so in writing to the secretary of these defendants on or before 4 December 1978.
2. The plaintiff having seen a copy of that advertisement instructed his solicitors to write to the secretary of these defendants on 30 November 1978 simply objecting to the proposed compulsory acquisition.
3. The plaintiff subsequently summoned a meeting of other persons affected and formed a body called the ‘Fardrum IFA Bog Committee’ on whose behalf a different firm of solicitors wrote to the secretary of these defendants on 1 December 1978 objecting to the compulsory acquisition. This letter stated strictly without prejudice the right of the Committee and its individual members to outline and put forward further detailed grounds of objection; that they were indicating the general grounds of objection. These grounds of objection which were set out in five paragraphs were in a sense general in nature and applicable to all the owners of the lands proposed to be acquired.
4. As a result of that letter, a meeting took place on 15 February 1979 at which the plaintiff and one other member of the Committee together with their solicitor Mr. Egan were present, and at which these defendants were represented by Mr. Huggard, a senior Land Purchasing Officer and a Mr Cranny, another officer of the defendants.
5. At that meeting, the plaintiff made it clear to the representatives of these defendants that while he fundamentally objected to his lands being acquired at all, if they had to be acquired he objected to their acquisition in fee simple, and gave reasons why it was his desire that he should not lose his ownership of the lands, but that at the end of whatever period was necessary for the removal of peat by these defendants the land in a cut-away condition should revert to him. He was informed by Mr Huggard at that meeting that it was the policy of these defendants to acquire the fee simple of boglands, and reasons were given for that policy but Mr Huggard agreed to refer the matter to his principals.
6. Mr Huggard subsequently ascertained from the managing director of these defendants that the policy of acquiring the fee simple only in bogland which had been operated by these defendants for some time was unchanged.
7. On 21 March 1980 the Board of these defendants met and there was submitted to them a report from the managing director dated 11 February 1980, setting out the lands proposed to be acquired; stating that he had considered each of the objections to the making of a compulsory purchase order; and recommending that the Board make an order for the permanent and compulsory acquisition of the lands delineated on a map annexed to that report. Also accompanying the report was a schedule setting out the names of the occupiers and the particulars of the objections.
8. The objections thus notified to the Board of these defendants were in short the objections contained in the letter written on behalf of the Committee on 1 December 1978, and no reference was made to the particular objection to the acquisition of the fee simple of the lands made by the plaintiff at the meeting with Mr Huggard and Mr Cranny.
9. Having considered this report, schedule and map, the Board of these defendants decided to accede to the recommendation of the managing director, and compulsorily to purchase the plaintiff’s lands in fee simple.
I am satisfied that the requirement for fairness of procedure and compliance with the rules of natural and constitutional justice in relation to the exercise of a power compulsorily to acquire land falls into two separate categories.
Firstly, the acquiring authority must before deciding to acquire any particular piece of property give ample and fair notice to the owner of such property of its intention so to do; give to him an ample opportunity of making representations or objections; consider such representations or objections in a judicial manner and finally reach a decision whether to acquire or not upon the basis of that consideration. The second category of requirement is that the acquiring authority having decided compulsorily to acquire, must, with like reasonable notice and opportunity to be heard and make representations, arrive by a fair procedure at a proper compensation for the acquisition.
A consideration of the terms of ss. 30 to 36 of the Turf Development Act, 1946 makes it clear that the provisions with regard to notice and the making of objections or representations contained in those sections are referrable to the second of the categories which I have outlined above, and are clearly designed towards the ascertainment of fair compensation. The Act does not appear to contain any set or fixed procedure for the giving of notice and hearing of objecttions or representations concerning the decision to acquire. In accordance with the principles laid down by this Court in the judgment concerning the constitutionality of the sections and previously laid down by this Court in Loftus v The Attorney General [1979] IR and East Donegal Co-Operative v The Attorney General [1970] IR 317, it is necessary for these defendants to create and carry out procedures in relation to the decision to acquire which are fair and in accordance with natural and constitutional justice.
It is in my view clear that the decision as to whether or not to acquire compulsorily land is a decision to be made by the Board of these defendants, and is not a function which may be delegated by the Board to the Managing Director or any other officer or servant of the Board under s. 16 of the Act. This interpretation of the statute appears to have been accepted by these defendants for it was by a decision and resolution of the Board that the acquisition was ordered.
In the light of that conclusion, what was necessary for compliance with fair procedure and natural and constitutional justice, was firstly that the plaintiff as the owner of land affected should have ample and sufficient notice of the intention or proposal to make a compulsory acquisition. Secondly, that he be given an ample and sufficient opportunity of making objections or representations to that proposal and thirdly, that the objections and representations, if any, made by him or on his behalf be communicated adequately to the Board of these defendants, and judicially considered by them before they make a decision. On the facts proved in this case where the plaintiff noticed and reacted to the advertisement published in the press the first of these requirements was complied with. I would point out, however, that this view does not mean that the publication of an advertisement in the press would in every case be a sufficient notification without in addition the service of an individual notice on the owner or reputed owner.
Again on the facts of this case, the plaintiff was given a sufficient opportunity of making his objections and representations known to the servants of these defendants.
I would, however, agree with the learned trial judge in his finding that there was never brought to the notice of the Board of these defendants prior to their deciding to acquire these lands the precise objection of the plaintiff that his lands should be acquired for such period only as was necessary for the extraction of the peat from them, and thereafter should revert to him or his successors.
From the transcript it is clear that evidence was given on behalf of these defendants in the High Court of an unchanged and apparently unchanging policy to acquire the fee simple of boglands, and that reasons of substance were given for the existence of that policy. It is not part of the function of this court nor was it part, as was properly decided in the High Court, of the function of the High Court to decide on the wisdom of such a policy. It is equally clear, however, in my view that where, as occurred in this case, there is a failure by the deciding authority properly to hear the objections and representations of the owner of the land before deciding to acquire it, that that deficiency cannot be repaired by subsequent proof that even if such representations and objections had been heard and considered it is improbable that a different decision would have been reached. A necessity for the observance of fair procedure and natural justice in the process of the compulsory acquisition of property is too fundamental and important to be supplied by proof that if objections had been entertained they would have been rejected.
Whilst therefore it may be true as was contended on behalf of these defendants that if the present acquisition order is set aside and a further acquisition process instigated that the result will be the same as far as the plaintiff is concerned, I am satisfied that the plaintiff is nonetheless entitled to a declaration that the procedures were not in accordance with natural justice, and that accordingly the purported resolution to acquire the lands is null and void. Unless these defendants give undertakings to this court which are acceptable regarding their intention not to proceed further with either the acquisition based on their order made in March 1980 or with an entry pursuant to that order upon the lands of the plaintiff, the plaintiff would also appear to be entitled to ancilliary injunctions. I would therefore dismiss the appeal of these defendants on this aspect of the case and vary the order of the High Court accordingly.
CDDA Limited v AG
The Central Dublin Development Association Limited. Cecil F. Hollinshead, M. Rowan & Company Limited, Barry J. Hardy Limited and Mary W. O’Brien v The Attorney General
High Court
6 October 1969
[1967 No. 1909P]
[1975] 108 I.L.T.R 69
Kenny J.:
The Local Government (Planning and Development) Act, 1963, (“the Act”) was passed by the Oireachtas on the 7th of August, 1963, and came into operation on the 1st of October, 1964 It contains 92 sections (many of which are divided into 7 or more sub-sections) which are grouped into 8 parts and 5 lengthy schedules. As the constitutional validity of many of its provisions has been attacked in this action, it is necessary to give an outline of the important parts of it. It is expressed in the title as having been passed “to make provision, in the interests of the common good, for the proper planning and development of cities, towns and other areas … to make certain provisions with respect to acquisition of land and to repeal the Town and Regional Planning Acts, 1939”.
One of its main objects was to impose on planning authorities an obligation to make plans for their areas and their permission was made necessary for any development so that they could ensure that the objectives of the plan would be carried out. Other objects were to secure the renewal of obsolete areas in cities and towns, to give planning authorities control over the use of buildings and land and to create powers to enforce the development plans and to give compensation to the owners of property who had suffered loss because they had not been granted planning permission.
Part I of the Act includes a lengthy definition section on which “obsolete area” is defined as “an area consisting of land (in this definition referred to as the principal land) which, in the opinion of the planning authority, is badly laid out or the development of which has, in their opinion, become obsolete, together with such land contiguous or adjacent to the principal land as, in the opinion of the planning authority, is necessary for the satisfactory development or user of the principal land.”“Development” is defined in s. 3 as “the carrying out of any works on, in, or under land or the making of any material change in the use of any structures or other land.”“Use”, is is stated, “in relation to land does not include the use of the land by the carrying out of any works thereon”. In a number of sections the references to the provisions of the development plan are, until the plan is made, to be construed as references to the provisions which the planning authority consider will be included in the plan. Part II deals with financial provisions. Part III imposes on every planning authority an obligation to make a plan for their area within three years from the 1st of October 1964 or such longer period as the Minister might allow. It is to consist of a written statement and a plan indicating development objectives for the area: these must include aims “for the use solely or primarily … of particular areas for particular purposes” …, for the convenience and safety of road users, for the development and renewal of obsolete areas and for the preservation of amenities. Each planning auhority must review its plan once at least in every five years and make any change in it which they think proper. Section 21 contains elaborate provisions for the publication of notice of the preparation of the draft plan and for the consideration of objections to it. Part IV deals with the control of development and provides that the permission of the planning authority is required for any development except “exempted development” (defined in any earlier section) and except development which was commenced before the 1st of October, 1964, and for the retention of a structure which was in existence on that date and for which permission had not been obtained under the earlier Town. The carrying out of development for which permission had not been obtained is made a criminal offence. The planning authority may grant permission for the development, or may attach conditions to it or may refuse it but when making their decision, they are restricted to considering the proper planning and development of their area and an appeal for their decision may be brought to the Minister for Local Government (“the Minister”). He is to consider the application as if it had been made to him originally and his decision annuls that of the authority. They may also give permission for the retention of “an unauthorised structure” which is defined in the Act. When permission to develop land is refused by the authority or is granted subject to conditions, the owner may serve a notice requiring them to purchase his interest in the land if the land has become incapable of reasonably beneficial use in its existing state or if it cannot be made capable of this by the carrying out of any other development or if the conditions attached to the development have made this impossible and the authority are then bound to purchase the land at the price fixed by agreement or under the Acquisition of Land (Assessment of Compensation) Act, 1919 (“the Act of 1919”) as amended by the Act. The planning authority may revoke or alter a permission granted by them before the work or the change of user has been carried out.
Section 31 gives the authority power to serve a notice requiring the person who has carried out development without permission to restore the land to the condition it was in before the work was done and section 32 gives them similar powers when the conditions on which permission was given have not been observed. They are also given power to serve a notice in relation to what was “an unauthorised structure” on the 1st of October, 1964. Failure to comply with an enforcement notice served under sections 31, 32 or 33 is a criminal offence. Section 36 gives them power to serve a notice requiring the removal of any structure except some which were unauthorised and section 37 gives them power to serve a notice requiring the discontinuance of a specified use of land or the imposition of conditions on that use. They have to keep a register showing applications for planning permission or retention of structures, their decisions and the decisions of the Minister on appeal. Part V deals with amenities and gives the authority powers to preserve trees and create public rights of way over land and makes the deposition of litter in a public place a criminal offence.
Part VI deals with compensation. Section 55 provides that the planning authority shall be liable to pay compensation to a person the value of whose interest in land has been reduced by a decision under Part IV of the Act refusing permission to develop or granting it subject to conditions. Section 56 excludes compensation in certain cases; paragraph (a) of sub-section 1 seems at first reading to exclude compensation in almost all cases for it reads “Compensation under section 55 of this Act shall not be payable (a) in respect of the refusal of permission for any development that consists of or includes the making of any material change in the use of any structures or other land” but the definition section providing that “use in relation to land does not include the use of the land by carrying out of any work thereon” limits the wide language of paragraph (a) Compensation is not payable if permission is refused because of a deficiency in water supplies or sewerage nor is it payable in eight other cases defined in the sub-section. This sub-section is a good example of the complexity of modern legislation: it consists of one sentence containing (if one treats numerals as words) 644 words so that it is easy to forget the beginning of it before one reaches the end. Section 58 gives the Minister power to allow the payment of compensation when sub-section (1) of section 56 or section 57 would prevent this if he is satisfied that it would not be just and reasonable to refuse compensation because of those provisions. If agreement cannot be reached about the mount of compensation, it is to be determined by arbitration under the Act of 1919 as if the claim arose in relation to compulsory acquisition of land and the rules in that Act in relation to assessment of compensation are altered.
Part VII deals with the acquisition of land. Section 74 provides that where land is vested in a planning authority but not for the purposes of their functions under the Act and they are satisfied that it should be available for these, they may, with the consent of the Minister, appropriate the land for any of the purposes under the Act. They are also given power to sell, lease or exchange any land acquired or appropriated by them for the purposes of the Act and to extinguish public rights of way. Section 77 which has been much discussed during this case gives the authority power to develop or secure the development of land including obsolete areas which they may develop or renew and to provide open spaces in them. They are also given power to provide sites for the establishment or relocation of industries and for houses, offices, shops, schools, churches and factory buildings and the powers of compulsory acquisition which they had at the time of the passing of the Act under the Local Government (No. 2) Act 1960 are extended to include any structure and any interest or right in or over land. Section 79 provides that the right to a new tenancy given by Part III of the Landlord and Tenant Act 1931 and that to a reversionary lease given by the Landlord and Tenant (Reversionary Leases) Act, 1958, is taken away if the landlord is a planning authority and the property is included in an obsolete area in the development plan. If a tenant who was using the property wholly or partly for business purposes does not get a new tenancy because of the change in the law made by section 79, he will be entitled to compensation for disturbance as the parts of the Landlord and Tenant Acts giving this have not been altered.
The parts of the Constitution which the plaintiffs say makes much of the Act unconstitutional are under the heading “Fundamental Rights”. Under the sub-heading “Personal Rights”Articles 40 section 3 provides:
3. 1º. The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2º. The State shall, in particular by its laws protect as best it may from unjust attack and in the case of injustice done, vindicate the life, person, good name and property rights of every citizen”.
Under the sub-heading of “Private Property”Article 43 provides:
43. 1.1º. The State acknowledge that man, in virtue of his rational being, has the natural rights, antecedent to positive law, to the private ownership of external goods.
2º The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath and inherit property.
2.1º. The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2º. The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
Under the sub-heading “Religion”Article 44 provides:
“44.2 6º. The property of any religious denomination or any educational institution shall not be diverted save for necessity works of public utility and on payment of compensation”
Mr. Conolly has said that it is impossible to reconcile the two Supreme Court Decisions in Buckley v. The Attorney General [1950] I.R. 67 and the Attorney General v. Southern Industrial Trust Limited, decided in 1957 but reported only in (1960) 94 I.L.T.R. 161, and has invited me to decide which of them I will follow. I agree with him that the reasoning in the two decisions is contradictory. In the first Mr. Justice O’Byrne emphasised that the Courts had the duty to decide whether an Act of the Oireachtas had been passed with a view to reconciling the exercise of property rights with the exigencies of the common good while, in the later case, Mr. Justice Lavery said that the existence in 1957 of many statutory provisions for forfeiture of goods without compensation had the consequence that the Courts had to accept them as having been passed to delimit the exercise of property rights with a view to reconciling their exercise with the exigencies of the common good and that they were therefore valid. Before I make the (for a High Court Judge) embarrassing decision as to which of them contains the correct principle, some features of these Articles must be mentioned.
Article 25, section 5. 4º. of the Constitution provides that in case of conflict between the texts in Irish and English of any copy of the Constitution enrolled in the Supreme Court, that in the national language is to prevail and while there may not be a conflict between the two texts of Article 43 s. 1 1º and s. 2 2º, the one in English seems to me to be a most unhappy attempt to reproduce the meaning of that in Irish. The phrase “ de cheart nádúrtha . . maoin shaolta a bheith aig dá chuid féin go priobháideach ” (I take the text which is stated to have been enrolled in the Supreme Court on the 25th of March, 1942), means, I think, “a natural right to his own private share of worldly wealth” and not “the natural right to the private ownership of external goods”. The word “ownership” in the English text is, I think, misleading because there is no known legal right of ownership. There is a bundle of rights which, for brevity, is called ownership. The owner of a share in a company has the contractual rights against the company which the articles of association give him and we inaccurately call all of them, viewed together, ownership while the owner of a leasehold interest in land has those rights which the lease and the law give him. But some of these rights which together constitute ownership have been affected by legislation which did not provide for compensation and nobody has ever suggested that the Rent Restriction Acts or the Landlord and Tenant Acts (which profoundly modify the right of the owner of an interest in land to use it as he wills) are made unconstitutional by Article 43 or that the Constitution requires that owners should be compensated for the loss caused to them by the reduction in the amount of rents which they can get. I should add that counsel for the Attorney General have admitted that land is included in the phrase “external goods”.
Another source of confusion in the English text is the use in Article 43 2 2º of the word “delimit”. The Irish phrase is “ teorainn a chur ” which would, I think, be more accurately translated as “restrict”. In Professor de Bhaldraithe’s standard English-Irish Dictionary, the Irish equivalent of “restrict” is given as “ cuirim teorainn le ”. One of the ways in which the exercise of the said rights (which must be the right of private ownership and the general right to transfer, bequeath and inherit property referred to in s. 1 2º) may be restricted is by compulsory acquisition. Counsel for the Attorney General have argued that the contrast between the wording of the whole of Article 43 and Article 44 s. 2 6º (which has been copied, warts and all, from the Government of Ireland Act, 1920, with the inclusion of the completely inappropriate word “diverted”) means that the State may acquire property without compensation if it is seeking to restrict the exercise of the rights of private ownership with a view to reconciling them with the exigencies of the common good. I do not agree with this argument. The State has pledged itself by Article 40 s. 3, 2º by its laws to protect as best it may from unjust attack the property rights of every citizen and while some restrictions on the exercise of some of the rights which together constitute ownership do not call for compensation because the restriction is not an unjust attack, the acquisition by the State of all the rights which together make up ownership without compensation would in almost all cases be such an attack. I disagree with the view expressed by Mr. Justice Lavery that the Courts have no jurisdiction to question the constitutional validity of laws passed by the Oireachtas which restrict the exercise of property rights and which have been enacted with the professed motive of reconciling their exercise with the exigencies of the common good. The issues in each case, when the Article is invoked are, whether the legislation has been passed with a view to reconciling the exercise of property rights with the exigencies of the common good, whether the Oireachtas may reasonably hold that view and whether the restriction would be unjust without the payment of compensation. The burden of establishing that the restriction without compensation or with a limited amount of compensation would be unjust rests on the persons attacking the validity of the Act because there is a presumption that Acts of the Oireachtas are constitutional.
I turn now to deal with the decided cases on these Articles. Buckley v. The Attorney General [1950] I.R. 67 related to the validity of an Act deciding finally the ownership of monies in Court in respect of which an action had been commenced. The legislation was clearly invalid because it required the High Court to dismiss the action without hearing the parties and without regard to the law and so was an interference with the judicial power. On this ground the Supreme Court held the legislation to be invalid but they also held that it was unconstitutional under Article 43 because it deprived the plaintiffs of their rights in the funds in court when the common good did not require this. Mr. Justice O’Byrne, who delivered the judgment of the Court, rejected the arguments that Article 43 s. 1, 2º, was intended to prevent the total abolition of private property only and that the Oireachtas had power to take away the property rights of any citizen. He said: “It seems to us that the Article was intended to enshrine and protect the property rights of an individual citizen of the State and that the rights of the individual are thereby protected, subject to the right of the State as declared in Clause 2, to regulate the exercise of such rights in accordance with the principles of social justice and to delimit the exercise of such rights so as to reconcile their exercise with the exigencies of the common good”. He also rejected the contention that the decision on the exigencies of the common good was a matter for the Legislature only and that it was not subject to or capable of being reviewed by the Courts. In a later passage he said: “In the present case there is no suggestion that any conflict had arisen or was likely to arise, between the exercise by the plaintiffs of their rights of property in the trust monies and the exigencies of the common good and, in our opinion, it is only the existence of such a conflict and an attempt by the Legislature to reconcile such conflicting claims that could justify the enactment of the statute under review”. In Foley v. Irish Land Commission (1952) 86 I.L.T.R. 44; [1952] I.R. 118Article 43 was unsuccessfully invoked in an attempt to invalidate section 2 of the Land Act, 1946, which provided that the Land Commission could give a direction to a purchaser of land to reside on it and that if he did not do so, they could recover possession. Mr. Justice O’Byrne who delivered the judgment of the Court, said (at p. 153): “The argument put before this Court on behalf of the appellant, when reduced to its logical conclusion, seems to involve the proposition that any limitation placed by the Oireachtas on private property, which may result in the loss of that property by the owner, is repugnant to the Constitution and, accordingly, void. If this argument be sound, the Constitution has certainly placed serious fetters upon the Legislature in dealing with property rights and the Court is not prepared to accept such a far reaching proposition”.
The Attorney General v. Southern Industrial Trust Limited (1960) 94 I.L.T.R. 161 dealt with the validity of s. 5 sub-s. 1 of the Customs (Temporary Provisions) Act, 1945, under which goods which had been unlawfully exported could be seized and declared forfeited to the State. A motor car owned by the defendants, which had been hired by them to a Mr. Simons, was unlawfully exported by him and when it was brought back into the State, was seized by the Revenue authorities. The Attorney General brought information proceedings and in reply, the hire-purchase company said that the section was unconstitutional. In the High Court Mr. Justice Davitt said his view of Articles 40 and 43 was that there was a clear distinction drawn between (i) the general and natural right of man to own property, (ii) the right of the individual to the property which he does own and (iii) his right to make what use he likes of that property and that Article 40 s. 3 was the only provision in the Constitution which protected the individual’s right to the property which he owned. He held that Article 40 s. 3 was not an absolute guarantee of rights but was qualified so that it prohibited unjust attacks on them and that the power of the State to determine the boundaries of the exercise of the individual’s rights over his own property would not entitle it by law to deprive him of the whole or any part of the property which he owns. There was, however, he said, nothing in the Constitution which prevented the State passing a law which would deprive a person of his property if it complied with Article 40 s. 3. He felt however that he was not free to give effect to his own views (which are also mine) because of the decision in Buckley’s Case and he therefore held that section 5 of the Customs (Temporary Provisions) Act, 1945, was passed with a view to reconciling the exercise of property rights with the exigencies of the common good. Mr. Justice Lavery who gave the judgment of the Supreme Court, said that Article 40 s. 3 was not an unlimited guarantee of private ownership, that the property rights guaranteed by it are to be found in Article 43 only and that the issue in the case was whether the statutes which conferred power on the State in stated circumstances to take possession of particular chattels or other property and to divest without compensation the ownership of a person who had not himself committed a breach of the law could be justified in the circumstances of that case. He continued: “Can it be said that they regulate the exercise of the rights without violating the principles of social justice and do they merely delimit the exercise of the rights with a view to reconciling their exercise with the exigencies of the common good? It is argued that to take away the ownership of a particular item of property completely cannot in any circumstances be a regulation of or a delimiting of the exercise of the right of ownership and that the laws are therefore repugnant to the Constitution independently of any consideration of the principle of social justice or the exgiencies of the common good. This seems to the Court to be plainly wrong”. He then referred to Article 6 dealing with the powers of Government and said that the Oireachtas has the primary function of securing that the laws enacted by it have regard to the requirements of the common good and are regulated by the principles of social justice and that its members as the elected representatives of the People have the function of legislating so as to promote the objects laid down in the Preamble to the Constitution and to determine social and economic policy. He then said that it was not the function of the Courts to determine these matters or to criticise or invalidate the decisions of the Oireachtas. These remarks contradict what Mr. Justice O’Byrne said in Buckley’s Case and with the greatest respect to the members of the Supreme Court who agreed with the judgment, I think that they were wrong in their interpretation of the Constitution. If they are correct, the Oireachtas could, under the disguise of a claim that they were promoting the common good, pass any legislation in relation to property and the Courts would be powerless even if the Judges thought that the Act was an unjust attack on property rights. Mr. Justice Lavery then referred to a number of Acts (most of them passed before the enactment of the Constitution) which authorised the forfeiture of chattels and went on: “… What emerges … is that the State, recognising the general right of private ownership, has for many years claimed the right in particular circumstances to divest the ownership of the citizen in particular chattels. In the view of the Court this right must be recognised as a delimitation of the exercise of the general right and therefore valid under the provisions of Article 42 (sic) 2 2º if the other requirements of the Constitution are satis-field.” (The reference to Article 42 in this and the following paragraph is an error.) I do not understand why the existence of sections authorising the forfeiture or seizure of chattels compelled the Supreme Court to recognize that they were a delimitation of the exercise of the general right of property. The issue was whether the sections authorising this passed before the enactment of the Constitution remained part of the law having regard to Article 50 and whether the forfeiture without compensation which they authorised was required by the demand of the common good or was an unjust attack on property rights. This was the way in which Mr. Justice Davitt in the High Court approached the matter and as I have already said, I agree with his views.
In my view an analysis of the text of the Constitution and of the decisions on it lead to these conclusions:
(1) The right of private property is a personal right;
(2) In virtue of his rational being, man has a natural right to individual or private ownership of worldly wealth;
(3) This constitutional right consists of a bundle of rights most of which are founded in contract;
(4) The State cannot pass any law which abolishes all the bundle of rights which we call ownership or the general right to transfer, bequeath and inherit property.
(5) The exercise of these rights ought to be regulated by the principles of social justice and the State accordingly may by law restrict their exercise with a view to reconciling this with the demands of the common good.
(6) The Courts have jurisdiction to inquire whether the restriction is in accordance with the principles of social justice and whether the legislation is necessary to reconcile this exercise with the demands of the common good.
(7) If any of the rights which together constitute our conception of ownership are abolished or restricted (as distinct from the abolition of all the rights), the absence of compensation for this restriction or abolition will make the Act which does this invalid if it is an unjust attack on the property rights.
The plaintiffs accept that planning and control of buildings and land and of the use of these is required in the interests of the common good. Their principal complaint is that many of the provisions of the Act are an unjust attack on some of the rights included in the concept of ownership: they also make the charge that some of the powers given to the Minister are judicial and not limited and so cannot be validly conferred on him.
Counsel for the Attorney General argued that none of the plaintiffs had a sufficient interest in the proposed town plan to be made by the Dublin Corporation to enable them to succeed in this action. They said that the essential foundation of a declaratory action to have a section of an Act of the Oireachtas declared invalid was that the plaintiffs should be able to show that, at the time of the hearing, they or any of them had been deprived of a constitutional right or that “matters had been put in train which would have the result that they would be deprived of a constiutional right unless the Court intervenes.” The answer made by Mr. McCarthy for the plaintiffs was that any citizen may successfully challenge any provision in any Act of the Oireachtas on constitutional grounds. I do not think it necessary to decide this wide issue because the plaintiffs have in my opinion, a sufficient interest to make it possible for them to bring this action. The first named plaintiff was incorporated in October 1965 and one of their objects was to promote and protect the interests and property rights of persons residing or carrying on business in that part of the City of Dublin bounded by Capel Street, North Quays, O’Connell Street and Parnell Street. The second named plaintiff has died since the action began and was by consent struck out of it. The third named plaintiffs are a company owning property in the Capel Street area and the fourth named and fifth named plaintiffs carry on business in that area. There was a statutory obligation on the Dublin Corporation to prepare a plan (including objectives for the development and renewal of obsolete areas) within three years from the 1st of October 1964. In October 1964 (document 1964 No. 148) they considered a memorandum prepared by the City Manager which was based on a report by a well known town planning consultant, Dr. Linchfield. This recommendation was a pilot scheme for urban renewal and related to an area of seventy acres bounded by Parnell Street on the North, O’Connell Street on the East, Bachelor’s Walk and Ormond Quay on the South and Capel Street on the West was an obvious choice. Thirty-five acres of it were reported to be ready for acquisition and redevelopment while the remainder was said to be structurally sound. The development scheme envisaged a compulsory acquisition by the Corporation of the thirty-five acres and an arrangement with a development company by which they would develop this area and would be given a lease of it by the Corporation. This would provide for a fixed rent payable to the Corporation, a payment of interest to the development company on the capital which they had invested and an equal division of the remaining profits between the Corporation and the development company. The cost of acquisition and re-development was estimated to be £18 million of which £4 million would be paid by the Corporation and £14 million by the development company: the monies to be provided by the Corporation would be borrowed and would be repaid ultimately out of the fixed rent which they were to receive and their share of the profits. On the 10th of November, 1964, the planning officer was directed to prepare plans showing in greater detail the obsolete areas which were to be included in the proposed re-development scheme. From a report of the 26th of July, 1965, (1965 No. 102) it appears that the planning officer on the 10th of January, 1965, recommended that an area of forty-six and three-quarter acres shown on the map lettered TP 2191 and surrounded by a green line should be defined as an obsolete area. The area bounded by the green line on this map includes the East side of Capel Street from Grattan Bridge to its junction with Parnell Street and so the proposed definition of an obsolete area included the premises where the third, fourth and fifth named plaintiffs carry on business and in which the first named plaintiff has an interest. A further document (1965 No. 46) refers to consultation with local interests and shows that the Corporation were not prepared to give any guarantee in relation to the re-location in the area of those carrying on business there when the development and renewal had been carried out The first steps for the renewal were to be taken in the Moore Street/Chapel Lane area where seven acres were to be acquired and An Coisde Pleanala agus Forbairte recommended that a compulsory purchase order for this area should be made and on the 1st of May, 1969, the City Council confirmed this report.
The Dublin Corporation have prepared a draft plan to which objections were made and their consideration of these led to the preparation of a revised plan which had to be advertised (see the decision of Mr. Justice Butler in Finn v. The Bray Urban District Council (unreported) given on the 8th of December, 1967) and they have received many objections to it. There was no evidence that the Minister had extended the three year period mentioned in s. 19 and the position now is that a plan has not yet been made. The Dublin Corporation intend to show the obsolete areas in the final plan and the argument is that as the Corporation have not as yet decided on the boundaries of any obsolete areas the plaintiffs cannot now challenge the Act I think it is probable that the area surrounded by the green line on plan No. 2191 will be declared to be an obsolete area at some time in the future and that the third, fourth and fifth plaintiffs, who carry on business in that area and whose property will certainly be affected, if not compulsorily acquired, have a sufficient interest to enable them to maintain this action. The scope of the matters which may now be dealt with in a declaratory action have been greatly extended in recent years (see the judgment of Mr. Justice Walsh in Transport Salaried Staffs Association v. C.I.E. (1966) 100 I.L.T.R. 189; [1965] I.R. 180 which was not cited in the argument) and the plaintiffs’ interest in the definition of obsolete areas and the powers of planning authorities within it is sufficient to enable them to bring this action.
“Obsolete area” is defined as “an area consisting of land (in this definition referred to as the principal land) which, in the opinion of the planning authority, is badly laid out or the development of which has, in their opinion, become obsolete, together with such land contiguous or adjacent to the principal land as, in the opinion of the planning authority, is necessary for the satisfactory development or user of the principal land”. Counsel for the plaintiffs have said that ss. 19 and 77 when read with this definition are an unjust attack on the property rights of those living in or carrying on business in such an area. They have stressed that those affected by the decision about the boundaries of such an area have no right to a hearing before the authority, that the decision of an authority that an area is obsolete cannot be reviewed by any Court and that the inclusion of contiguous or adjacent land in the definition has the result that any property near a badly laid out area or one of which the development has become obsolete could be included. They have also said that there may be many prosperous businesses in an area declared to be obsolete and that the owners of these have no right to insist on being restored to the premises which they occupied before or indeed, to get suitable premises anywhere. The contention that the Courts should not review the opinion of a planning authority as to what is an obsolete area was founded upon a passage in the advice given by the Supreme Court to the President in In The Matter of the Offences Against the State (Amendment Bill) 1940 74 I.L.T.R. 61; [1940] I.R. 470. The Bill provided that whenever a Minister of State was of opinion that any person was engaged in activities which, in his opinion, were prejudicial to the preservation of public peace and order or to the security of the State, the Minister might by warrant order the arrest and detention of such person and part of the advice given by the majority of the Court (see p. 475) included this passage: “The only essential preliminary to the exercise by a Minister of the powers contained in s. 4 is that he should have formed opinions on the matters specifically mentioned in the section. The validity of such opinions is not a matter that could be questioned in any Court. Having formed such opinions, the Minister is entitled to make an Order for detention”. It may be that the principle of the separation of the legislative, executive and judicial powers in Article 6 of the Constitution precludes the High Court from enquiring whether a Minister of State has an opinion and whether he has reasonable grounds for it but this exclusion of jurisdiction relates to Ministers of State only and does not extend to opinions or decisions of planning or local government authorities.
If a planning authority form the opinion that land contiguous to or adjacent to the principal land is necessary for the satisfactory development and user of that land and includes such adjacent land in an obsolete area shown in a plan, the High Court has jurisdiction to review their decision and to set it aside if there were no reasonable grounds on which the authority could form such an opinion. When the exercise of a statutory power depends upon the formation of an opinion by any person or authority (except, possibly, a Minister of State), the High Court has jurisdiction in a declaratory action to inquire whether such an opinion was held and whether there were reasonable grounds for it (see the unreported decision of the Supreme Court in Listowel U.D.C. v. McDonagh given on the 18th December, 1968, and on the whole question of investigating whether an opinion was held see the advice of the Privy Council in Bisset v. Wilkinson [1927] A.C. 177, neither of which were cited).
The exercise of a statutory power may be successfully challenged in the Courts on many grounds. In Smyth v. East Elloe R.D.C. [1956] A.C. 737: [1956] 1 All E.R. 855 Lord Radcliffe summarised this jurisdiction: “of course, it is well known that Courts of Law have always exercised a certain authority to restrain the abuse of statuttory powers. Such powers are not conferred for the private advantage of their holders. They are given for certain limited purposes, which the holders are not entitled to depart from; and, if the authority that confers them prescribes, explicitly or by implication, certain conditions as to their exercise, those conditions ought to be adhered to. It is, or may be, abuse of power not to observe the conditions. It is certainly an abuse of power to seek to exercise it when the statute relied on does not truly confer it, and the invalidity of the act does not depend in any way on the question whether the person concerned knows or does not know that he is acting ultra vires. It is an abuse of power to exercise it for a purpose different from that for which it is entrusted to the holder, not the less because he may be acting ostensibly for the authorised purpose. Probably most of the recognised grounds of invalidity could be brought under this head: the introduction of illegitimate considerations, the rejection of legitimate ones, manifest unreasonableness, arbitrary or capricious conduct, the motive of personal advantage or the gratification of personal ill will”. In Fawcett Properties v. Buckingham County Council [1960] 3 All E.R. 503 Lord Denning said (at p. 518) that a public authority invested with a discretion must act reasonably and it seems to me that a decision that a particular area is obsolete could be reviewed in the High Court and declared to be unreasonable and, in the result, ineffective.
It was also said that giving the planning authority power to acquire lands in an obsolete area so that they could secure their development by making arrangements with a commercial corporation was an unjust attack on the property rights of those in the area. This may be the most efficient and economic way of developing such an area and I do not see anything unjust in a planning authority taking advantage of the skill of a development company in this work, particularly when this will probably result in a substantial profit to the authority.
Another ground of complaint is that the definition of obsolete area is contrary to constitutional justice because it does not give the owner of any property or business in such an area any right to a hearing or any opportunity of answering the case that the area is obsolete, that it does not require the authority to state what case is being made against the owners nor to listen to both sides nor any opportunity to correct contradict any relevant statement which is prejudicial to the interests of such an owner. Complaint is also made that the Act does not make it possible to have a decision of the planning authority reviewed by any tribunal or Court. (Paragraph 5(i) of the Statement of Claim). The draft development plan must, however, show the boundaries of any area which the planning authority considers to be obsolete and, in my opinion, the definition requires that the planning authority should first form an opinion that an area is badly laid out or that its development has become obsolete and should then show the boundaries of the area in the draft development plan. The effect of s. 21 (2) is that the planning authority are bound to consider objections or representations in relation to the boundaries of the obsolete area and that any objector is entitled to require that he should be given an opportunity to state his case before a person appointed by the planning authority who are bound to consider his objections and what he has said at the oral hearing and if their decision contains an error of law or is unreasonable it may be set aside by the Courts. When the person objecting to the boundaries of an obsolete area has been given an opportunity to inspect the draft development plan and to make objections and to state his case and when his objections have been fairly considered, I do not think that the authority are obliged by any rule of constitutional justice to give him an opportunity to correct any statement which may be made to them by their planning officers. Since this case was argued, a similar question was considered by the House of Lords in Wiseman v. Borneman [1969] 3 All E.R. 275 and I respectfully adopt the judgment of Lord Wilberforce in that case.
The plaintiffs also submit that the definition of obsolete area does not prescribe any standard by which the authority should determine whether the principal land is badly laid out or whether the development thereof has become obsolete and they say that there is so much vagueness and uncertainty in the definition that the rights of property owners under Article 43 may be violated. In my opinion, the standards prescribed are sufficiently precise to be interpreted and applied in a Court of Law. It is also said that they could be construed so that it would be possible for any locality in the State to be designated as an obsolete area and then that property in it could be compulsorily acquired. It seems to me that the High Court could decide whether an area is badly laid out and whether the development of it had become obsolete and that it could decide whether contiguous or adjacent land was necessary for the satisfactory development of the principal land because the Court would have the advantage of expert evidence. It is probable that prosperous businesses will be situate in such an area and that the buildings in which they trade will be compulsorily acquired but this is the necessary price of declaring an area to be obsolete. Mr. Conolly has said that the owners of property in an obsolete area which is compulsorily acquired have no right to be reinstated in the buildings which they formerly occupied and has compared the Act unfavourably with ss. 28 and 84 of the English Town and Country Planning Act, 1962. I can see that many difficulties would arise in connection with a right of reinstatement: if the building had been demolished and a new one built, it might be unsuitable for the business which was originally carried on there and the fixing of the rent would be difficult. I do not think that the absence of a right to be reinstated in the same or similar premises in an obsolete area is an unjust attack on the property rights of the former owner: he is entitled to compensation not merely for the value of the property but also for disturbance (see ss. 2 and 3 of the Act of 1919) and when assessing this, the arbitrator would have to have regard to the costs of acquiring new premises if the owner wished to continue his business.
Although a development plan has not yet been made for the City of Dublin, the Corporation are considering objections to a revised one. They have made a compulsory purchase order in relation to land in the Moore Street/Chapel Lane area so that they may develop it: an inquiry into this has been held and arrangements for the development of this area by the Irish Property Corporation Limited have been approved. These steps have been criticised by counsel for the plaintiffs but the effect of s. 22 and s. 2(7) of the Act is that the Corporation may take steps to secure the objectives which they think will be included in the development plan before it is adopted by them.
I therefore reject all the grounds of invalidity so skilfully and exhaustively pleaded in paragraphs 5, 6 and 7 of Statement of Claim.
Section 22 sub-s. (3) that the Minister may require a planning authority to vary the development plan “in respect of matters and in a manner specified by him” and it is then the duty of the authority to do this. Sub-s. (4) provides that when the authority have considered objections to the variations they may, with the consent of the Minister, alter them. When the Minister requires an authority to change the development plan they must publish notice of the proposed variations, must consider objections in relation to them and must give those affected an opportunity of stating their case orally against them. The authority and the Minister must then consider the objections and the oral representations. The charge in paragraph 8 of the Statement of Claim that this is contrary to constitutional justice because it gives persons affected by the variations no right to be heard before it is made is incorrect, because s. 21 applies to variations which may be directed by the Minister under s. 22 (3). Similarly, the complaint that property owners would not know what variation was required by the Minister is incorrect.
In paragraph 9 it is said that ss. 19, 20 and 21 make it obligatory on the planning authority to make a development plan and to review it, that this is left to the arbitrary discretion of the authority and there is no right of appeal to any Court against the plan. The result of this, it is pleaded, is that some private property within the area to which the plan relates will be substantially reduced in value. I do not think that the giving of power to a planning authority to make a development plan after they have considered and heard objections to the draft is an unjust attack on property rights. A plan of development for each city and town is necessary for the common good, someone must prepare it, and the planning authority who have staff trained in this work, seem to me to be the best persons to do it. While the High Court can decide questions as to the meaning of the Act, this Judge at least is not qualified to make decisions on planning policy. The making of a plan will necessarily decrease the value of some property but I do not think that the Constitution requires that compensation should be paid for this as it is not an unjust attack on property rights. If this argument were correct, many owners of houses would have been entitled to be paid compensation when the Rent Restrictions Act, 1946, was passed. Complaint is also made the authority may carry out development which is not in accord with the development plan but as they are the persons to give permission for development, it would be ridiculous that they had to apply to themselves for it.
In paragraph 10 of the Statement of Claim the plaintiffs say that Part IV which requires the permission of the planning authority to any development of land and for the retention of an unauthorised structure when it existed before the 1st of October 1964 is a violation of Article 40 s. 3 and Article 43 of the Constitution. Section 2, 1º of Article 43 does not require that the exercise of the rights of property must in all cases be regulated by the principles of social justice. It recognises that the exercise of these rights ought to be regulated by these principles and that the State accordingly may delimit (which I think means restrict) by law the exercise of the said rights with a view to reconciling it with the exigencies of the common good. If there is to be planning development, someone must decide whether new or altered buildings are to be allowed in a specified place and whether land should be retained as an unbuilt space. The very nature of town and regional planning requires restriction in the sense that building in a particular area may not be appropriate or that the proposed buildings are not suitable or that buildings may not be used for some purposes. Town and Regional planning is an attempt to reconcile the exercise of property rights with the demands of the common good and Part IV defends and vindicates as far as practicable the rights of the citizens and is not an unjust attack on their property rights.
Section 31 gives the planning authority power to serve an enforcement notice (which may require work to be done) when any development has been carried out without permission or when a condition attached to that permission has been broken. Section 32 gives similar powers when a condition relating to the retention of a structure has not been observed. Under both sections the authority may enter on the lands if the work mentioned in the enforcement notice is not carried out within the specified period. The plaintiffs complain that no appeal to any Court or tribunal against an enforcement notice is given and that entry on the lands may be made without a Court Order authorising this. Both these contentions are incorrect. The High Court would have jurisdiction to declare that an enforcement notice had been served without sufficient reason or that it was invalid while section 81 of the Act provides that if an owner refuses to allow a planning authority to enter, they cannot do so until they have obtained an order of the District Court approving the entry. These considerations dispose of the Constitutional objections to ss. 31, 32, 35 and 36.
Section 37 provides that the planning authority may serve a notice requiring discontinuance of a specified use of land or imposing conditions on that use if they have decided that the use should be discontinued or should be subject to conditions. This however, does not apply unless the use in respect of which the decision is made began after the 1st of October, 1964. There is an appeal to the Minister against the notice and a breach of a requirement in it in relation to use is a criminal offence. The plaintiffs say that this section is repugnant to Articles 34, 40, section 3 and article 43 of the Constitution. If a development plan is to be effective it must give the planning authority power to control the use of land and buildings and the section provides that in deciding whether any use should be discontinued, the authority are restricted to considering the proper planning and development of the area having regard to the plan. I do not see how any judicial question arises under section 37 because the way in which land should be used so that this will accord with the development plan is a matter of policy and the decision does not involve the application of legal rules. I do not think that the section is an unjust attack on property rights. In my opinion section 37 is not unconstitutional.
Part VI deals with compensation. The sections are of formidable length and complexity but the general principle stated in section 55 is that if the value of any person’s interest in land is reduced because of a decision under Part IV refusing permission to develop land or granting it subject to conditions, compensation becomes payable. Section 56 makes a number of exceptions to this general rule and the plaintiffs have concentrated on the hardsips which section 56 (1) (a) will cause. It reads: “Compensation under section 55 of this Act shall not be payable in respect of the refusal of permission for any development that consists of or includes the making of any material change in the use of any structures or of lands”. Section 2 however provides that use in relation to land does not include the use of the land by the carrying out of any works thereon. The result is that the principal effect of section 56 (1) (a) is that compensation is not payable if permission to make a material change in the use of land or buildings (other than building on them) is refused. This is not, however, an acquisition property without compensation: it is an interference with one of the rights which make up ownership and the plaintiffs contentions, if correct, would have the result that all legislation fixing rents payable by tenants or providing that they were entitled to new tenancies would be unconstitutional unless compensation for the loss caused by the restriction on the use was given. The restriction and limitation on the amount of compensation payable under Part VI is not what the plaintiffs describe in the Statement of Claim as “an arbitrary confiscation or partial confiscation of rights and property in a manner which is contrary to the principles of social justice and which fails to reconcile the exercise of the said property rights with the exigencies of the common good.” It is not in any sense, a confiscation of rights, it is a provision that interference with one of the rights of property is not to be the subject-matter of compensation and in my opinion is not a breach of Article 43 nor does it fail to defend and vindicate the personal rights of property and it is not an unjust attack upon them. It is also pleaded that the effect of section 56 (1) (a) read with section 28 sub-section 6 is to exclude totally the payment of compensation under the Act in the case of the refusal of permission for development consisting of the construction, erection or making of any structure or of land which has not been developed. As a general statement this is incorrect. If permission is refused because of any deficiency in the provision of water supplies or sewerage facilities or because the road lay out for the area has not been indicated in the plan, compensation is not payable. It seems to me, however, reasonable to provide that no compensation should be payable in respect of the refusal of permission to develop if the water and sewerage facilities are not sufficient or adequate for the development. Similarly, no compensation is payable if permission is refused because it is necessary to preserve any view or prospect or if it would endanger public safety by creating a traffic hazard. When section 56 (1) (a) is read with section 2, it does not exclude compensation for the refusal of permission for the construction of any buildings on undeveloped land though compensation may not be payable because of the other paragraphs in that section. I have already said that I do not regard the refusal of compensation for a change of use of buildings as being a violation of the property rights given by the Constitution. I do not think that section 56 (1) (a) is invalid.
Section 56 (1) (c) (v) provides that compensation is not payable if a condition is imposed when permission to develop land is granted if a similar requirement could have been imposed under any other Act without liability for compensation. When liability to pay compensation is excluded under the provisions of another Act or under any order or by-law and when that Act, Order or by-law has not been challenged, the provision in the Town Planning Act cannot be successfully challenged. Complaint is also made in connection with the provision which exclude compensation if permission is refused in order to preserve a view or if there is a special amenity order because the area is one of natural beauty or if permission is refused because the development would contravene materially a condition attached to an existing permission for development. In my opinion, none of these provisions is an unjust attack on property rights: indeed they are the type of provisions which one would expect to find in any Planning Act.
The effect of section 56 is that the limitation imposed by section 56 sub-section 1 on cases where compensation is payable are not to apply when permission has been refused for a new structure which substantially replaces one demolished by fire within the two years before the date of the application for permission or a condition has been imposed so that such new structure may not be used for the purpose for which it was being used when it was destroyed or where the condition has the effect that a new structure or part of it is set back or forward. Sub-section (3) then provides that every dispute whether a new structure replaces substantially a destroyed structure is to be determined by the Minister. The plaintiffs say that this gives the Minister power to determine finally whether the new structure replaces substantially the destroyed one and whether compensation is payable and that in both of these cases, the Minister is administering justice. I do not agree with the plaintiffs’ contention that the Minister’s decision is final. If his decision disclosed that his advisers or he have acted on a wrong view of the law or have made a mistake in their interpretation of the Act or if the rtquirements of constitutional justice have not been observed, the High Court has jurisdiction to reverse the decision. The Minister when deciding these matters is administering justice but he is not acting unconstitutionally because Article 37 of the Constitution authorises the exercise of limited functions and powers of a judicial nature in matters other than criminal matters by any person or body of persons duly authorised by law to exercise such functions although he or they is not a Judge or a Court. It is impossible, I think, to formulate a test by which limited functions and powers of a judicial nature can be distinguished from those which are unlimited because the scope and effect of the functions and powers must be considered in each case. The Minister decides only whether compensation is payable in a situation which will not often arise and his decision may, in certain cases, be reviewed. In my opinion, the power given to him is limited and so was validly conferred.
Section 58 provides that when the result of an appeal from a planning authority to the Minister is that permission to develop has been refused, section 56 (1) or section 57 shall not prevent compensation being paid if an application is made to the Minister within two months after the decision and he declares that he is satisfied that it would not be just and reasonable in the particular circumstances of the case that compensation should not be paid because of section 56 (1) or section 57. Complaint is made that the right to compensation is limited to those who appeal from the decision of the planning authority but a person seeking compensation should be compelled to appeal before he makes a claim because of the decision of the planning authority refusing permission may be reversed by the Minister and then no compensation would be payable. I do not see anything unconstitutional in limiting the Minister’s power to award compensation to cases where an appeal against the refusal of planning permission has been rejected. I have already decided that sections 55 and 56 are not invalid: they may in certain cases cause hardship but that always follows from general rules. The provisions giving the Minister power to declare that compensation shall be payable in certain cases is an attempt to deal with the cases where the application of a general rule will cause hardship. I do not think that the matter is clarified by calling the Minister’s power “arbitrary”. It is arbitrary in the sense that there are no rules governing its exercise and that the giving of compensation must depend ultimately on the view of the Minister or his advisers as to whether the application of the general rule leads to injustice. Section 58 makes it possible to mitigate hardship and is not unconstitutional.
Section 69 amends section 2 of the Act of 1919 by inserting the additional rules about the assessment of compensation in the fourth schedule to the Act: none of them are unreasonable and they do not fail to respect or, as far as practicable, to defend and vindicate the property rights of any citizen nor are they an unjust attack upon those rights. The amount of compensation which will be payable under the Act of 1963 may be very large and will have to be paid by the ratepayers of the area for which a planning scheme is made. They are, with the rules in the Act of 1919, what the Oireachtas considers to be a reconciliation of the exercise of the rights of private property with the exigencies of the common good and it has not been shown that their decision was wrong. Indeed, many of the added rules seem to me to be sensible. Thus the new rule 7 requires that when assessing the reasonable costs of equivalent reinstatement, the amount is to be limited to the estimated cost of buildings such as would be capable of serving an equivalent purpose over the same period of time as the buildings compulsorarily acquired would have done having regard to any depreciation in them. The result of this is that the reasonable cost of equivalent reinstatement is to be the value of the buildings which were acquired and that the owner is not to get a new building in place of an old one. Similarly, there is a rule that no account is to be taken of any value attributable to any unauthorised structure or unauthorised use; if account were taken of these, it would mean that the person getting compensation would be paid for ignoring restrictions imposed under the Act of 1963.
Paragraph 21 of the Statement of Claim lists a number of sections and sub-sections of the Act which are said to be unconstitutional because they confer the power to administer justice on the planning authority or on the Minister—a power which can be exercised by Judges only. The answer was that the Judicial powers given to the planning authority and the Minister were limited while the other powers were to decide administrative matters and so not an administration of justice. Before dealing with each of the impugned provisions it is necessary to say something about the difference between the administration of justice and judicial decisions in contrast to administrative awards. I have read the decisions in the Shell Company of Australia v. The Federal Commissioners of Taxation [1931] A.C. 275, Fisher v. The Irish Land Commission (1948) 82 I.L.T.R. 50; [1948] I.R. 3, McDonald v. Bord Na gCon (1966) 100 I.L.T.R. 11; [1965] I.R. 217 and the judgments given in the Privy Council in United Engineering Workers’ Union v. Devanayagam [1968] A.C. 356; [1967] 3 W.L.R. 461; [1967] 2 All E.R. 367. In the last case the dissenting judgment of Lord Guest and Lord Devlin contains an outstanding analysis of the judicial power and mentions some of the features by which it may be distinguished from arbitral and administrative powers.
In McDonald v. Bord na gCon (1966) 100 I.L.T.R. 11; [1956] I.R. 217, I said (at p 230/231): “It seems to me that the administration of justice has these characteristic features:
“1. A dispute or controversy as to the existence of legal rights or a violation of the law
“2. The determination or ascertainment of the rights of parties or the imposition of liabilities or the infliction of a penalty.
“3. The final determination (subject to appeal) of legal rights or liabilities or the imposition of penalties.
“4. The enforcement of those rights or liabilities or the imposition of a penalty by the Court or by the executive power of the State which is called in by the Court to enforce its judgment.
“5. The making of an Order by the Court which, as a matter of history, is an Order characteristic of Courts in this country.”
In the United Engineering Union Case [1967] 2 All E.R. the dissenting judgment points out that “the judicial power must be exercised so as to do justice in the case that is being tried and the Judge must not allow himself to be influenced by any other consideration at all. Consideration of policy or expediency, which are permissible for the administrator, must be altogether excluded by the Judge”. While the requirements of constitutional justice oblige an administrative tribunal to act judicially, it does not follow that every tribunal which is bound to act in this way is exercising the judicial power of the State. It seems to me that many of the powers conferred on the Minister by the Act to decide appeals involve not the application of legal rules or principles but decisions on questions of policy in planning matters.
The first section attacked is section 5 under which the Minister may decide any question as to what is or is not development or exempted development. “Development” is defined in section 3 and “exempted development” in section 4. The answer to the question as to what is development and what is exempted development depends then upon the application of legal standards prescribed by the Act and is, therefore, an administration of justice. It is, however, in my opinion a limited power and there is a right of appeal from the Minister’s decision to the High Court. “The test as to whether a power is or is not limited in the opinion of the Court lies in the effect of the assigned power when exercised. If the exercise of the assigned powers and functions is calculated ordinarily to affect in the most profound and far reaching way the lives, liberties, fortunes or reputations of those against whom they are exercised they cannot properly be described as limited” ( per Mr. Justice Kingsmill Moore in the Solicitors Act Case (1961) 95 I.L.T.R. 167; [1960] I.R. 239). I do not think that the decision as to what is or is not development or exempted development affects the fortunes of citizens in a profound way because the result of the Minister’s decision is that planning permission has to be obtained. The Minister’s decision does not decide finally that a particular development cannot be carried out: it decides only that permission is or is not required.
Sub-sections 3, 4, 5 and 9 of section 26 are attacked. Sub-section (3) provides that a planning authority shall not grant permission for development in a case in which it would contravene materially the development plan or a special amenity Order without the consent of the Minister. This is not the exercise of judicial power but is an administrative decision as to whether divergence from the development plan should be permitted. Sub-section 4 fixes the time within which a grant of permission for development is to be given: in the case of an application to the Minister under sub-section 3, it is to be regarded as having been given within seven days from the receipt by the authority of the Minister’s decision. As sub-section 3 is valid and as sub-section 4 fixes a time only within which permission is deemed to have been given, it is not invalid. Sub-section 5 gives every person a right to appeal to the Minister against the decision of a planning authority on an application for permission to develop and provides that the Minister is to determine the application as if it had been made to him originally so that he is restricted to considering the proper planning and development of the area of the authority having regard to the provisions of the plan. When deciding the appeal, the Minister has not to decide it in accordance with any known legal principles or rules. In my opinion, the Minister when deciding appeals under this sub-section is not exercising judicial powers but is deciding matters of administrative policy. Sub-section 9 provides that when the planning authority decides to grant a permission they shall grant it after the expiration of the period for the taking of an appeal if no appeal is taken but if there is an appeal the Minister shall grant it, if he allows the appeal, as soon as possible after the decision. As the Minister’s decision is not the exercise of judicial power, the grant of permission cannot be the administration of justice.
Sub-sections 4 and 6 of section 27 deal with the Minister’s power to decide an appeal under that section which deals with the granting of the authority of permission to retain an unauthorised structure which existed before the 1st of October 1964 and for which permission has not been granted under earlier Town Planning Acts. Again, the exercise by the Minister of this power to decide such an appeal is not an administration of justice for he is deciding a policy matter and he has not to apply legal rules.
Section 29 provides that when permission to develop any land has been refused by the Minister on an appeal, the owner may, in certain circumstances, serve on the authority a notice requiring them to purchase his interest in the land and they must within three months serve a notice stating whether they are or are not willing to comply with it and a copy of their notice must be sent to the Minister. If he is satisfied that the conditions mentioned in paragraphs (a) to (c) or paragraph (a) and (b) of sub-section 1 have been fulfilled, he may confirm the purchase notice served by the person who has been refused permission. It then becomes the duty of the authority to serve a notice stating that they intend to comply with the purchase notice which is to have effect as if it were a compulsory purchase Order made under section 10 of the Local Government (No. 2) Act, 1960. The Housing Act of 1966 is now the code under which most compulsory acquisitions of property are carried out but in deciding on the constitutional validity of provisions in the Act, the Court is limited to considering it having regard to the Acts which were in force when the Act was passed. The function conferred on the Minister under sub-section 4 is to decide whether the conditions in sub-section 1 have been fulfilled. His decision is thus not on policy but on the interpretation of the conditions in sub-section 1 and their application to the case which he is considering. I think that that this is an exercise of a limited judicial power and is saved by Article 37.
Section 30 deals with the revocation and modification of a permission granted by a planning authority. Under it they may serve a notice that they propose to revoke permission to develop land and the person on whom the notice is served may appeal to the Minister against it. The authority when deciding whether they will serve such a notice are restricted to considering the proper planning and development of the area of the authority having regard to the development plan. The Minister’s decision on an appeal under this section is not an administration of justice.
Section 33 deals with an unauthorised structure which existed immediately before the 1st of October, 1964. The authority may serve a notice on the owner requiring him to alter the structure or to carry out any works in or around it or to provide space around it and an appeal lies to the Minister against the decision of the planning authority to serve such a notice. The planning authority are restricted, when deciding whether to serve a notice or not, to considering the proper planning and development of their area. This is not an exercise of the judicial power of the State by the Minister: it relates to matters which are administrative and in which there are no legal rules which he must apply
Section 36 gives the planning authority power to serve a notice requiring the removal or alteration of a structure and, in the case of a removal or alteration of a structure and, in the case of a removal, to provide a suitable replacement. A person who complies with such a notice is entitled to be paid the expenses of the removal or alteration and of any replacement. In this paragraph of the statement of Claim (21) the attack is on the appeal against the notice to the Minister. Section 29 (which gives an owner the right to serve a notice on the authority requiring them to purchase land when permission to develop has been refused applies when a notice requiring removal or alteration is served under section 36 and the Minister may, instead of confirming the purchase notice, cancel the notice requiring the removal or alteration. There are no rules, principles or conditions which bind the planning authority in deciding whether they will serve a notice to remove or alter nor is the Minister when deciding an appeal bound to apply rules. In my opinion, the Minister’s decision on an appeal to him against a notice under the section or his decision that, instead of confirming the purchase notice, he will cancel the notice requiring the removal is not an administration of justice and is not valid.
Sub-sections 5 and 6 of section 35 are attacked but I think that 35 is a misprint for 55. This is the section dealing with the compensation and the sub-sections refer to the time within which an application for compensation must be made. Sub-section 5 provides that where the decision is that of the Minister, its date shall be taken to be a reference to the time of the decision ap pealed against and sub-section 6 deals with time also. As the Minister’s decision is not the exercise of the judicial power, a reference to it as fixing a time within which a claim for compensation is to be made cannot be invalid I have already dealt with sub-section 3 of section 56 which is in my opinion the exercise of a limited judicial power by the Minister.
Section 66 is intended to preserve the right to the payment of compensation under the provisions of the Town and Regional Planning Acts 1934 and 1939 because these two Acts were being repealed. Under them (see section 57 of the Act of 1934 and sections 10 and 11 of the Act of 1939), a planning authority which had passed a resolution for the making of a scheme could, before the scheme was made, prohibit the construction, demolition, alteration or repair of structures and might then be liable to pay compensation. The directions given under these two Acts are called “interim directions” in the Act of 1963. Section 66 provides that a person who would have been entitled to be paid compensatoin under the Acts of 1934 and 1939 from the 30th of September 1964 is entitled to recover it from the planning authority unless they decide that compensation would not have been payable under the Act of 1934, assuming that the plan had come into force on the 30th September 1964 and contained provisions corresponding to the interim directions. If the planning authority decide that they will not pay compensation, an appeal lies to the Minister. The question which the Minister has to decide is whether the person applying for compensation would have been entitled to it under the Act of 1934 and 1939 and this depends upon whether the interim direction reduced the value of the property (see section 61 of the Act of 1934). The functions conferred on the Minister by sub-sections 2 and 3 of section 66 seem to me to be judicial but limited and so are not invalid.
Section 82 deals with the making of regulations in relation to appeals to the Minister and provides that when there is an oral hearing requested by any party, it may be conducted by a person appointed by the Minister and that the person is to supply a report to the Minister who is to consider it. In the cases in which the Minister is not exercising the judicial power, he may validly appoint a person to hear the appeal and to report on it to him. In the cases where the Minister is exercising limited powers of a judicial nature, the hearing by a person appointed by the Minister is by a person duly authorised by law to do so (see Article 37) and is valid.
Paragraph 22 of the Statement of Claim complains that sections 75 and 77 of the Act are unconstitutional. Section 77 gives a general power to a planning authority to develop or secure the development of land and gives them power to provide areas of convenient shape and to secure or carry out the development or renewal of obsolete areas and they may exercise their powers of compulsory acquisition of land for these purposes. I have already dealt in some detail with the effect of the definition of obsolete area and it does not seem to me that anything in section 77 is an unjust attack on the property rights recognised by the Constitution. Section 75 provides that land acquired by a planning authority for the purposes of the Act may be sold or leased under any condtitions. This was essential if the development of obsolete areas was to be carried out by the planning authority in co-operation with a property developing company and I have already held that this is not an unjust attack on property rights In my opinion section 75 is not unconstitutional.
Section 78 deals with the making of regulations. It provides that regulations made in relation to any specified cases or classes of cases of development proposed to be carried out by a local authority who are planning authorities may
(a) require the authority to give public notice in any specified manner of development which they propose to carry out.
(b) require the inclusion in any such notice of an invitation for the making by interested persons of objections to the proposed development and
(c) in cases where any such objections are made and are not withdrawn require the authority to have the consent of the Minister before carrying out the proposed development. Development by a planning authority is “exempted development” and so does not require the permission of the planning authority or of the Minister (section 24). The plaintiffs submit that section 78 imposes an obligation on the Minister to make regulations under it although the word is “may”. I do not agree with this argument. The regulations referred to in section 78 are confined to specified cases or classes of cases of development proposed to be carried out by a planning authority and as the section does not specify these cases, it is impossible to say that the regulations shall provide for the matters specified in paragraphs (a), (b) or (c) in all cases. The effect of the definition of exempted development is that a planning authority may carry out any development without notice and without giving persons who may be affected an opportunity to object. I do not think, however, that this is contrary to constitutional justice or an unjust attack on property rights. If the planning authority wish to acquire land for the purpose of any development, notice of the making of the compulsory purchase order will have to be given.
Section 79 amends section 22 of the Landlord and Tenant Act, 1931, by providing that when the landlord is a planning authority and the premises in respect of which a new tenancy is claimed are situate in an area for which the development plan indicates objectives for its development or renewal because it is an obsolete area, the authority shall not be bound to grant a new tenancy. The case against the validity of this section is based upon the view that section 2 of the Act defining an obsolete area and parts of section 19 (2) are unconstitutional. As I have already held that they are not, this argument fails. It was suggested during the hearing that the abolition of the right to a new tenancy by this section was an unjust attack on property rights: I do not accept this. The right to a new tenancy was created by statute and does not extend to every tenancy. The development of an obsolete area requires that in some cases tenancies should not be renewed and the section does not take away the right given by the Act of 1931 to compensation for disturbance when a business has been carried on.
In my view none of the many sections and sub-sections of the Act of 1963 impugned in this action are unconstitutional and this action fails. I do not propose to award any costs. The defendant’s main argument was that the plaintiffs had not a sufficient interest in the Act to make it possible for them to sue and I have rejected this. Moreover, it is, I think, in the public interest that the validity of this far-reaching Act should be determined.
I wish to thank Mr. Conolly for his very able opening speech. I have read and reread the transcript of it because it outlined all the questions which I have had to decide.
Richard O’Brien v Bord na Mona and the Attorney General SC
1981 No’s 201 & 205
Supreme Court
9 December 1982
[1983] I.L.R.M. 314
O’HIGGINS CJ
delivered the judgment of the Court on the Constitutional issues on 9 December 1982 saying: By order dated 18 March 1981 made in these proceedings by Keane J in the High Court, it was declared that ss. 29 and 30 of the Turf Development Act, 1946 are invalid having regard to the provisions of the Constitution. Against the declaration both the Defendants have appealed to this court.
The Turf Development, Act 1946 is the statute setting up Bord na Mona. S. 29 provides that the Board of Bord na Mona for the purpose of exercising or performing any of its functions may do all or any of a number of things including the acquiring of any land either permanently or temporarily and either by agreement or compulsorily and also the acquisition of various rights in or over land. S. 30 provides that any time before conveyance or ascertainment of price or compensation the Board may, subject to provisions with regard to notice and to the eventual payment of compensation, and for the purpose of exercising or performing all or any of its functions, enter on and take possession of any land or exercise any right in land or terminate, restrict or interfere with interests in land.
The duties of the Board as set out at s. 17 of the Act of 1946 are:
(a) to produce and market turf and turf products; and
(b) to foster the production and use of turf and turf products; and
(c) to acquire bogs and other lands; and
(d) to manage, develop and work bogs and other lands vested in the Board, and
(e) generally to do all such other things as arise out of or are consequential upon the duties mentioned in the preceding paragraphs of this section.
The long title to the Act of 1946 is as follows:
An Act to make better provision for the development in the national interest of the production, distribution and supply of turf in the State and for this purpose to establish a Board to be called Bord na Mona, to define its powers and duties, to dissolve the Turf Development Board Limited and to transfer its property and liability to Bord na Mona and to provide for certain other matters connected with the matters aforesaid.
The plaintiff is the owner of a farm of land containing approximately 376 acres in Co. Westmeath which includes an area of bogland.
In November 1978 Bord na Mona published an advertisement in the newspapers indicating their intention to acquire certain lands scheduled to the advertisement, including approximately 132 acres of bogland the property of the plaintiff. In pursuance of that advertisement and of a right of objection indicated in it, the plaintiff objected and had meetings and correspondence through a solicitor with the officials of Bord na Mona. On 21 March 1980 the Board of Bord na Mona resolved compulsorily to acquire the bogland, the property of the plaintiff, and in June 1980 Bord na Mona served on the plaintiff a notice of their intention to enter and take possession of the land occupied by him, the subject matter of the decision to acquire pursuant to s. 30 of the Act.
The plaintiff in these proceedings firstly sought a declaration that ss. 29 and 30 of the Act of 1946 were repugnant to Articles 40 and 43 of the Constitution, and further claimed a series of declarations that steps taken or purported to be taken by Bord na Mona to acquire compulsorily the said lands and to enter on or take possession of the said lands were unlawful and in excess of their powers under the Act of 1946, and were taken or purported to be taken in breach of rules of natural and constitutional justice.
This judgment of the Court is concerned only with the claim for a declaration as to the invalidity of the two sections having regard to the provisions of the Constitution, and individual judgments in relation to the other claims will be delivered. The grounds on which the plaintiff in his pleadings alleged the invalidity of the sections were firstly that they failed to respect, defend and vindicate the personal rights of the plaintiff as guaranteed by Art. 40.3, and secondly that they contravened the plaintiff’s right to private ownership of his lands as guaranteed in Art. 43.
It is clear from the judgment of the learned trial judge that the submissions made on the facts in the High Court on behalf of the plaintiff with regard to the allegation that the sections were unconstitutional were firstly, that the absence in the statute of an express provision requiring Bord na Mona to give notice of their intention to make a compulsory acquisition order was a failure to protect and vindicate the property rights of the plaintiff in breach of Art. 40.3, and constituted an interference with the plaintiff’s right of ownership of his property, not required and beyond the requirements of the common good, in breach of Art. 43. Secondly and in the alternative, it was submitted that the absence of any procedure contained in the Act of 1946 for appeal against the making of a compulsory acquisition order or for the confirmation by an external authority or outside tribunal of the making of a compulsory acquisition order constituted a breach of both the Articles concerned.
The learned trial judge rejected the first of these submissions, basing his decision on the principles laid down by this court in the East Donegal Co-Operative v The Attorney General [1970] IR 317. In that case it was held that it is to be presumed that it was intended that proceedings, procedures, discretions and adjudications which were permitted, provided for or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice. The learned trial judge found that there was nothing in the Act of 1946 which prevented Bord na Mona in proceeding compulsorily to acquire lands to give due notice of their intention so to do and to create a machinery for the proper making and consideration of objections or representations concerning such proposed acquisition. He accordingly held that the Act could not be found to be unconstitutional on those grounds. Against that portion of his judgment and that decision there has been no cross appeal in this case nor indeed in the view of this court could one have been sustainable.
The learned trial judge did, however, hold that the act of Bord na Mona in making a compulsory acquisition order was a judicial and not an administrative act, and that the power contained in the Act of 1946 enabling them so to decide without any form of appeal or confirmation by an external tribunal or authority violated the maxim of natural justice and constitutional justice that no man should be a judge in his own cause.
It is against that decision on the facts proved and on the terms of the statute that the appeal to this court on this issue arises. The Act of 1946 having been enacted by the Oireachtas subsequent to the Constitution is of course entitled to a presumption of constitutionality in accordance with the principle repeatedly laid down by this court.
The correctness of the decision of the learned trial judge upon which he based his view that ss.29 and 30 of the Act of 1946 were inconsistent with the Constitution depends upon his conclusion as a matter of law having regard to the terms of the statute that Bord na Mona in making a decision to acquire these lands was performing a judicial rather than an administrative act. In the case of Murphy v The Corporation of Dublin [1972] IR 215 the issue which was before the court was the right of the Minister for Local Government (as the relevant Minister then was) to claim an executive privilege in relation to the report of an Inspector submitted to him pursuant to the provisions of the Housing Act, 1966 as the result of a public enquiry into objections made against the confirmation of a compulsory purchase order.
The decision in that case was to the effect that the Minister in exercising his powers under the Housing Act, 1966 was doing so as a persona designata under that Act, and that he therefore was not exercising one of the executive powers of the State, and could not accordingly claim an executive privilege in relation to the report on foot of which he exercised the power. In the judgment in the High Court in this case, particular reliance was placed upon the portion of the judgment of Walsh J, with whose judgment all the other members of the court agreed, where at p. 238 he stated:
by statute the Minister is the one who has to decide the matter — not the Inspector. In doing so the Minister must act judicially and within the bounds of constitutional justice.
In the context of the issues which arose for determination before the court in Murphy v The Dublin Corporation this court is satisfied that the statement quoted decided that the Minister in confirming a Compulsory Purchase Order was bound to act judicially. It was not an expression of opinion that the confirmation was a judicial rather than an administrative act.
In a great number of instances, persons carrying out acts which are clearly in their essence administrative (and particularly in cases where such acts affect property rights) have under our law an obligation to act fairly, and in that sense, judicially in the carrying out of those acts and in the making of the decisions involved in them. They can and will be reviewed, restrained and corrected by the courts if they act in a manner which is considered to be arbitrary, capricious, partial or manifestly unfair. In that sense it can be said that such persons carrying out administrative acts have an obligation to act judicially, but so to say does not determine the question as to whether within the category of different functions they are administrative actions or judicial actions; cf Fisher v The Irish Land Commission and the Attorney General [1948] IR 3; McDonald v Bord na gCon and The Attorney General [1965] IR 217 and Loftus v The Attorney General [1979] IR.
In the view of the court it is necessary in this case to examine and consider the structure and intention of the Act of 1946 in order to determine whether Bord na Mona in making a decision to acquire land or property rights compulsorily is exercising a function or power of a judicial nature. If it is then it cannot be a judge in its own cause. But, on the other hand, if it is acting in discharge of an administrative function it would have an obligation to act fairly and properly but would not necessarily be inhibited from deciding the question as to whether or not to acquire.
The long title of the Turf Development, Act 1946, and the provisions of s. 17 of the Act which have already been quoted, make it clear that the purpose of the statute was to make available the considerable natural resource of turf in this State in the best possible fachion for the use of the nation. Both on the terms of the statute itself and indeed on the events which have since occurred in the development of the activities and work of Bord na Mona it is clear that the dominant method by which that overall purpose was to be achieved and has been achieved was by the acquisition of boglands and other ancilliary lands by Bord na Mona and the working of them by Bord na Mona itself so as to produce turf and turf products. It seems clear that it was by this procedure that a major source of energy was intended to be and has in fact been harnessed for the use of society in general. The control of this operation, and specifically the decision as to whether any particular piece of land should or should not be acquired, vests ultimately under the terms of the statute in the Board. The members of the Board, the Chairman and the Managing Director are appointed by the Government and hold office at the will of the Government.
The statute must, therefore, be viewed as constituting a decision that the common good requires that bogland should be available for compulsory acquisition. The task of securing that objective was vested in Bord na Mona a statutory corporation.
Viewed in that light, it would appear clear that the decision as to whether or not any particular area of land should be acquired for the attainment of that objective should be effectively vested in Bord na Mona. There is not any other authority of the State, executive or judicial, which should make the decision in principle as to whether, balancing the desirability of the production of turf on the one hand, and the interests of an individual owner of land on the other, the production of turf or the agricultural interests of the landowner should prevail.
Such a view of the purpose and effect of the state does not vest in Bord na Mona an arbitrary or capricious power. Nor is it exempt in any way from review by the courts should it in any particular instance act from an indirect or improper motive or without due fairness of procedure or without proper consideration for the rights of others.
This court is satisfied that, subject to these very considerable restrictions, the making of or refusal to make an order for compulsory acquisition is essentially an administrative act.
Having reached that conclusion, the court is further satisfied that neither the absence of a right of appeal from the decision of Bord na Mona to acquire a particular area of land or property right, as distinct from the right to review the exercise of that right, nor the absence of a scheme for a confirming external authority constitutes a breach of any of the plaintiff’s constitutional rights.
Therefore the decision of the court is that ss. 29 and 30 of the Turf Development Act, 1946 are not invalid having regard to the provisions of the Constitution, on the grounds relied upon, and that the declaration made in the High Court to the contrary effect must be set aside.
FINLAY P
(O’Higgins CJ, Walsh, Henchy and Griffin JJ concurring) delivered his judgment on the remaining issues on 9 December 1982 saying: The plaintiff in addition to the claim made by him that the impugned sections of the Turf Development Act, 1946 were inconsistent with the Constitution, which has been dealt with in the judgment of the court, also claimed in the alternative that even assuming the constitutionality of those provisions that the defendants Bord na Mona, on the facts of this case, acted in excess of their powers and otherwise than in accordance with natural and constitutional justice in the procedures which they adopted prior to the making of a decision compulsorily to acquire his land.
Although the learned trial judge having declared the sections to be inconsistent with the Constitution did not make any order on this claim, he expressed the view in his judgment that on the facts proved in this case that the Board of the defendants, Bord na Mona, had made the ‘compulsory purchase order’ without having considered the substance of the plaintiff’s objection to it, and that in so doing they acted in breach of natural justice and constitutional justice and in particular in breach of the maxim audi alteram partem.
The defendants, Bord na Mona, in their Notice of Appeal appealed against that finding by the learned trial judge on the grounds that he erred at law or on the facts or on a mixed question of law and fact. Against that finding of the learned trial judge no appeal was submitted on behalf of the Attorney General.
Although the appeal by the defendants Bord na Mona against this finding is stated to be on the grounds that the learned trial judge erred on the law and on the facts, it seems clear that individual findings of fact which were made by him are not seriously challenged on behalf of these defendants. On a consideration of the transcript they could not be held to be unsupported by the evidence.
Those facts may thus be shortly summarised:
1. These defendants published a notice in the local and national press in October 1978 of their intention to consider making an order to acquire permanently and compulsorily certain lands scheduled and of the fact that a map showing the lands proposed to be acquired together with a book of reference containing the names of the owners had been deposited in their Head Office and at the Garda Siochana station in Athlone where they were available for inspection. The advertisement informed persons wishing to make representations or objections of their right to do so in writing to the secretary of these defendants on or before 4 December 1978.
2. The plaintiff having seen a copy of that advertisement instructed his solicitors to write to the secretary of these defendants on 30 November 1978 simply objecting to the proposed compulsory acquisition.
3. The plaintiff subsequently summoned a meeting of other persons affected and formed a body called the ‘Fardrum IFA Bog Committee’ on whose behalf a different firm of solicitors wrote to the secretary of these defendants on 1 December 1978 objecting to the compulsory acquisition. This letter stated strictly without prejudice the right of the Committee and its individual members to outline and put forward further detailed grounds of objection; that they were indicating the general grounds of objection. These grounds of objection which were set out in five paragraphs were in a sense general in nature and applicable to all the owners of the lands proposed to be acquired.
4. As a result of that letter, a meeting took place on 15 February 1979 at which the plaintiff and one other member of the Committee together with their solicitor Mr. Egan were present, and at which these defendants were represented by Mr. Huggard, a senior Land Purchasing Officer and a Mr Cranny, another officer of the defendants.
5. At that meeting, the plaintiff made it clear to the representatives of these defendants that while he fundamentally objected to his lands being acquired at all, if they had to be acquired he objected to their acquisition in fee simple, and gave reasons why it was his desire that he should not lose his ownership of the lands, but that at the end of whatever period was necessary for the removal of peat by these defendants the land in a cut-away condition should revert to him. He was informed by Mr Huggard at that meeting that it was the policy of these defendants to acquire the fee simple of boglands, and reasons were given for that policy but Mr Huggard agreed to refer the matter to his principals.
6. Mr Huggard subsequently ascertained from the managing director of these defendants that the policy of acquiring the fee simple only in bogland which had been operated by these defendants for some time was unchanged.
7. On 21 March 1980 the Board of these defendants met and there was submitted to them a report from the managing director dated 11 February 1980, setting out the lands proposed to be acquired; stating that he had considered each of the objections to the making of a compulsory purchase order; and recommending that the Board make an order for the permanent and compulsory acquisition of the lands delineated on a map annexed to that report. Also accompanying the report was a schedule setting out the names of the occupiers and the particulars of the objections.
8. The objections thus notified to the Board of these defendants were in short the objections contained in the letter written on behalf of the Committee on 1 December 1978, and no reference was made to the particular objection to the acquisition of the fee simple of the lands made by the plaintiff at the meeting with Mr Huggard and Mr Cranny.
9. Having considered this report, schedule and map, the Board of these defendants decided to accede to the recommendation of the managing director, and compulsorily to purchase the plaintiff’s lands in fee simple.
I am satisfied that the requirement for fairness of procedure and compliance with the rules of natural and constitutional justice in relation to the exercise of a power compulsorily to acquire land falls into two separate categories.
Firstly, the acquiring authority must before deciding to acquire any particular piece of property give ample and fair notice to the owner of such property of its intention so to do; give to him an ample opportunity of making representations or objections; consider such representations or objections in a judicial manner and finally reach a decision whether to acquire or not upon the basis of that consideration. The second category of requirement is that the acquiring authority having decided compulsorily to acquire, must, with like reasonable notice and opportunity to be heard and make representations, arrive by a fair procedure at a proper compensation for the acquisition.
A consideration of the terms of ss. 30 to 36 of the Turf Development Act, 1946 makes it clear that the provisions with regard to notice and the making of objections or representations contained in those sections are referrable to the second of the categories which I have outlined above, and are clearly designed towards the ascertainment of fair compensation. The Act does not appear to contain any set or fixed procedure for the giving of notice and hearing of objecttions or representations concerning the decision to acquire. In accordance with the principles laid down by this Court in the judgment concerning the constitutionality of the sections and previously laid down by this Court in Loftus v The Attorney General [1979] IR and East Donegal Co-Operative v The Attorney General [1970] IR 317, it is necessary for these defendants to create and carry out procedures in relation to the decision to acquire which are fair and in accordance with natural and constitutional justice.
It is in my view clear that the decision as to whether or not to acquire compulsorily land is a decision to be made by the Board of these defendants, and is not a function which may be delegated by the Board to the Managing Director or any other officer or servant of the Board under s. 16 of the Act. This interpretation of the statute appears to have been accepted by these defendants for it was by a decision and resolution of the Board that the acquisition was ordered.
In the light of that conclusion, what was necessary for compliance with fair procedure and natural and constitutional justice, was firstly that the plaintiff as the owner of land affected should have ample and sufficient notice of the intention or proposal to make a compulsory acquisition. Secondly, that he be given an ample and sufficient opportunity of making objections or representations to that proposal and thirdly, that the objections and representations, if any, made by him or on his behalf be communicated adequately to the Board of these defendants, and judicially considered by them before they make a decision. On the facts proved in this case where the plaintiff noticed and reacted to the advertisement published in the press the first of these requirements was complied with. I would point out, however, that this view does not mean that the publication of an advertisement in the press would in every case be a sufficient notification without in addition the service of an individual notice on the owner or reputed owner.
Again on the facts of this case, the plaintiff was given a sufficient opportunity of making his objections and representations known to the servants of these defendants.
I would, however, agree with the learned trial judge in his finding that there was never brought to the notice of the Board of these defendants prior to their deciding to acquire these lands the precise objection of the plaintiff that his lands should be acquired for such period only as was necessary for the extraction of the peat from them, and thereafter should revert to him or his successors.
From the transcript it is clear that evidence was given on behalf of these defendants in the High Court of an unchanged and apparently unchanging policy to acquire the fee simple of boglands, and that reasons of substance were given for the existence of that policy. It is not part of the function of this court nor was it part, as was properly decided in the High Court, of the function of the High Court to decide on the wisdom of such a policy. It is equally clear, however, in my view that where, as occurred in this case, there is a failure by the deciding authority properly to hear the objections and representations of the owner of the land before deciding to acquire it, that that deficiency cannot be repaired by subsequent proof that even if such representations and objections had been heard and considered it is improbable that a different decision would have been reached. A necessity for the observance of fair procedure and natural justice in the process of the compulsory acquisition of property is too fundamental and important to be supplied by proof that if objections had been entertained they would have been rejected.
Whilst therefore it may be true as was contended on behalf of these defendants that if the present acquisition order is set aside and a further acquisition process instigated that the result will be the same as far as the plaintiff is concerned, I am satisfied that the plaintiff is nonetheless entitled to a declaration that the procedures were not in accordance with natural justice, and that accordingly the purported resolution to acquire the lands is null and void. Unless these defendants give undertakings to this court which are acceptable regarding their intention not to proceed further with either the acquisition based on their order made in March 1980 or with an entry pursuant to that order upon the lands of the plaintiff, the plaintiff would also appear to be entitled to ancilliary injunctions. I would therefore dismiss the appeal of these defendants on this aspect of the case and vary the order of the High Court accordingly.
D. Blake, B. E. Downes, E. McAleese, N. Ladd and P. Hodgins v The Attorney General
and
Patrick Madigan v The Attorney General
1980 No. 141
Supreme Court
29 June 1981
[1981] I.L.R.M. 34
O’HIGGINS CJ
delivered his judgment on 29 June 1981 saying: … These two appeals relate to separate actions in which declarations were sought as to the invalidity, having regard to the provisions of the Constitution, of certain parts of the Rent Restrictions Act, 1960, as amended by the Rent Restrictions (Amendment) Act, 1967 and the Landlord and Tenant (Amendment) Act, 1971. In the first action declarations were sought as to the invalidity of Parts II and IV of the said Act of 1960, as amended, and in the second action a similar declaration is sought in respect of Part IV only. Both actions were heard together in the High Court and resulted in declarations as to invalidity being made by the trial Judge, Mr Justice McWilliam, in respect of both Parts of the said Act. Against this decision these appeals have been brought by the Attorney General in respect of the relief granted in each of these actions. As in the High Court, these appeals have been heard together by this Court.
The Act
The Rent Restrictions Act, 1960 (hereinafter called the Act of 1960) is declared by its long title to be: ‘An Act to make provision for restricting the increase of rent and the recovery of possession of premises in certain cases and to provide for other matters connected therewith’. As this long title indicates, the Act of 1960 is intended to operate in respect of lettings of premises to which it applies and, so to operate, in respect of the amount of the rent or the recovery of possession of such premises, irrespective of the terms of any letting agreement, or of the wishes of the landlord. The premises to which the Act applies are termed ‘controlled dwellings’. These, with the amendments made by the 1967 Act taken into consideration, are such dwellings, erected before 7 May 1941, which, if houses, do not exceed £40 rateable valuation in Dublin or Dun Laoghaire and £30 elsewhere, and, if separate and self-contained flats, do not exceed £30 rateable valuation in Dublin and Dun Laoghaire and £20 elsewhere. Exclusions from the operation of the Act of 1960 are provided for in s.3(2). This subsection excludes on various grounds dwellings which by reason of date of erection or valuation would otherwise be controlled. The control effected by the Act of 1960, as amended, is said to extend to between 45,000 and 50,000 dwellings.
Rent Restrictions
Part II of the Act of 1960 provides for the ‘Restriction of rent controlled dwellings’. The restriction is effected by providing for the determination of a basic rent for each controlled dwelling which, with such lawful additions as are permitted, becomes the rent which is payable. The determination of the basic rent is provided for in s. 7 and s. 9. Each of these sections was amended by the 1967 Act and they are here referred to in their amended form.
s.7 applies to a controlled dwelling in respect of which evidence is forthcoming of both (a) that it was on 8 June 1966 held by an occupying tenant under a contract of tenancy not being for more than a term of five years or on a statutory tenancy, and (b) the rent at which it was then so held. The basic rent under the section is the net rent on 8 June 1966. This net rent makes provision for the rates, if paid or allowed for by the landlord. If rates were not paid or allowed for by the landlord, then the rent on 8 June 1966 is the net rent and therefore the basic rent. Otherwise the basic rent is the rent payable under the contract.
If the requirements of s.7 are not satisfied s.9 applies. Under this section, the basic rent of controlled dwellings, not falling within s.7, is determined by the court. Such rent must be the amount which the court considers reasonable having regard, as far as possible, to the rents of comparable dwellings. s.10 provides for the additions which may be made to the basic rents as determined. s.11 provides that the lawful rent shall, if there are no permitted additions, be the basic rent. If there be such additions, the section provides that the lawful rent shall be the sum of the basic rent and such additions.
Restrictions on Recovery of Possession
Part IV deals with ‘Restrictions on Recovery of Possession of Controlled Premises’. The broad effect of these restrictions is that a landlord cannot normally recover possession of a controlled dwelling from a tenant who pays his rent, observes the other conditions of the tenancy and does not commit nuisance or waste. Provision is, however, made for the recovery of possession by the landlord if he can establish certain special grounds. When an order for possession is refused by reason of the provisions of the Act of 1960, the court makes an order declaring that the tenancy of the tenant, otherwise than by virtue of that Act has terminated, and the tenant then becomes a statutory tenant. Up to the making of such an order, the tenant is commonly referred to as a non-statutory tenant. On the death of the tenant, whether statutory or non-statutory, the surviving spouse, if there be such, and, if not, a member of the family who is bona fide residing with the tenant, becomes entitled to the same protection from dispossession as had been enjoyed by the tenant (s.31). Furthermore, a statutory tenant is empowered, with the consent of the landlord, to make a voluntary assignment of the dwelling. The landlord’s consent can be withheld only if greater hardship would, owing to the special circumstances of the case, be caused by granting such consent than by withholding it (s.32). The landlord of a statutory tenant is also, for the purposes of some sections of the Act of 1960, made responsible for any repairs for which the tenant is not under a liability under his contract or by virtue of section 42 of the Landlord and Tenant (Amendment) Act (Ireland), 1860 (commonly called Deasy’s Act). The restrictions contained in this part may have the result that, in the absence of special grounds, possession of the dwellinghouse can never be recovered by the landlord and that possession thereof, with all the features of statutory protection, can eventually pass to different generations of the tenant’s family or of the tenant’s assignee.
The First Permanent Statute
The Act of 1960 was the first measure dealing with rent restriction which was not expressed to be of temporary duration. As passed, the Act applied to all dwellings erected before, or in the course of erection on, 7 May 1941, which were within the stated valuation limits and which were not otherwise excluded. This meant that control under the Act extended both to the older dwelling previously defined as ‘1923 Act’ premises and to the later dwellings which had been termed ‘non—1923 Act’ premises. Rent restriction was effected by Part II and restriction of recovery of possession by Part IV. Under s.7 (already referred to in its amended form) the basic rent of all controlled dwellings was to be determined by reference to the rent at which they were let on the coming into operation of the Act (31 December 1960) and under s.9 (already similarly referred to) as being such amount as the court considered reasonable, having regard, as far as possible, to the basic rents of comparable premises. By reason of the provisions of earlier legislation, rents determined under either of these sections were related to the rent which was, or might have been, charged for the dwelling on 3 August 1914, or on 7 May 1941, as the case might be, subject to such flexibility as was given under s.9 by the words ‘as the court considers reasonable’. By s.8, provision was made for the review, on the application of the landlord, of a basic rent determined under s.7, where such rent fell short by an amount exceeding one-eighth of the rent which would have been determined under s.9, if that section had applied, and, on proof that the amount of the basic rent had been affected by special circumstances. Unlike the legislation which it replaced, the Act did not apply to business premises. It was, however, provided by s.54 that tenants who had retained possession of such premises by reason of the previous legislation should be entitled to the benefit of the Landlord and Tenant Act, 1931. This section has now been repealed by the Landlord and Tenant (Amendment) Act, 1980 [see s.11 and the Schedule to that Act].
The Act of 1967 and the Landlord and TenantAct, 1971
The Act of 1960 was amended by the Rent Restrictions (Amendment) Act, 1967 and in minor respects by the Landlord and Tenant (Amendment) Act, 1971. It is that Act, so amended, which is impugned in these proceedings. The 1967 Act decontrolled houses with a rateable valuation exceeding £40 in Dublin and Dun Laoghaire and £30 elsewhere. It also decontrolled self-contained flats with a rateable valuation exceeding £30 in the Dublin area and £20 elsewhere. Tenants of dwellings so decontrolled were, however, given a right to a new tenancy under the Landlord and Tenant Act, 1931. Where, however, in such cases, the rent which would be fixed under the Landlord and Tenant Act, 1931 would cause hardship to the tenant, the court was empowered to grant a new lease for a term not exceeding ten years, subject to such rent as the court felt the tenant should be required to pay, having regard to all the circumstances. Decontrol was also to apply to any house or self-contained flat of which the landlord recovered possession. It also applied to houses having a rateable valuation in excess of £10 and, which, after the passing of the Act, became tenanted by a bachelor or a spinster between 21 and 65 years of age. Such tenants were also given the benefit of the Landlord and Tenant Act, 1931, with the benefit of the special provision for hardship already mentioned.
s.7 of the Act of 1960 was amended to provide a new method of determining the basic rent of controlled premises. The basic rent was to be the net rent at which the controlled premises were let on 8 June 1966 on a contract of tenancy not being for more than five years or on a statutory tenancy. The net rent was arrived at by deducting from the gross rent the amount of the rates payable by the landlord for the year 1965/1966. An amendment to s.8 of the 1960 Act enabled a landlord to apply to the District Court to review a basic rent where the landlord owned not more than six controlled houses or self-contained flats with a combined rateable valuation not exceeding £60 (in case one at least of them was situated in the Dublin area) or £40 in any other case. The rent, if adjusted by the court, was to be of such amount as the court considered reasonable, having regard to all the circumstances of the case, but, in particular, to the necessity of avoiding financial hardship to the tenant and the landlord. It was not to exceed the maximum rent which would be fixed on the renewal of a tenancy under Part III of the Landlord and Tenant Act, 1931. The provision applied only where the landlord owned the premises on 8 June 1966 and continuously thereafter. The time for making such an application was, however, limited to two years after the passing of the Act (9 May 1967). To succeed in such an application, the landlord had to satisfy the court that the basic rent (fixed by reference to the net rent as of 8 June 1966) was less than the rent which would be fixed under s.9 of the Act of 1960 (as amended), if the case was one to which that section applied. s.9 was also amended to provide that, in fixing basic rents under that section, the court could have regard to rents of comparable dwellings, whether controlled or uncontrolled. Other amendments effected by the 1967 Act do not appear to the court to be material.
The Landlord and Tenant (Amendment) Act, 1971 effected a limited amendment to the provisions of the Act of 1960 (as amended). By s.10 of that Act, the right given to a limited category of landlords to apply to the court to revise the basic rent of controlled premises under s.8 of the Act of 1960 was amended. It revived the time for making such applications, originally fixed at a two-year period from the passing of the Act of 1967, for a further period of one year from the passing of the 1971 Act. This period has expired, as has the power of review contained in s.8, both in its original and amended form.
As already indicated, these proceedings under appeal question the validity of Parts II and IV of the Act of 1960 as amended. In this judgment separate consideration is given to each of the two impugned Parts having regard to the grounds of invalidity alleged.
Effect of Part II
In relation to Part II, the plaintiffs submit that its provisions have the consequences detailed in the ensuing paragraphs.
The basic rent of the majority of controlled premises must be determined under s.7. This will be the net rent at which the premises were let on 8 June 1966. This rent, because of earlier legislation, necessarily has as its base either the 1914 rent, if the premises were erected prior to 1919, or the 1941 rent, if they were erected after the year 1919. While this base has to some extent been broadened by statutory increases, it still operates in restriction of the rent which may be charged, to such an extent that the income derived by the landlord from the letting is slight. In relation to the properties owned by the plaintiffs, the evidence is that the market rent would be between 9 and 19 times the controlled rent. This disproportion between market and controlled rents (which is not necessarily the crucial test in this case) is not unusual and is a direct result of the rent restriction effected by the legislation.
Since the special provision for revision of basic rents, which had been permitted in certain cases by s.8 of the Act of 1960 (as amended) and by s.10 of the Landlord and Tenant (Amendment) Act, 1971, no longer operates, basic rents, once they are determined under s.7, can never be reviewed. This means that the income derived by the landlord in all such cases is effectively frozen and tied to the net rent which was derived from the premises on 8 June 1966. While additions are allowed to this basic or net rent, these are referable to the actual expenditure by the landlord, whether for rates, repairs or general maintenance. Apart from yearly increases in rates, such additions as are permitted under s.10 are limited to the precentages of the actual expenditure set out in the section.
The imposition on the landlord of full responsibility for all repairs (except such as are the tenant’s obligation under his agreement or under Deasy’s Act), further accentuates the hardship caused to landlords of controlled dwellings, particularly in the case of older houses where maintenance is heavy and the rents small. Reliance was placed on the particular example of one of the plaintiff’s houses, No. 32 Haroldsville Avenue, Dublin. In the case of this house, the evidence established that if the landlord carried out appropriate repairs and maintenance, she would sustain an annual loss of £35. The plaintiffs contend that the general result is virtually to deprive them of all financial benefit from their property.
The plaintiffs contend that Articles 40 and 43 of the Constitution, read in the light of its Preamble, have been contravened and that the legislation is to that extent invalid.
As to the Preamble to the Constitution, the plaintiffs rely on the following paragraph: ‘And seeking to promote the common good, with due observance of Prudence, Justice and Charity so that the dignity and freedom of the individual may be assured, true social order attained, the unity of our country restored and concord established with other nations’: as being the basis upon which the Constitution was adopted.
As to Article 40, the plaintiffs rely on the following provisions:
1 All citizens shall, as human persons, be held equal before the law
This shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function.
3.1 The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2 The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen.
As to Article 43, the plaintiffs rely on the entire Article, which is in the following terms:
1.1 The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2 The State accordingly guarantees to pass no law attempting to abolish the right to private ownership or the general right to transfer, bequeath, and inherit property.
2.1 The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.
On behalf of both the plaintiffs and the Attorney General, the constitutional issues have been dealt with at length, in pleadings, in written submissions and in oral argument. A condensed summary of what has been thus put forward is necessary to show the background of argument against which the court’s decision has been reached.
Arguments Summarised
For the plaintiffs, it has been submitted that they have been denied the requirements of justice and have been treated unequally vis-a-vis other citizens who have let uncontrolled property; that the arbitrary and unfair restriction of their letting rights constitute an unjust attack on their property rights; that the State has failed to vindicate those rights; that the restrictions imposed on their property rights are not regulated by any principle of social justice; that the delimitation of those rights is unrelated to the exigencies of the common good; that if an emergency or other temporary basis for the impugned restrictions existed at any stage, it has long since passed; that the imposition of those restrictions on houses and flats merely because they happened to be built before 1941 and to have rateable valuations below specified amounts, is arbitrary, unjustifiably discriminatory and not required by the common good; that such control, regardless as it is of the means of the tenant or the hardship it may cause to the landlord, is unjust and unfair, particularly because, since December 1972, the impugned legislation has left no means of reviewing basic rents once they have been determined by the courts; and that the State’s failure since 1971 to amend this legislation and to redress the plaintiffs’ grievances amounts to a dereliction by the State of its duty under Article 40.3, to protect them from unjust attack and to vindicate their property rights having regard to the injustice that has been done to them.
On behalf of the Attorney General, the case has been made that this legislation lation falls to be examined for invalidity under Article 43 of the Constitution; that s.2 of that Article provides for the regulation and delimitation of property rights according to the principles of social justice and the exigencies of the common good; that what this inpugned legislation has done is justified by s.2 of that Article and that, accordingly, no question of non-compliance with Article 40.3 arises; that the power of regulating or delimiting the rights of private property is vested in the Oireachtas by Article 6 and that it is to be presumed that in exercising that power in relation to Article 43, it acted intra vires and with due regard to the directive principles of social justice set out in Article 45, which are not cognisable in any court; that the court’s power to condemn this legislation under either Article 40.3, or under Article 43, cannot arise unless it is shown that what was done was not permitted by Article 43.2; that, if what the Oireachtas has done is permitted by Article 43.2, no question of injustice requiring State action under Article 40.3 s.2 can arise; that Part II of the Act must be tested for constitutional validity as at the time of its enactment and that it cannot be held to have lost that validity by mere passage of time or changes in economic circumstances; that even if the State had any duty to review rent control periodically, it had in fact done so.
Acts Presumed to be Valid
Neither the Act of 1960, nor the Acts which amended it, are expressed to be Acts passed for the purpose of delimiting the exercise of property rights with a view to reconciling such exercise with the exigencies of the common good. Being Acts of the Oireachtas however, which are not unconstitutional on their face, they enjoy a presumption of validity until the contrary is clearly established. Accordingly, if authority for this legislation can be found under the provisions of Article 43, that Article can be relied on when the legislation is challenged.
Article 43 and Article 40
Artilce 43 is headed by the words ‘Private Property’. It defines the attitude of the State to the concept of the private ownership of external goods and contains the State’s acknowledgement that a natural right to such exists, antecedent to positive law, and that the State will not attempt to abolish this right or the associated right to transfer, bequeath and inherit property. The Article does, however, recognise that the State ‘may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good’. It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property such as a controlled premises. Such rights are dealt with in Article 40 under the heading ‘Personal Rights’ and are specifically designated among the personal rights of citizens. Under this Article the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property.
This question of the relationship of Article 40.3.2 to Article 43 was discussed in The Attorney General v Southern Industrial Trust Limited and Simons 1960 94 ILTR 161. In that case Lavery J, when delivering the judgment of the court, said at p. 176: ‘In any event, in the opinion of the court, the property rights guaranteed are to be found in Article 43 and not elsewhere, and the rights guaranteed by Article 40 are those stated in Article 43’. The court is unable to accept this view. Article 43 does not state what the rights of property are. It recognises private property as an institution and forbids its abolition. The rights in respect of particular items of property are protected by Article 40.3.2, by which the State undertakes by its laws to protect from unjust attack and in the case of injustice done, to vindicate the property rights of every citizen. It is the duty of the courts to protect such property rights from unjust attack and the decision as to what is such an attack is to be made by the courts. This view has acceptable judicial support. Davitt P in his judgment in the High Court in The Attorney General v Southern Industrial Trust Limited and Simons (1960) 94 ILTR 161, gave his view as to the relationship between the two Articles in the following terms:
If the matter were res integra and untouched by authority, I confess that my reading of these articles (Article 40.3.2 and Article 43) would be as follows: There is a clear distinction to be drawn between (1) the general and natural right of men to own property, (2) the right of the individual to the property which he does own, and (3) his right to make what use he likes of that property; and I think this distinction is to be observed in these articles. Article 40.3 seems to me to be the only provision in the Constitution which protects the individual’s rights to the property which he does own. By it the State guarantees to respect and as best it may to protect it from unjust attack and where injustice has been done to vindicate it. This is no absolute guarantee but is qualified in more than one respect. It impliedly guarantees that the State itself will not by its laws unjustly attack the right; and I think that the justice or otherwise of any legislative interference with the right has to be considered in relation, inter alia, to the proclaimed objects with which the Constitution was enacted, including the promotion of the common good.
Article 40.3.2 Applies
In this case the plaintiffs claim that their rights to the private property in question have, by the impugned legislation, been subjected to unjust attack and that what has been done is in breach of Article 40.3.2 of the Constitution. In the opinion of the court, this legislation cannot be regarded as regulating or delimiting the property rights comprehended by Article 43. It accordingly requires to be examined for its validity in relation to the provisions of Article 40.3.2. The Question, therefore, to be decided is whether the impugned provisions of the Act of 1960 (as amended) constitute an unjust attack on the property rights of the plaintiffs.
The Necessary Limitation of the Constitutional Challenge
Before entering upon this question, it is necessary to clarify certain matters. As already indicated, the Act of 1960 was amended extensively by the Rent Restrictions Act, 1967. The amendments included an extension of the power to review certain rents given to the court by s.8 and a widening of the permitted basis for comparison on the determination of rents under s.9. By s.4(3) of the Act of 1967, however, it was provided that no application for the review of rent under s.8 could be made after the expiration of two years from the passing of that Act (9 May 1967). This subsection was in turn amended in so far as it related to reviews under s.8, s.s. (1)A, by s.10 of the Landlord and Tenant Act, 1971. This section revived and extended the power of the court to review under that subsection ‘for one year after the passing of the Landlord and Tenant (Amendment) Act 1971’ (7 December 1971). The power to review has accordingly now ceased. In considering the validity of the impugned parts of this legislation, the court cannot have regard to provisions which have been amended or repealed or which no longer operate. The court proposes to consider this legislation as it now operates following the last amendment effected by s.10 of the Landlord and Tenant Act, 1971.
Examination of the Legislation — Part II
As already indicated the long title of the Act of 1960 describes it as ‘An Act to make provision for restricting the increase of rent and the recovery of possesssion in certain cases and to provide for other matters connected therewith.’Part II contains the statutory provisions by means of which rents are determined and increases restricted. The legislation which contains these provisions is not limited in its duration. Its terms are mandatory and, generally, do not permit any person affected by its provisions to contract out of their application. The result is that the property rights of the owners of affected houses and dwellings are interfered with, without their consent, and agreements entered into by them for the letting of such promises are, if contrary to the statutory provisions, overridden and rendered ineffective. To the extent, therefore, that these statutory provisions interfere with and render ineffective the exercise, by the owners of the houses and dwellings affected, of their property rights in relation thereto, they constitute, in the opinion of the court, an attack upon such rights. The question which must be decided, however, is whether such attack is unjust and therefore in contravention of the provisions of Article 40.3.2 of the Constitution.
In this regard it should first be noted, that in accordance with its long title, the Act makes provision for restricting rents only ‘in certain cases’. As already indicated, these cases comprise lettings of houses or dwellings within specified valuation limits which were built or constructed prior to 7 May 1941. No reason for this selection is apparent from the impugned legislation, and, apart from the fact that rent control existed only in such cases in the previous temporary legislation, no reason was advanced by counsel for the Attorney General. The result is that lettings of all houses and dwellings outside the specified valuation limits and of all such houses and dwellings, irrespective of valuation, built after 1941 are free of any form of rent control. Further, the legislation expressly excludes all lettings of dwellings made under the Labourers Acts, 1883 to 1958 or the Housing of the Working Classes Acts, 1890 to 1958 (to be read in conjunction with s.120 of the Housing Act, 1966) and thereby excludes the many thousands of lettings made by local authorities to persons in need of housing assistance. It is further to be noted that the statutory provisions contained in Part II operate in respect of the house or dwelling controlled, irrespective of the means of the tenant. Neither the means of the tenant nor the lack of means or possible hardship to the landlord may be considered in determining the permitted rent. It is, therefore, apparent that in this legislation, rent control is applied only to some houses and dwellings and not to others, that the basis for the selection is not related to the needs of the tenants, to the financial or economic resources of the landlords, or to any established social necessity and, since the legislation is now not limited in duration, is not associated with any particular temporary or emergency situation. Such legislation, to escape the description of being unfair and unjust, would require some adequate compensatory factor for those whose rights are so arbitrarily and detrimentally affected. No such compensatory factor is to be found in the impugned provisions of Part II.
The vast majority of the rents in question are determined under the provisions of s.7. This section declares that the basic rent of premises to which it applies shall be the net rent at which such premises were let on 8 June 1966. The net rent, where the landlord paid or allowed a deduction in respect of rates, is declared to be the rent payable less the rates. Otherwise it is the rent payable on the specified date. The rent payable on 8 June 1966 was, however, in all cases regulated by the rent control legislation previously in force. This had the effect that all rents so payable were related to the rent chargeable in 1914 in respect of the older controlled dwellings, and to the rent charged on 7 May 1941 in respect of the later ones. It was alleged by the plaintiffs, and not seriously disputed by the Attorney General, that the direct effect of this control has been that rents have been pegged or frozen at a level which is usually oppressively uneconomic and which is further eroded by the statutory obligation to repair and maintain the controlled premises. S.9 applies only to cases not covered by s.7. It permits determination by the court of such rent as the court considers reasonable having regard to the rents of ‘dwellings which are comparable in regard to location, accommodation, amenities, state of repair and rateable valuation’. It is accepted by the plaintiffs that rents determined under s.9 are comparably higher than rents determined under s.7 and that, accordingly, such rents yield an element of profit for the owner.
Once basic rents are determined under s.7 or s.9 no review thereof is now permitted. The temporary revival of the power to review in certain s.7 cases, provided by the Landlord and Tenant Act, 1971, has long since expired. This means that all owners whose rents are controlled are restricted in their income to the amount of the basic rent and to such lawful additions as may be related to increases in rates and to a percentage of actual expenditure on maintenance, repair or improvement. This absence of any power to review such rents, irrespective of changes in conditions, is in itself a circumstance of inherent injustice which cannot be ignored. When this is coupled with the absence of any provision for compensating the owners whose rental incomes are thus permanently frozen, regardless of the significant diminution in the value of money, the conclusion that injustice has been done is inevitable.
In the opinion of the court, the provisions of Part II of the Act of 1960 (as amended) restrict the property rights of one group of citizens for the benefit of another group. This is done without compensation and without regard to the financial capacity or the financial needs of either group, in legislation which provides no limitation on the period of restriction, gives no opportunity for review and allows no modification of the operation of the restriction. It is, therefore, both unfair and arbitrary. These provisions constitute an unjust attack on the property rights of landlords of controlled dwellings and are therefore contrary to the provisions of Article 40.3.2 of the Constitution.
Examination of Part IV
Part IV restricts in s.29 the landlord’s right to recover possession of controlled premises. It is also impugned in these proceedings as being invalid having regard to the provisions of Article 40.3.2 of the Constitution. The relevant provisions in Part IV are mandatory and constitute an interference with the normal property rights of the landlords affected. It is an interference which has the effect, in some cases, of causing an almost permanent alienation from the landlord of the right to get possession of the premises, because of the extensive right of the tenant’s family to retain possession after the tenant’s death.
In the view of the court, a restriction to this extent of a landlord’s right to obtain possession of rented premises is not in itself constitutionally invalid, provided the restriction is made on a basis that is not unconstitutionally unfair or oppressive, or has not due regard both to the personal property rights of the landlord and the rights that should be accorded to tenants having regard to the common good. However, the restriction on the right to recover possession contained in Part IV is not distinguishable, or capable of being saved, by such considerations. It is an integral part of the arbitrary and unfair statutory scheme whereby tenants of controlled dwellings are singled out for specially favourable treatment, both as to rent and as to the right to retain possession, regardless of whether they have any social or financial need for such preferential treatment and regardless of whether the landlords have the ability to bear the burden of providing such preferential treatment.
Even if Part IV could be said not to be infected with the constitutional infirmity which invalidates the provisions governing rent control, it could survive the challenge made to its constitutionality only if it could be held to have been enacted by the Oireachtas in a manner and in a context that would leave it with a separate and self-contained existence as a duly enacted measure representing the law-making will of the Oireachtas: see Maher v Attorney General [1973] IR 140, 147; The State (Attorney General) v Shaw [1979] IR 136; and the varying views expressed in King v Director of Public Prosecutions (31 July 1980).
It is clear that it was not so enacted. It acquited a legislative existence as an integral part of a statutory scheme in which controlled dwellings, and only controlled dwellings, had attached to them restrictions as to rent and as to the right to recover possession. For the reasons given earlier in this judgment, those provisions as to rent restriction amount to an unconstitutional interference with the property rights of the relevant landlords. Even if it could be held that the restrictions on the right to recover possession contained in Part IV did not suffer from the same fatal invalidity, those provisions could not be given a life of their own as representing duly enacted provisions. The whole of the provisions governing both rent control and right to possession were enacted (and re-enacted) as a package and, as such, were intended to have an interconnected statutory operation. It would be impossible to say that if the Houses of the Oireachtas had been presented with the option of enacting the restrictions on getting possession of controlled premises that are contained in Part IV, as a type of control separate and distinct from the control of the rents of such dwellings, they would have enacted Part IV on its own. It is a hypothesis that never became a parliamentary choice, express or implied. It would be impossible, therefore, to say that the Houses of the Oireachtas ever visualised the existence of Part IV as distinct from Part II. Neither of those Parts can be deemed to have been given a viable statutory existence apart from the other.
Accordingly Part IV must also fall as part of an unconstitutionally unjust attack on the property rights of the landlords affected.
Further Observations
This decision has the effect that a statutory protection which many thousands of families relied on for the continuance of the existing tenancies in the dwellings in which they live is no longer available to them. A ruling of this nature on the constitutional validity of a particular statutory provision usually exhausts the functions of this court. In this instance, however, because of the special features of the case and the consequences involved, the court considers that some further observations are called for.
The removal from the affected tenants of the degree of security of possession and of rent control which they hitherto enjoyed will leave a statutory void. The court assumes that the situation thereby created will receive the immediate attention of the Oireachtas and that new legislation will be speedily enacted. Such legislation may be expected to provide for the determination of fair rents, for a degree of security of tenure and for other relevant social and economic factors. Pending the enactment of such legislation as may be decided upon, it may be possible in many cases for agreement to be reached between landlords and tenants. Where, however, such agreement is not possible, either because of the tenant’s inability to pay the rent demanded or because of the landlord’s determination to recover possession, considerable hardship would be caused in certain cases, if possession were obtained by the ejectment of the tenant. This court does not wish to pre-empt or prejudge any situation of litigation that may flow from this judgment. It desires to emphasise, however, that it is the duty of the courts to have regard to the basic requirements of justice when exercising their jurisdiction. In this regard, in the reasonable expectation of new legislation, when a decree for possession is sought, the court should, where justice so warrants, in a case where the now condemned provisions of Part IV would be given a defence against the recovery of possession, either adjourn the case or grant a decree for possession with such stay as appears proper in the circumstances.
Brennan v AG
Michael Brennan, Dermot Clancy, Nicholas Fitzhenry, Bernard Devereux and Rory Brown v The Attorney General and Wexford County Council
1980 No. 10670 P
High Court
23 July 1982
[1983] I.L.R.M. 449
(
BARRINGTON J
delivered his judgment on 23 July 1982 saying: The plaintiffs are farmers. In this case they claim that relevant provisions of the Valuation Acts 1852–1864 are inconsistent with the Constitution, and no longer form part of the law of the State. They also question the validity of the valuations placed on their respective farms under those Acts.
All the plaintiffs live in County Wexford, and the second-named defendants are the County Council of County Wexford. At the beginning of the hearing the second-named defendants announced that they did not propose to make any independent submissions but to leave the defence of the Valuation Acts to the Attorney General. They accordingly asked for, and were granted, leave to absent themselves from the hearing, reserving their rights in relation to costs.
HISTORICAL BACKGROUND — THE GRIFFITH VALUATION
The valuation challenged in each case is the valuation placed on the plaintiffs’ farms under the primary valuation of the farms of the country known as the Griffith Valuation.
The first Government Valuation of lands in Ireland was commenced in 1830 for the purposes of levying grand jury cess. The unit of valuation was the townland and the valuation of land was to be made with reference to a scale of agricultural prices. When the whole of Ireland, with the exception of six counties, had been valued the passing of the Poor Law Act of 1838 rendered a separate valuation of each tenement necessary for the purposes of levying the poor rate.
The existence of two valuations, one for levying grand jury cess and the other for levying the poor rate, led to the passing of the Valuation Act of 1852 and, under this and amending Acts, the valuation of the lands and buildings of Ireland was carried out.
This case is concerned only with the valuation of the lands. The valuation of buildings raises other and different considerations.
The valuation of each tenement was made by reference to an estimate of the net annual value thereof. The net annual value was to be estimated by reference to the average prices of several articles of agricultural produce listed in the Act. The list of prices was set out in s. 11 of the Act and represented an average of the prices prevailing in the three years 1849 to 1852. In these three years, which followed on the Famine, the price of agricultural produce was in fact depressed and this was to give rise to difficulties as the valuation proceeded.
The valuation, which was carried out under the direction of Sir Richard Griffith, was commenced in the South of Ireland in 1852 and completed in 1866, the North being valued last. The valuation of Carlow was the first completed and the valuation of Armagh the last. The valuation of Kerry was completed on 19 July 1853; that of Tipperary on 29 June 1853; that of Wexford on 7 July 1854; that of Meath on 10 July 1855; that of Leitrim on 6 July 1857; that of Cavan on 25 June 1857; and that of Monaghan on 1 July 1861 (see Appendix 2 to the Report from the Select Committee on General Valuation dated 27 July 1869).
In the course of the 14 years during which the work was in progress, agriculture became more prosperous and rents rose with the result that the valuation given to agricultural land in the North of Ireland was higher than in the South.
In the years after the Famine the country was in great distress. The social pressure on the valuators when they began their work in the South was to keep the valuations low. As they worked North the country was recovering and the prices for agricultural products were good. The linen industry in particular was thriving and the price of flax was high. Despite the table of prices contained in s. 11 of the 1852 Act the valuators tended to place higher values on lands in the North of the country.
*453
Where, as in the case of Wexford, a townland valuation already existed this provided the background material for the ‘valuators’ in valuing individual tenements. More important, Sir Richard Griffith, prepared a document known as his ‘Instructions to Valuators’ in an effort to guide his valuators towards a uniform method of valuing lands. This gave them guidance in analysing the quality of the soil, sub-soil and underlying rock. They were also to have regard to climate as affected by altitude, to facilities for getting seaweed or sand to improve the land and to other local factors such as proximity to market town and cost of transport. In the course of the present case the Griffith valuation has been attacked and it seems improbable that it in fact achieved the ‘one uniform valuation of lands and tenements in Ireland’ sought after in the preamble to the 1852 Act. Mr Eoghan McCarthy, the eminent property valuer and arbitrator, in the course of the hearing before me, described Griffith’s undertaking as ‘fantastic’, but pointed to many anomalies dating from the original valuation. It would appear that not all of Griffith’s valuators were equally conscientious or, alternatively, despite Sir Richard’s efforts, not all of them took identical views as to the value of land. Some striking anomalies occur particularly at townland borders. These may result from defects in the original townland valuation. For instance, Dr Bielenberg, the farm consultant, in the course of the hearing before me referred to two adjoining farms on the Ashbourne Road near St Margarets, Co. Dublin, with land of equal quality. One of them is valued at £1.13 per acre while the other is valued at £1.94 per acre. Such anomalies probably result from human frailty or error and hardly detract from Griffith’s great achievement. But they do mean that, even in his own day, his Valuation was open to ctiticism.
S. 34 of the 1852 Act contemplated that there could be general re-valuation of the lands of Ireland from time to time:
for the purpose of providing for the necessary revision of the valuation of the land in consequence of changes that may have taken place in the gross amount of the value of the several townlands from time to time.
The section appears to contemplate that there could be general revisions at intervals of 14 years and the grand jury of the county might petition for a general revision. However, no funds were provided for any such revision, no county ever petitioned to have a revision, and no revision was ever carried out. The individual land holder, unlike the individual owner of buildings, had no appeal against the valuation placed on his lands and no means of having his individual farm revalued.
It is this alleged absence of any right of the individual land holder to force a revaluation of his lands, together with the absence of any general revision of land valuation since the Griffith valuation was completed one hundred and twenty years ago, which has created the difficulties giving rise to the present case.
In the year 1902 the Royal Commission on Local Taxation in its report on the system of valuation in Ireland pointed out that the valuation of land in Ireland had already become quite out of date. At p. 3 of their Report the Commissioners write as follows:
The Act of 1852 provided for a general revision of the valuation, but no funds were provided for the execution of such work, and such a general revision has never been made, with the result that in the course of time the valuation has become quite out of date, consequent chiefly upon the alteration of prices of the various articles of produce and upon the changes in the cultivation of the separate holdings.
The Commissioners went on to call for such a general revision and added (at p. 4 of the report) that it was not easy to exaggerate the importance of ‘fair, uniform and accurate valuation as a preliminary to any just distribution of the burdens of local administration.’
In the 80 years which have followed no such revaluation had been undertaken.
PLEADING
The plaintiffs plead they are citizens of Ireland and are self-employed farmers dependent for their livelihood upon farming their respective farms. The first-named plaintiff, Mr Michael Brennan, resides on and farms 64 acres of land at Mountelliott, New Ross, County Wexford, which lands are farmed for milk production and have a rateable valuation in the sum of £73.75. The second-named plaintiff resides on a farm of 106 acres at Kilmarnock, Campile, County Wexford which lands are used for mixed farming, including the production of milk, and for tillage, and have a rateable valuation of £101.50. The third-named plaintiff Nicholas Fitzhenry, resides on and farms 106 acres of land at Glenduff, Barntown, County Wexford, which lands are farmed for milk production and have a rateable valuation of £72.50. The fourth-named plaintiff Bernard Devereux resides on and farms 150 acres at Mooretown, Carne in County Wexford, which lands are farmed for milk production and have a rateable valuation of £81.00.
The plaintiffs are members of an unincorporated association of persons known as the ‘P.L.V. Action Committee’ being an association comprised of farmers within County Wexford and organised under the auspices of the Wexford branch of the Irish Farmers’ Association. The plaintiffs bring this present action both on their own behalf, and as nominees and representatives of the members of the said unincorporated association.
The rateable valuation of the plaintiffs’ land is, in each case, the original rateable valuation assessed and fixed during the carrying out of the primary valuation of lands in Ireland during the years 1853 to 1865 pursuant to the provisions of the Valuation (Ireland) Acts 1852 to 1864.
The amount of the said rateable valuation determines the liability and the extent of the liability of each of the plaintiffs to pay to the State the taxes, charges and contributions imposed by or recoverable under the following statutes, that is to say:
(a) Income Tax on farming profits charged under Schedule D of the Income Tax Act 1967, pursuant to the provisions of the Finance Act 1974 ss. 13 to 28 as amended;
(b) Resource Tax charged for the year of assessment 1980 to 1981 upon persons occupying farmland at the rateable valuation in excess of £70.00, pursuant to the provisions of the Finance Act 1980 ss. 30 to 36;
(c) Health Contributions charged pursuant to the provisions of the Health Contributions Act 1979 and the Health Contributions Regulations 1979 to 1980 (SI Nos 107 of 1979 and 87 of 1980 respectively).
Further, the amount of the said rateable valuation determines the liability of each of the plaintiffs to pay rates upon agricultural lands to Wexford County Council and furthermore determines the eligibility and extent of eligibility of each of the plaintiffs to reliefs or benefits accruing under the following statutory provisions:
(a) Relief from local rates pursuant to the provisions of the Rates on Agricultural Land (Relief) Acts, 1939 to 1980.
(b) Grants available for higher education provided pursuant to the Local Authorities (Higher Education Grants) Acts, 1968 to 1978.
(c) Grants for housing pursuant to the Housing Acts, 1966 to 1979.
The plaintiffs plead that the valuations placed on the plaintiffs’ lands, as originally assessed and fixed, now bear no true or no reasonable relationship to the real value or productive capacity of the said lands and when compared to the valuations of other forms in Wexford and throughout the State are wholly inconsistent with, and in no way reflect, differences and true value and productive capacity as between the plaintiffs’ lands and those other farmlands.
The plaintiffs plead that these inconsistencies arise by reason of the following alleged circumstances:
1. The original valuations did not properly reflect the real value and productive capacity of the agricultural land upon which the various valuations were fixed.
2. The original valuations (in so far and to the extent that they did reflect the relative value and productive capacity of different lands) were assessed and fixed by reference to particular and limited scientific knowledge available at the time of the said valuations relating to soil types, the production potential of lands of different kinds, and other factors.
3. The said valuations were expressly based upon and confined to scales of commodity prices ascertained by reference to the prevailing markets for such commodities in the years 1849 to 1851 which said prices have long since become obsolete and irrelevant to the productive capacity and true value of the lands.
4. The original valuations took into account peculiar and local and temporary circumstances which have long since changed and become irrelevant to the present day value or true productive capacity of the lands.
5. The original valuations were based upon a style and method of farming and agricultural production which is wholly unrelated to the circumstances of the present day.
6. No revision or alteration has occurred in the valuations since the original valuation either by way of general revision or by way of individual appeal.
7. The original valuations of the plaintiffs’ lands as assessed and fixed as aforesaid were determined upon the basis that a general revision of valuations of land within the State would take place periodically.
8. No general revision of valuations has taken place in respect of agricultural land within the state pursuant to the provisions of s. 34 of the Valuation (Ireland) Act, 1852 since the carrying out of the said primary valuation.
The plaintiffs plead that as a result of the said factors the rateable valuations constitute an arbitrary, discriminatory, unjust, unequal, and inequitable basis for the imposition of taxes or the assessment of eligibility for State assistance.
Because of these factors the plaintiffs plead that the Valuation Acts, together with the other statutes to which they refer in their statement of claim, constitute an invidious and unjust attack upon the plaintiffs’ property rights contrary to Art. 43 of the Constitution; and delimit the plaintiffs’ rights of ownership in a manner which is inconsistent with the principles of social justice or not required by the exigencies of the common good. They also plead that the said statutory provisions constitute an arbitrary and unjust discrimination against the plaintiffs, contrary to Art. 40.1 of the Constitution.
The plaintiffs also plead that by virtue of these facts the rateable valuation of the plaintiffs’ agricultural land is obsolete, unrelated to present day values or productive capacities, and is inconsistent and unfair as between different agricultural holdings within the State and, because the rateable valuations do not in fact bear any constant or near constant relationship throughout the State to the true productive value and capacity of farmland, the said provisions contravene the guarantee of basic fairness of procedures in legislation provided for in Art. 40. 3 of the Constitution. The plaintiffs also plead that the failure of the legislature to allow them any right of appeal against the valuation placed on their lands or to provide them with any other means of rectifying, or altering the rateable valuation on their lands violates the guarantee of basic fairness of procedures provided by Art. 40.3 of the Constitution.
The plaintiffs accordingly claim a declaration that the Valuation Acts, 1852 to 1864 to the extent that they provide for the valuation for rating purposes of agricultural lands within the State are inconsistent with the Constitution, and other related relief.
The greater part of the Attorney General’s defence to the Action consists of a traverse of the plaintiffs’ various claims, but the Attorney General also adds two special pleas. The first of these is that the Oireachtas has in exercise of its Constitutional obligations under, inter alia, Art. 40 and 43 of the Constitution from time to time provided appropriate relief in respect of obligations imposed upon citizens based upon the rateable valuation system. And, secondly, the plaintiffs, not having exercised their rights under the provisions of the Valuation Acts with a view to bringing about an amendment of their valuations are not entitled to maintain these proceedings unless and until they have availed themselves of the said machinery.
The second-named defendant, Wexford County Council, pleads that the issues in this Action do not fall to be joined or contested by it but by the Attorney General. It also pleads that it has exercised and continues to exercise its function in and about the administration of the rating system, including the levying and collecting of rates in accordance with its statutory powers and obligations and not otherwise.
THE VALUATION (IRELAND) ACT, 1852
The 1852 Act begins with a recital in the following terms:
Whereas it is expedient to make one uniform valuation of lands and tenements in Ireland, which may be used for all public and local assessments and other rating …
It will be noted that the aim was to have ‘one uniform valuation of lands’ and that the valuation once made could be used for ‘all public’ as well as for local assessments.
S. 7 of the Act authorises the Commissioner of Valuation to appoint persons conversant and professionally employed in surveying and valuing land and houses to be ‘valuators’ for the purposes of the Act.
S. 11 provided that ‘in every valuation hereafter to be made or to be carried on or completed’ under the provisions of the Act the Commissioner of Valuation should cause:
every tenement and rateable hereditament hereinafter specified to be separately valued, and such valuation in regard to the land shall be made upon an estimate of the net annual value thereof with reference to the average prices of the several articles of agricultural produce hereinafter specified, all peculiar local circumstances in each case being taken into consideration, and all rates, taxes and public charges if any, (except tithe rent charge), being paid by the tenant.
The section then goes on to specify the following commodity prices:
1. Wheat at the general average price of seven shillings and six pence per hundred weight,
2. Oats at the general average price of four shillings and ten pence per hundred weight,
3. Barley at the general average price of five shillings and six pence per hundred weight,
4. Flax at the general average price of nine shillings per hundred weight,
5. Butter at the general average price of sixty-five shillings and four pence per hundred weight,
6. Beef at the general average price of thirty-five shillings and six pence per hundred weight,
7. Mutton at the general average price of forty-one shillings per hundred weight, and
8. Pork at the general average price of thirty-two shillings per hundred weight.
S. 34 of the Act gave rise to much debate at the hearing. It was referred to in general terms by the Attorney General in his defence and, at the hearing, the Attorney General submitted that the section provides a means whereby the plaintiffs can obtain any relief to which they are entitled and that the court should not therefore entertain their plea on the Constitutional issue.
S. 34 reads as follows:
And for the purpose of providing for the necessary revision of the valuation of the land in consequence of changes that may have taken place in the gross amount of the value of the several townlands from time to time, be it enacted, that at or after the termination of 14 years from the period of the final completion of the first general tenement valuation of any poor law union county or barony under the Act of the 9th and 10th years of Her present Majesty, Chapter 110, or under this Act, it shall be lawful for the Lord Lieutenant of Ireland on the application by the grand jury of the county, if he shall think fit so to do, to direct the Commissioner of Valuation to make a general revision of the valuation of any such poor law union, county, or barony and so from time to time at or after the expiration of every subsequent period of 14 years from the final completion of the preceding general revision of the valuation to cause a new revision to be made, and upon each such occasion to cause notice to be given to the grand jury of such county, county of a city or county of a town, previous to such direction, by letter from the Chief Secretary of the Lord Lieutenant, addressed to the Secretary of the grand jury of such county, county of a city or county of a town, and also notice to be given by letter from the Chief Secretary of the Lord Lieutenant addressed to the secretary of the Grand Jury of such county, county of a city or county of a town, and also notice to be given to the Clerks of the Boards of Guardians of the several Unions or Parts of Unions contained within such county, and the said Commissioners shall proceed therein as in the first general valuation or general revision of valuation of any county which may have been made under the provisions of this Act; and the Grand Jury of the said county, county of a city or county of a town, and all officers thereof, and every public officer or other person, duly authorised, shall perform all acts required to be done by them or him, in the same manner and within the same periods as hereinbefore is provided for the first general valuation or general revision of valuation of the said county, county of a city or county of a town, and shall have the same powers, privileges, and immunities in the performance of their respective duties, and the said new valuation when completed, shall have the same effect and operation, to all intents and purposes, as the former general valuation or general revision of valuation, and shall supersede the same, and that which is hereby enacted in relation to such first general valuation or general revision of valuation, and the several proceedings relating thereto, and all matters connected therewith shall apply in due course and under the same circumstances and conditions to such revision of the valuation to be made from time to time as aforesaid: Provided always, that at or after the expiration of seven years from the passing of this Act it shall be lawful for the Lord Lieutenant, on application by the Grand Jury of any county, to direct the Commissioner of Valuation to make a general revision of the valuation of any such county, either upon a scale of the average of the prices of agricultural produce in Ireland for the three then preceding years, ascertained under any Act which may then be in force in Ireland for the ascertaining of same, or if no such Act shall have been in force in Ireland for such three preceding years then according to the scale of prices of agricultural produce contained in this Act.
This section provides machinery whereby the Grand Jury of a county (now the County Council) may apply to the Lord Lieutenant (now to the Minister for Finance) after the determination of fourteen years from the period of the final completion of the first general tenement valuation of the county for a new general valuation and so on from time to time at intervals of fourteen years. This power is expressly stated to be granted ‘for the purposes of providing for the necessary revision of the valuation of the land’.
The proviso to the section provided machinery whereby after the expiration of seven years from the passing of the Act, the Lord Lieutenant could, on the application of the Grand Jury of any county, direct the Commissioner of Valuation to make a general revision of the valuation of any such county. No Grand Jury in fact applied within the period of seven years allowed by the proviso. The proviso accordingly became obsolete and was repealed by the Statute Law Revision Act, 1875.
The proviso, is however, interesting because it shows that the draughtsman contemplated that even within the period of seven years from the enactment of the 1852 Act a new scale of average prices of agricultural produce might be introduced by statute in substitution for the scale set out in s. 11. No such new scale was introduced and the scale set out in s. 11 remained, and remains to this day, the scale to be used in any general revision of the valuations of the county pursuant to the provisions of s. 34.
As previously noted, no County Council has ever applied for a general revision under s. 34, but it seems clear that it is entitled to make such an application and the Minister for Finance is entitled in an appropriate case, to direct the Commissioner to undertake such a general revaluation.
The Attorney General submits that the proper course for the plaintiffs to pursue is to bring mandamus proceedings against Wexford County Council for an order directing them to apply to the Minister for Finance for a general revision of the valuations of the lands in County Wexford pursuant to the provisions of s. 34 of the 1852 Act. He further submits that, until they have done this, their attack on the constitutionality of the statute should not be entertained.
EVIDENCE
In the course of the case I was referred to the reports of several governmental commissions and enquiries and heard evidence from a large number of witnesses. The key witnesses may be grouped under the following heads:
1. The plaintiffs;
2. Mr Eoghan McCarthy, the property valuer and arbitrator;
3. The soil scientists;
4. The auctioneers;
5. Dr. Bielenberg, the farm consultant;
6. The statisticians.
1. The Plaintiffs
The first named plaintiff, Michael Brennan, gave evidence to the effect that he farmed 64 acres at Mountelliott, New Ross, Co. Wexford. He was engaged in dairy farming. He normally kept 55 to 60 cows. He also carried 25 young heifers or drystock. He lived on the farm with his wife and three children aged 12 to 9. His rateable valuation was £73.75. He had received a demand for £984.56 rates which he had not paid. In the previous year he had been assessed for £122 resource tax. He had also received a demand in the current year for £85 health contribution. He had paid none of these demands.
He sold his milk to the Waterford Co-Operative which had a branch at Glenmore. The creamery sends out lorries to collect milk from all their suppliers at a fixed cost per gallon of milk regardless of whether the supplier is one mile, twenty miles or forty miles from the creamery. Distance from his market was not therefore a factor which affected him in the running of his farm business. He had given particulars of his farm to Mr Slattery, the auctioneer, and to Dr Bielenberg the farm consultant, and these were correct. His own opinion was that his land was marshy and overvalued. Portion of his farm was protected from flooding by an embankment with sluice gates. The land was heavy and slow to warm up in the Spring with the result that growth was delayed. If the weather conditions were good the land was very fertile. His brother James had what the witness described as as fine a farm of land ‘as stands in Wexford or Ireland’. There was no real comparison between the two farms. His brother James had good sound arable land which could be used for tillage or for pasture. James’s farm had an earlier Spring and a later season. James had a better farm, a much lower valuation and had no rates and virtually no tax to pay.
The second named plaintiff, Dermot Clancy, said he was aged 52 and had a wife and six children. The children were aged between 28 and 16. He farmed 106 acres and his valuation was £101.50. He was engaged in mixed farming and had 20 to 22 cows. He had 35 to 40 acres under tillage. He had received rates demands for £1,211.91 in 1980 and £1,355.02 in 1981. He had also been billed for resource tax in 1981 in the sum of £355.25. He did not pay these sums. He had also received a demand for £85 health contribution. He sold his milk to the Wexford creamery. They collected his milk at his door at no extra charge. His, brother, Joseph Clancy, of Ballykeeroguemore, was also a farmer and had a farm which was superior to the witness’s farm. Joseph had more land and drier land. Yet his valuation was £62.50 compared to £101.50 for witness’s farm.
The third plaintiff was Nicholas Fitzhenry. He farmed 106 to 108 acres. He was engaged in dairying and his rateable valuation was £72.50. He had received a demand for rates in the sum of £952.80. He had seen Dr Bielenberg’s description of his farm and agreed with it.
The fourth plaintiff was Bernard Devereux. He farmed 148 acres and his rateable valuation was £81. He had received a rates demand for 1980 in the sum of £950.40 and for 1981 in the sum of £1,071.70. He had also been billed for resource tax at £280 and for health contribution at £85. He had seen the description of his farm given by Mr Slattery and Dr Bielenberg, and agreed with these descriptions. His farm was a very poor farm, full of boulders. He was engaged in dairying and kept about 30 cows. He had no other source of income. He sells his milk to the Wexford cheese factory who collect his milk at no extra charge. He was not liable for income tax for the past two years as he had made no profit on his farm. He had received no relief against rates.
2. Mr Eoghan McCarthy
Mr Eoghan McCarthy joined the Valuation Office in 1933 and continued as a Valuer in the Valuation Office until 1 February 1962 when he became official Property Arbitrator under the 1920 Act as amended by the 1960 Act. As such he probably has unrivalled experience and knowledge of property values in Ireland. His father was also a valuer who joined the Valuation Office in 1894 and left it in 1934.
Mr McCarthy’s opinion, based on his experience, was that the poor law valuation had no real reference to the value of land. He would not therefore regard rateable valuation as a uniform guide to the value of land in Ireland. In some areas he would multiply the PLV by 100 to get the value of the lands, but in other areas he would multiply it by 300, 400 or 500. In itself the rateable valuation was no guide to the value of the lands. He considered that inconsistency between rateable valuation was ‘nationwide’. There was local consistency — perhaps where the valuations were the work of the same valuator — but there was no consistency either between counties or within counties. With the advance of modern soil science it was possible to make a much more accurate assessment of the productivity of land than was possible in Griffith’s time. It was quite practicable to carry out a revision of the value of lands.
3. The Soil Scientists
Dr James Collins was the first soil scientist to give evidence. He took his primary degree in Agricultural Science in 1963 and a Master’s Degree in 1965. He took his Doctorate in Soil Science in 1968 from the University of North Carolina in the United States of America. He is at present lecturer in Soil Science in University College, Dublin.
According to Dr Collins the modern system of soil classification began in Russia about a hundred years ago. The object of the exercise was to establish a scientific system for measuring the productivity of various soils and holdings. If a scientific method could be devised to measure the productivity of various holdings a rational method would be provided for a property tax on land. From Russia the science of soil classification spread to Western Europe and to the United States and ultimately to Ireland where, under the auspices of An Foras Taluntais, the National Soil Survey is attempting to classify all the soils of the country. The pioneering work in this respect, was the soil map of County Wexford prepared by Gardner and Ryan in 1964.
Modern soil scientists attempt to classify not only the properties of the soil but also the usefulness of various kinds of soil for particular forms of agricultural production. In Ireland soils are graded from 1 to 6 depending upon their suitability for tillage, number 1 being the best soil. They are also graded from A to F depending on their suitability for pasture, number A being the best soil. Of the two classifications the classification for suitability as pasture is by far the more important as over 90% of the agricultural land in the county is used for the purpose of producing grass. Approximately 7% is used for tillage purposes. But very good land may have a classification 1A showing that it is top class land for both tillage and pasture.
Soil scientists also attempt to classify soils by reference to the properties of the soil itself. The dominant soil series in County Wexford is Clonroche to which 40% of the soil of Wexford conforms. But there are other soil series with different properties known as the Macamore series, the Rathdangan series, the Screen series etc.
Sir Richard Griffith did not think highly of the soils which conform to what we now call the Clonroche series because these soils are naturally deficient in chemical fertilisers. On the other hand he thought very highly of alluvial soils because these were chemically well endowed and naturally fertile. The Macamore soils are not correctly referred to as alluvial soils because they were not laid down by a river. But they are similar. They consist of mud which was pushed into Wexford from the bed of the Irish Sea. They consist of a heavy marley material rich in chemicals. They have plenty of calcium, magnesium and potassium as well as other trace elements.
In Sir Richard’s day labour was cheap and the Macamore soils could be cultivated with spades on the ridge and furrow system, but nowadays, with lime and artificial fertilisers freely available, it is more important that land should be dry so that machinery can gain access to it. It is much cheaper to redress a natural deficiency in the land with artificial fertilisers than it is to install a drainage system. As a result lands in the Clonroche series are now regarded by modern soil scientists as being of the highest quality while lands in the Macamore series are regarded nowadays as being, in Dr Collins’ words, ‘almost a disaster’. They are wet, difficult to cultivate, slow to warm up in Spring and the soft soil is easily damaged by the hooves of cattle. Grade A soil should provide pasture over nine months in the year, but the growing season on an average well managed farm in the Macamore series, according to Dr. Collins, is no more than seven months.
As a result of these factors Clonroche soils would nowadays, normally, subject to lime conditions, rank as 1A whereas Macamore soils would be depreciated to 3C or 4D. Finally Dr. Collins referred to the fact that modern agriculturalists measure the productive capacity of pasture soils by reference to the number of ‘livestock units’ which the soil can carry, assuming competent management and appropriate use of fertilisers. A dairy animal would be considered as equal to one livestock unit whereas a sheep would be equivalent to one sixth of a livestock unit; cattle under one year would be regarded as equivalent to .3 of a livestock unit and cattle over one year but under two, would be regarded as equivalent to .7 of a livestock unit.
Dr Collins applied these principles to comparing the plaintiffs’ farms with certain comparison farms in Wexford and produced some startling results. The farm of the plaintiff Michael Brennan has a PLV of £73.75; that of his brother James Brennan has a PLV of £18.75. Yet, according to Dr Collins, Mr James Brennan has the better land and a superior farm. Mr Michael Brennan’s farm carries an average valuation of 22.6p per statute acre while Mr James Brennan, with better land, has a valuation of almost one third of this.
Likewise Dr Collins compared the farm of the plaintiff, Dermot Clancy, with that of his brother Joseph Clancy. Mr Dermot Clancy has 107 acres and a valuation of £101.50. Mr Joseph Clancy has 132 acres and valuation of £62.50. In Dr Collins’ opinion, Joseph Clancy has the slightly better farm. Yet the average valuation on Mr Dermot Clancy’s farm is 19s. whereas that on Mr Joseph Clancy’s is 9s. 6p.
The plaintiff, Nicholas Fitzhenry, has a farm of 108 acres with a valuation of £72.50. His farm is compared with the farm of Mr Joshua Techtor who has 101 acres with a valuation of £42.75. Yet Mr Fitzhenry has a very poor farm with no 1A land. 57% of his land is 3D, 31% 4C and 12% 6F. Mr Joshua Techtor by comparison has a very good farm with 87% of his land 1A, 7% 2B and 3% 5D. Mr Fitzhenry’s land carries an average valuation per statute acre of 13s. whereas Mr Joshua Techtor’s land carries an average valuation per statute acre of 8s. 6p.
The plaintiff, Mr Bernard Devereux, has so poor a farm that one witness doubted if it could properly be described as a farm at all. It consists of 148 acres largely covered by boulders. Yet it has a valuation of £80.76. Dr. Collins compared Mr Devereux’s farm with the farm of Mr Michael Nolan who has 149 acres with a valuation of £74.10. Mr Devereux has no 1A land, no 2A land, no 2B land and no 3C land yet his land carries an average valuation per statute acre of 11s. 82% of Mr Michael Nolan’s land is graded by Dr Collins as 1A. Yet his land carries an average valuation per statute acre of 10s.
Dr Collins estimates that under given management Mr Michael Brennan’s farm could carry 71 livestock units per 100 acres whereas Mr James Brennan’s farm could carry 87 livestock units per hundred acres. Mr Dermot Clancy’s farm could carry 76.8 livestock units per 100 acres whereas Mr Joe Clancy’s farm could carry 89 livestock units per 100 acres. Mr Fitzhenry’s farm could carry 69.7 livestock units per 100 acres whereas Mr Joshua Techtor’s could carry 86.3 livestock units per 100 acres. Mr Devereux’s farm could carry 48.6 livestock units whereas Mr Michael Nolan’s farm could carry 86.7 livestock units.
Dr Collins admitted that there is no necessary connection between the nature of soils and the value of a particular holding. But, other things being equal, you would expect a higher valuation on a farm with good soil than on a farm with bad soil. In Wexford, however, farms with soils which modern scientists would regard as good soils frequently carry a lower valuation than farms with poorer soils. This pattern was very typical of Wexford. He was not equally familiar with the rest of the country. But he could make some generalisations. The wet soils of the drumlins in Monaghan, Cavan and Leitrim were relatively highly valued. Many of them were valued at more than £1 per acre. Monaghan farmers often complain about this and envy the relatively lower valuations enjoyed by Meath farmers. Likewise the wetter soils along the Shannon river are highly valued relative to the better drained soils elsewhere in the country. Some of the best soils along the South coast of Cork were relatively lowly valued.
Dr Lee is a Principal Research Officer in the National Soil Survey Department of An Foras Taluntais. He works at Johnstown Castle, County Wexford where the headquarters of the national survey are. He graduated in 1957 from University College, Dublin with a degree in agricultural science. He worked for a short period with the Irish Sugar Company. Then he worked for approximately three years as an agricultural adviser and since 1960 he has been attached to the Soil Survey Department in Johnstown Castle.
He took his Ph.D degree in soil science in Dublin University in 1966 and he was a Kellog foundation scholar in the United States of America between 1966 and 1967. He took up his scholarship in the University of Wisconsin and during these years he worked with the United States Department of Agricultural Soil Survey. His speciality is land classification for agricultural purposes and land use research. Dr. Lee generally supported Dr Collins’ approach to the assessment of the productivity of land. His own researches in County Wexford had tended to confirm on a macro scale Dr Collins’ conclusions on the micro scale. Witness had, in conjunction with Mr J. P. Horton of the Department of Geography, Trinity College, Dublin, undertaken a study on tax assessment of agricultural land in Wexford County.
Witness’s overall conclusion was that there was little relationship between the poor law valuation of land and the productivity of land in Wexford under modern farming practice. He had reached the conclusion that the anomalies discovered by Dr Collins in his detailed study of the eight farms referred to above were widespread in Wexford.
He agreed with Dr Collins that when the Griffith valuations were carried out early in the second half of the nineteenth century the cropping capacity of land would be largely determined by the inherent nutrient status of the soil for the simple reason that artificial fertilisers were unknown and the liming of lands had not taken the form we know today. At that time particular soils like the Clonroche series were very infertile soils because of lack of lime and lack of artificial fertilisers. By contrast the Macamore soils were basically rich soils. In the mid 1800’s the yields of crops on the Macamore soils would be higher than on the Clonroche soils. At that time the population was large, labour was cheap and the Macamore soils could be cultivated on the ridge and furrow system by men working with spades. Nowadays, with mechanisation, there was a totally different situation. It would be inconceivable to talk about a ridge and furrow system on Macamore soils to grow a crop of sugar beet because of the costs of labour in setting up a ridge and furrow system. Nowadays the nutrient status of the soil was of secondary importance to the physical status.
Sir Richard Griffith had, in his instructions to his valuators, emphasised the intrinsic qualities of the soil. This approach was irrelevant to-day and the valuations made under it were also irrelevant. This was not in itself any reflection upon Sir Richard Griffith’s valuation although some of his assumptions would not nowadays be regarded as scientifically correct. It was simply that one could not rely on a valuation carried out 150 years ago as a guide to the productive capacity of lands under modern conditions of farming.
A sample survey which Dr Lee had done for different counties had led him to the conclusion that class 1A soil carried a different valuation in different counties. On the basis of the sample it was valued at 83p per acre in Carlow; at 63p per acre in Kildare; at 57p per acre in Westmeath; and at 43p per acre in Wexford.
There was a gross inconsistency in the valuations as between counties. Wexford, with a valuation of 54p per acre, had 60% class A land. Leitrim had an average valuation of 42p per acre. But there was no class A land and no class B land in Leitrim. There was very little class C land. Leitrim was dominantly class D land. This amounted to a gross inconsistency in the valuation.
Dr Lee accepted that productivity was not necessarily a scientific guide to the value of land. Other factors would enter depending upon the use to which the land was to be put. But the Griffith valuation was an attempt to value land by reference principally to its productivity. The Griffith valuation was however no longer a safe guide to either the productivity or the value of land. The system used by the National Survey based on the classification of various soils was a more reliable guide to productivity. But the National Soil survey of the country was not yet complete, and even if a decision was now made to press ahead with it, it would take eight years to complete a scientific survey of all the lands in the State. Such a survey, once completed would provide the scientific basis for a property tax. Under such a scheme the farmers of Wexford might find themselves paying more in tax, while the farmers of Leitrim, Cavan and Monaghan might pay less. But gross anomalies which presently exist within Wexford would be removed. Dr. Lee, however, was not himself advocating a property tax. He thought there were simpler and more reliable methods of assessing farmers’ income. If the object was to tax farmers’ income he thought this could best be done by means of an income tax system based on farm accounts.
4. The Auctioneers
Mr W. G. Slattery Miavi of the firm of Messrs George W. Warren Estates (Gorey) Ltd prepared a valuation of the plaintiffs’ four farms and of the four comparison farms. Mr. Slattery has been practising as an auctioneer in Wexford for seventeen years and has experience dealing with land sales, land letting and sales of livestock and other farm produce. In preparing his estimate of market value Mr Slattery proceeded on the assumption that land of top quality in Wexford was worth £2,000 per acre. He found it necessary to make this assumption because of the erratic nature of the market in land in Wexford in the eighteen months prior to his making his valuation.
Mr Slattery’s opinion as to the market value and of the letting value of the plaintiffs’ four farms and the four comparison farms can be presented in tabular form:
Owner
Area
PLV
Estimate of Market Value
Estimate of Letting Value
Plaintiff
Michael Brennan
64 acres
£73.75
£70,500
£4,100
James Brennan
60 acres
£18.75
£100,000
£5,400
Plaintiff
Dermot Clancy
106 acres
£101.50
£133,500
£7,160
Joseph Clancy
131 acres
£62.50
£194,100
£9,950
Plaintiff
Nicholas Fitzhenry
107 acres
£72.50
£100,000
£4,000
Joshua Techtor
100 acres
£42.75
£169,000
£8,400
Plaintiff
Bernard Devereux
147 acres
£80.70
£50,000
£1,600
Michael Nolan
148 acres
£74.10
£253,500
£13,810
Michael Brennan’s farm was valued at £1.15 per acre whereas James Brennan’s more valuable farm was valued at 31p per acre. Bernard Devereux’s farm was valued at 55p per acre whereas Michael Nolan’s more valuable farm was valued at 50p per acre. The market value per £1 valuation was £956 in Michael Brennan’s case and £5,333 in James Brennan’s case. The market value per £1 rateable valuation was £620 in Bernard Devereux’s case and £3,421 in Michael Nolan’s case.
In the course of the case counsel for the Attorney General stressed that the four plaintiffs has been carefully selected to illustrate the anomalies of the valuation system. I am quite satisfied that they were carefully selected by the PLV Action Committee, and that the comparison farms were chosen to highlight the anomalies of the system. This of course is no reflection on experts like Dr Collins and Mr Slattery who simply reported on specific farms brought to their attention. But I have had to consider how widespread anomalies of the kind illustrated by the eight comparison farms are throughout the country.
A number of auctioneers were called to show that anomalies in the valuation system were widespread throughout the country.
Mr Brendan O’Meara is an auctioneer who has been in practice in North Cork and West Waterford for approximately eighteen years. In his opinion, based on his experience, the relationship between rateable valuation and the market price of land is very haphazard. He produced a table of 55 sales of which he had knowledge which showed that the price per £1 rateable valuation had varied from £612 in one to £45,166 in another. Mr O’Meara admitted that very poor land usually had a low valuation and very good land usually had a high valuation but in the middle area the relationship between poor law valuation and the selling price of land was blurred. In fact he, as a valuer, could not rely on the poor law valuation as a guide to the value of land.
Mr Burns who is an auctioneer in practice in Limerick for the past seven years gave evidence to the same effect. His firm never used rateable valuation as a guide to the value of land. It was not a fair guide. There was too big a discrepancy. There was no way he could relate £1 PLV to the price he would get for the land. He too produced a table of 35 sales with which he was familiar from which it appeared that the price per £1 rateable valuation had varied from £371 in one case to £9,208 in another.
Mr Thomas Murphy who is an auctioneer in practice in Sligo for the past twenty-five years gave evidence to the same effect. In his opinion the poor law valuation was not a reliable guide to the value of land. It was not a matter to which purchasers usually paid much attention. They might however take it into account if the PLV of the land to be purchased would, if taken together with the PLV of the lands they already held, take them over a particular threshold. If for instance a man already had a farm and the PLV of the new farm would, if added to the PLV of his present farm, bring his total PLV to over the figure of £70 this would be a matter which he might take into consideration in deciding whether to buy or not. Apart from this he did not find that the amount of the PLV was a significant factor in the purchase of land and certainly he would not pay regard to it in deciding what the rental of a farm should be. He too produced a table of 23 sales from which it appeared that the price per £1 rateable valuation had varied from £320 in one case to £9,000 in another.
I allowed the various auctioneers to produce the tables of sales referred to not on the basis that the tables of sales were in themselves statistically significant but because they formed part of the material on which the auctioneers based their professional opinion that the PLV of land was not a safe guide to its market price or letting value.
5. The Farm Consultant
Dr Nicholas Bielenberg, the well known farm consultant, expressed the opinion that while there was some relationship between the poor law valuation of very good land and the poor law valuation of very bad land there was an extremely wide variation with respect to the poor law valuation of farms of similar quality.
Dr Bielenberg attempted to assess the potential incomes from the eight comparison farms in accordance with the Farm Modernisation Scheme of the Department of Agriculture. His conclusions can be presented in tabular form as follows:
Owner
Estimated Gross Income
Estimated Net Income
P.L.V.
Rates
Rates as % of Income
Plaintiff
Michael Brennan
£10,320
£5,760
£73.75
£964.65
16.74%
James Brennan
£12,440
£7,332
£18.75
Nil
0%
Plaintiff
Dermot Clancy
£15,687
£8,023
£101.50
£1,328.00
16.55%
Joe Clancy
£20,916
£11,364
£62.50
£817.50
7.20%
Plaintiff
Nicholas Fitzhenry
£14,190
£7,920
£72.50
£948.00
11.96%
Joshua Techtor
£19,350
£10,800
£42.75
£599.00
5.17%
Plaintiff
Bernard Devereux
£4,930
£2,746
£80.76
£1,056.00
38.45%
Michael Nolan
£29,670
£16,560
£74.10
£969.00
5.85%
Dr Bielenberg drew the conclusion that in the case of the eight farms referred to there was no relationship between the poor law valuation and the income potential of the farms. Rates as a percentage of income varied from nil per cent to over 38%. Income potential per £ valuation varied from £33 to £365.
Dr. Bielenberg further expressed the opinion that discrepancies such as he found on the eight farms studied in Wexford could be found in most other counties in Ireland. At the extremes of good or poor land a relationship could be found between poor law valuation and the productivity of farms. But in between there was no relationship. He considered that rates levied on the basis of the Griffith valuation were inequitable. Farmers should be taxed on their actual incomes.
Witness said the picture presented by the eight comparison farms was not a freak situation. It was fairly representative of anomalies one could find in other counties. They seemed to exist all over the country. At the townland boundaries the variations in valuation could be quite dramatic.
The Wexford cases were representative of anomalies to be found all over the country. He would not say that the plaintiffs’ farms were untypical though he admitted that Mr Devereux’s farm was unusual. From his experience he would say anomalies of the kind presented by the eight comparison farms were very widespread.
6. The Statisticians
All the above expert evidence appears to point in the same direction. The only expert called on behalf of the State was Mr Colm McCarthy who is a statistician of the firm of Messrs Davey Kelleher McCarthy, Economic Consultants. Mr McCarthy took his primary degree in Commerce, his Masters degree in Economics, and worked with the Central Bank and the Economic and Social Research Institute before setting up as an Economic Consultant. He undertook a statistical study to attempt to quantify the extent to which the actual realised sale prices of agricultural land in Ireland are related to the rateable valuations. Mr McCarthy conceded that an argument could be made that Griffith’s valuation attempted to measure the physical productivity of land and that any judgment on the fairness or accuracy of Griffith’s valuation should compare physical productivity or potential income with the poor law valuation. Mr McCarthy doubted however that such an approach would be feasible. The only information available which was entirely objective and sufficiently extensive in coverage was information concerning actual sale prices. Moreover, economists would argue that sale price is the best assessment of the income potential of any asset.
Mr McCarthy’s sample of sale prices and poor law valuation was based on Land Commission sales record sheets. From these records he excluded:
1. Sales by private treaty on the basis that the purchase price could not easily be verified.
2. Sales which involved sub-division of land on the basis that the rateable valuation would not have been apportioned between the different parcels of land by the valuation office.
3. Sales where in the opinion of the Inspector the land was bought for purposes not connected with agriculture.
4. Sales involving land of less than five hectares.
5. Sales where information on the rateable valuation of any buildings on the land was not given.
After these exclusions the numbers of observations remaining was 152. Mr McCarthy considered a sample of 152 more than adequate for the purpose of the statistical study in hand. It was larger than that commonly used. In his statistical investigations of the samples he had used a technique called regression analysis, and statisticians regularly use this technique with samples as small as 20 or 30 observations.
Given data on, say, two variables, a regression line can be calculated which fits the data as closely as possible. Associated with this regression line is a set of ancillary statistics which attempt to measure the degree to which the regression line does actually fit the data.
The most important of these statistics is called R squared. A value of R squared close to O corresponds to a regression fit which is poor. A value close to 1 indicates a close fit of the regression line to the data. Mr McCarthy concluded that there was a strong linear relationship between the sale price and the rateable valuation of the holdings in the sample. The R squared statistic indicated to him that 75% on the variation in sale prices corresponded to variations in the rateable valuations of the holdings. Professor Brendan Walsh, Professor of National Economics in University College, Dublin, conceded that this was a very high statistical relationship.
The above results were based on applying the method to the relationship between the sale price and the rateable valuation of the holdings referred to. When Mr McCarthy applied the same method to the price per hectare realised in the sale of land he arrived at a different and less satisfactory conclusion. In this case only 41% of the variation in sale price per hectare corresponded with variations in rateable valuation per hectare.
Mr McCarthy’s conclusion was that there was a positive relationship, based on the sample taken, between the sale price and the rateable valuation of lands in the years 1980 to 1981. This relationship was stronger when expressed per farm and weakened when expressed per hectare. Generally, the relationship is stronger for larger holdings.
In cross examination, Mr McCarthy said that rateable valuation could be regarded as an approximate guide to the price of land. However, if he were dealing in land he would not use rateable valuation as a guide. He accepted that if the objective of the State was to tax farmers income the valuation system did not come ‘respectably near’ to providing a uniform system for assessing income. Mr McCarthy also conceded that there was wide variation in the valuation of lands of similar quality in different counties and that the present system of valuation of lands in the State clearly was not a uniform system.
So far as the sale price of lands per hectare was concerned Mr McCarthy conceded that only 41% of the variation in sale prices was explicable by reference to variations in valuation. It followed that 59% of the variation had to be explained by factors other than valuation. It followed that so far as the price of land per acre or per hectare was concerned rateable valuation was not a good guide to the price of land.
Conclusions
The plaintiffs’ experts at all times conceded that there was a relationship between valuation and the price of farms in the sense that large farms would tend to have a high valuation and a high selling price and that farms in the valley would tend to have a higher valuation and a higher selling price than hill farms. These factors may tend to reconcile the evidence of Mr McCarthy with that of the plaintiffs’ experts. I am satisfied on the basis of the evidence as a whole:
1. That the existing valuation system does not provide a uniform system for valuing lands throughout the State.
2. That there is no consistency between county and county or within individual counties.
3. That the valuation system has failed to reflect changing patterns of agriculture with the result that land which modern agriculturalists would regard as good land often carries a low valuation while land which modern agriculturalists would regard as inferior often carries a higher valuation.
4. That the whole system is shot through with unnecessary anomalies and inconsistencies.
This is not the first time that these conclusions have been expressed in public. I have already referred to the report of the Royal Commission on Local Taxation in the year 1902 with its findings that:
In the course of time the valuation has become quite out of date, consequent chiefly upon the alteration of prices of the various articles of produce and upon the changes in the cultivation of the separate holdings.
The then Commissioner for Valuation, Mr J. G. Barton, giving evidence before the Royal Commission on Local Taxation on 6 May, 1897, conceded that the Irish valuation system was then so out of date that he could not defend it.
He had put before the Commission a system for assessing the full annual value of land and making it taxable either in the hands of the tenant or in the hands of the landlord. The minutes of evidence taken before the Commission discloses that at question 3375 he was asked could he not get at the annual value of land under the system presently in operation to which he replied:
The system in operation has been in operation so long that I cannot defend it. A valuation of land, in my opinion, ought to be made certainly every fifteen or twenty years at least.
Two and a half years later on 30 November 1899 the Commission gave Mr Barton an opportuntity to reply to certain critics of his department and (at question 27,250) asked for his views on a revaluation to which he replied:
I think in the first place that a revaluation of Ireland is necessary.
The following interchange then took place:
Question:
Why do you think it is necessary; tell us shortly; just under a few heads?
Answer:
The valuation of Ireland was made forty years ago.
Question:
It is old?
Answer:
Yes.
Question:
It is out of date?
Answer:
Yes. The provisions made for revising it annually are not sufficient to keep it up to date. In the first place there is no provision for the revaluing of land …
The Commissioner must have meant that there was no means whereby the individual land holder could have his land revalued. Or, more likely, he discounted the system whereby a County Council could look for a general revaluation of the land in its county under the provisions of s. 34 of the 1852 Act.
In the present case the Attorney General has submitted that the plaintiffs, prior to raising the constitutional issue, should have sought to compel Wexford County Council to seek a revaluation of the lands in the county. The problem is that such a revaluation, if undertaken, would have to be carried out in accordance with the scale of prices prescribed by s. 11 of the Act which are the average prices of certain agricultural products for the years 1849 to ’52. I accept Mr Eoghan McCarthy’s statement that to attempt such a revaluation on such a basis in modern times would be ‘a ludicrous exercise’.
This problem was specifically adverted to by the Valuation Office in a report on land valuations in January, 1968. Paragraphs 16 and 17 of the report read as follows:
16. The annual revision of valuations was intended to take account not only of changes in the boundaries of holdings but of changes in the value of properties of a class indicated as liable to frequent changes in value. The classes indicated do not include land. It was intended that changes in the value of land should be dealt with by way of a general revision of the valuation of any rating area (s. 34 of the 1852 Act). General revisions of the same rating area were not to take place more often than one each fourteen years. The initiative in requesting a general revision lay with the Grand Jury (since 1898 with the County Council) for the area concerned. In fact no Grand Jury or County Council ever moved for such a general revision and none was ever made.
17. If the Minister for Finance were now, on a County Council’s request, to direct the Commissioner of Valuation to carry out such a general revision of valuation it would, under the present laws, have to be based on the same scale of produce prices which was included for the primary valuation. As the scale was drawn up by reference to the agricultural conditions pertaining over a century ago, just after the Famine, it would hardly be realistic to proceed with the general revision on that basis.
I am therefore driven to the conclusion that there is no means whereby the plaintiffs can get effective relief under the existing laws.
The discrepancy in valuations as between district and district and county and county have also been adverted to. Mr Barton in his evidence before the Commission on Local Taxation on 6 May 1897 referred to the origin of these discrepancies. (See reply to Question 3313 in the Minutes of Evidence). He put the matter as follows:
Yes: when the valuation commenced in 1852 Ireland was in a very distressed condition. It was just after the Famine years, and the result was that the valuations made in the first few years were very low indeed; in some cases they were fully 50% below the rents. The valuers commenced in the South and they worked up North; as they got further North the prices were improving, the country was getting more prosperous and when they finished in Armagh in 1865 prices had nearly reached their highest point, I think they reached their summit early in the ’70’s, and during this period taxes had fallen very considerably. Of course, when the valuers saw rents rising and saw tenant’s interests sold for such large sums naturally the valuation rose with it. The result has been that whilst in the South the valuation is very much below the judicial rents, in the North it is rather above it …
Mr Gleeson, in opening the case on behalf of the plaintiffs, drew attention to the property qualification formerly required of jurors and in particular to s. 2 of the Juries Act, 1927. Under the provisions of s. 2 the Minister for Justice could prescribe the rateable valuation of land which was to be the minimum rating qualification for every jury district and could by any such order, prescribe different rateable values in respect of different classes of land. Pursuant to this section the Minister made the Jurors (Minimum Rating Qualifications) Order, 1927 (S.I. No. 92). This Order shows significant variations in the minimum rating qualifications as between different jury districts.
In the case of de Burca v Attorney General [1976] IR 38 the plaintiffs attacked, as being unconstitutional, both the property qualification itself and also the fact that the Minister had fixed, as the property qualification for jurors, lands with different poor law valuations in different parts of the country. The Supreme Court ruled that the property qualification for jurors was unconstitutional and therefore had not to deal with this secondary point. One possible defence of the Minister’s Order however, was that what the Minister was attempting to do, was to redress the known inconsistencies in the poor law valuation system and to ensure that the rating qualification would in fact be the same so far as the actual value of lands was concerned, in the differing districts.
Walsh J in his judgment in the Supreme Court appears to accept this view of the matter. He says:
In the result, in my opinion, it is not necessary to make any detailed observations on the arguments submitted in support of the proposition that s. 2 of the Act gave the Minister for Justice power to determine arbitrarily different standards for jurors in different parts of the country. It is sufficient to say that if that were the true construction of the Act then, in my view, the provision would be unconstitutional. However, I think the purpose of the Act of 1927 was to enable an equalisation of actual wealth to be achieved in so far as that is reflected by the rateable valuation of property subject to such valuation, and that any Order made by the Minister that did not reasonably achieve such an equalisation would be ultra vires the Act. (at 69)
In other spheres, however, the Oireachtas and the Government have not been equally sensitive to the defects and to the inconsistencies in the valuation system. In Wexford, during the years with which this case is concerned, rates have been standing at £13.00 to the pound. The effect of this has been to multiply inaccuracies resulting from the original valuation. The fact that farmers with a low valuation have obtained exemption or relief against rates does not cure this defect because the relief is itself related to the amount of the poor law valuation of the lands. Thus, in the present case the plaintiff, Michael Brennan, has been liable in the years under discussion for almost £1,000.00 rates on his land whereas his brother, James Brennan, with what I am satisfied is a better farm, has been liable to pay no rates at all.
Sometimes the Oireachtas has fixed liability to a tax by reference to the poor law valuation of farms. For instance the resource tax formerly payable under s. 30 of the Finance Act, 1980 applied only to farmers whose lands were valued at more than £70.00. As a result the plaintiff Michael Brennan was liable for resource tax while his brother James was not.
At times, the authorities have used a multiplier related to the PLV. For instance, the ‘notional’ income of a farmer under s. 21 of the Finance Act, 1974 was to be forty times the poor law valuation of his farm. The ‘reckonable income’ of a farmer for the purposes of the Health Contributions Act, 1979 is deemed to be one hundred and seventeen times the poor law valuation of his farm in accordance with s. 2 sub-s. 2 of the Health Contribution Amendment Regulations 1980, (SI No. 87 of 1980).
PLAINTIFFS’ LEGAL SUBMISSIONS
The plaintiffs, in their submissions, distinguish between the Valuation Acts themselves and other legislation which uses the valuation placed on land under the Acts as a means of assessing liability for tax or eligibility for social assistance. Plaintiff Dermot Clancy complains that his son was refused a university grant. But he does not complain of the system of university grants. Nor does he complain of a system of university grants where eligibility is related to the value of lands. His complaint is that because of various defects in the valuation system the valuation placed on his lands is a false one, as a result of which his son is denied a university grant while the sons of other farmers with better farms but lower valuations, are eligible. He also complains that, under the law as it stands, he has no practical means of having the valuation placed on his lands revised. The Valuation Act of 1852 contemplated that the valuation of lands made under it would be used ‘for all public and local assessments’. If, therefore, the valuation actually made under the 1852 Act was still reasonably accurate or approached uniformity I do not think the plaintiffs could complain that it was used for the purpose of assessing liability for national as well as local taxes or eligibility for national as well as local benefits. The plaintiffs’ real complaint is that the valuations in fact placed on land are not a true guide to the value of lands under modern conditions. The measurement of value is itself inaccurate and out-dated. It does not give a true or equitable measure of the value of lands. Any scheme using it as a method, therefore, for assessing liability to tax or eligibility for social benefit will also be defective, not because of any defect in the scheme itself, but because it is based on a defective method of measuring the value of land.
The plaintiffs in their attack on the valuation system relied upon Art. 43, Art. 40.1 and Art. 40.3 of the Constitution.
Mr Gleeson conceded that in view of the Supreme Court’s decision in Blake and Others v The Attorney General [1981] ILRM 34, it was not open to the High Court to entertain his submission on Art. 43 of the Constitution. But he made the submission formally for the purposes of preserving his rights. The plaintiffs’ principle submissions were on Art. 40.1 and on Art. 40.3.
Mr Gleeson submitted that because the Valuation Acts failed to provide a rational and fair system of valuing citizens’ property they failed to hold the citizens equal before the law. He admitted that dicta in the judgments in Quinns Supermarket v Attorney General [1972] IR 1 and in Murtagh Properties v Cleary [1972] IR 330, to the effect that Art. 40.1 refers to human persons for what they are in themselves rather than to any lawful activities, trades or pursuits which they may engage in, create difficulties for the submission. On the other hand, Mr Gleeson submitted that the Constitution recognises the right to private property as being closely related to man’s human personality. All guarantees of private property are in the section of the Constitution headed ‘Fundamental Rights’ and Art. 43 recognises that man ‘in virtue of his rational being’ has the natural right, antecedent to positive law, to the private ownership of external goods.
Mr Gleeson also admitted that any adverse discrimination against his clients contained in the valuation system was not advertent discrimination in the sense that there was no intention by the administration or the legislature to victimise his clients or do them damage. He submitted however that the adverse discrimination in fact effected was as damaging to his clients as if it had been intentional and submitted that discrimination adverse in its effects, though not advertent, could still be invidious. He relied on de Burca and Another v The Attorney General [1976] IR 38.
The plaintiffs made three submissions on Art. 40.3 of the Constitution.
First they submitted that one of the unspecified rights guaranteed to the citizen under Art. 40.3 is a right to a rational basis for the assessment and collection of taxes. The plaintiffs conceded that the Constitution provides for the collection of taxes and that the State has a wide range of taxes open to it and can choose which form of taxation to adopt, but the citizen has a correlative right that the taxation system should have some form of rational basis. The present valuation system had no rational basis. Accordingly it did not admit of any rational classification of the citizens for taxation purposes and came close to operating like a lottery. The fact that there might be, on Mr Colm McCarthy’s evidence, a significant statistical realationship between the sale price of farms and the valuation placed on farms did not show that the valuation system had a rational basis because the evidence proved huge inconsistencies in the valuation of lands of equal value both between counties and within counties.
The plaintiffs also submitted that the Valuation Acts, by failing to provide a means whereby a farmer who claimed that the valuation placed on his lands was false or out-dated could have that valuation reviewed were inconsistent with the guarantee of fair procedures implied in Art. 40.3. of the Constitution. They relied on In Re Haughey [1971] IR 217 and Glover v BLN [1973] IR 388; Burke and Another v Minister for Labour and Others [1979] IR 354 and Foley v The Irish Land Commission [1952] IR 118.
Thirdly, the plaintiffs submitted that the Valuation system presently existing failed to respect the plaintiff’s right to private property and constituted an unjust attack on their property rights. They relied on O’Brien v Keogh [1972] IR 144; Central Dublin Development Association v Attorney General (1975) 109 ILTR 69; O’Brien v Manufacturing Engineering Company [1973] IR 334 and Moynihan v Greensmyth [1977] IR 55; Blake and Others v Attorney General [1981] ILRM 34; The State (Burke) v Lennon [1940] IR 136; McGee v Attorney General [1974] IR 284 and de Burca v Attorney General [1976] IR 38.
They also relied on certain European and American cases, which, they submitted, were relevant to the concept of equality before the law enshrined in Art. 40.1. The cases referred to were Italy v The Commission [1963] ECR 165; Gast Realty Company v Schneider Granite Company 240 US 55; Greene v Louisville and Interurban Railway Company 244 US 499; Royster Guano Company v Virginia 253 US 412; Tax Commissioners v Jackson 283 US 522; and Charleston Association v Alderson 324 US 182.
DEFENDANT’S LEGAL SUBMISSIONS
The Attorney General, in opening, said that the plaintiffs had, in effect, challenged eight different statutes or statutory schemes besides the Valuation Acts. Their submissions, if valid, had implications also for the ‘farmers’ dole’, eligibility for which was related to the poor law valuation of the applicants’ lands, and for the equitable jurisdiction of the Circuit Court in so far as this was based on the poor law valuation of lands the subject matter of the proceedings.
The assignment of certain values to land was not in itself unfair and could not be unconstitutional. The plaintiffs could not complain of the existence of a statutory valuation but only of the use made of it. They should therefore be attacking not the valuation system but the various statutory schemes which made use of it.
The defendants conceded that there can be no presumption of constitutionality in the case of a statute enacted before the passing of the Constitution. They referred to the State (Sheerin) v Kennedy [1966] IR 379, but they submitted that weight must be given to the fact that the Oireachtas has, since 1937, amended, adapted or made use of a pre 1937 statute. They referred to a passage which occurs at page 340 in the judgment of Pringle J in O’Brien v Manufacturing Engineering Company Limited [1973] IR 334. If a preconstititional statute, by being amended or adopted by a post constitutional statute, obtains the benefit of the presumption of constitutionality then such a statute should not be ruled unconstitutional unless no constitutional construction is reasonably open. They relied on McDonald v Bord na gCon [1965] IR 217 at p. 239, and East Donegal Co-Operative Livestock Marts Ltd v The Attorney General [1970] IR 317. They relied upon a passage in the judgment of Walsh J in The People (Attorney General) v Conmey [1975] IR 341 where he says:
In view of the fact that s. 29 of the Act of 1924 was expressly re-enacted by s. 48 of the Courts (Supplemental Provisions) Act 1961, it must be given the benefit of the canons of construction laid down by this Court in McDonald v Bord na nGon and in East Donegal Co-Operative v The Attorney General. The effect of this is that it must be assumed that the Oireachtas in 1961 did not intend to violate the constitutional provisions referred to unless the statutory provision leads to no other possible conclusion. (at 362)
The defendants submitted that the application of the machinery of the Valuation Acts to a post 1937 statute had a similar effect. It was as if the Valuation Acts had been promulgated de novo.
The Attorney General also submitted that the state of affairs in 1937, when the Constitution was enacted, was also significant. The valuation system was then in existence and formed the basis of local taxation. Farmers were than an even more important part of the population then they are now. There were some 260,000 farmers in 1936 compared with 155,000 now. Farmers with lower valuations had to pay rates then, unless relief was available through the agricultural grant. No one then thought that Art. 40 of the Constitution was relevant to the valuation system though some of the anomalies in the valuation system then existed. Not all had developed since 1937.
Defendant’s counsel submitted that the courts should be slow to hold that a statute was unconstitutional in the absence of some express constitutional provision which the statute violated or with which it was clearly inconsistent. They referred to the reference of the Offences Against the State (Amendment) Bill 1940 [1940] IR 470 (at p. 478). They referred also to O’Byrne v The Minister for Finance and Another [1959] IR 1, (judgment of Maguire CJ at p. 37, and to Melling v O Mathghamhna [1962] IR 1 (judgment of Lavery J at p. 13).
Counsel further submitted that the taxation system and financial legislation generally were peculiarly matters for the Government and the Oireachtas. They referred to Artt. 17, 21, 22, 23, 24, 26 and 28 of the Constitution as illustrating that the management of the financial affairs of the State is given a peculiar status by the Constitution and is confined largely to the executive and to the legislature. This, they submitted, was a sphere into which the courts should be very slow to enter unless the clearest possible infringement of constitutional rights was established. The courts, they submitted, should not rule a revenue statute unconstitutional if any reasonable state of facts existed which might reasonably justify it. They relied upon a passage in the judgment of Kenny J in Murphy v The Attorney General Supreme Court 1979 No. 183 25 January 1980.
The defendants relied upon a number of American authorities in support of the same proposition. In McGowan v Maryland 366 US 420, it was held (at p. 426) that a statutory discrimination would not be set aside if any state of facts reasonably might be conceived to justify it. They also relied on Dandridge v William 397 US 471.
The fourteenth amendment to the American Constitution corresponded, they submitted, with Art. 40.1. of our Constitution. The American courts had shown a certain degree of deference towards the legislatures in applying the fourteenth amendment in the economic and fiscal fields. The Irish courts should show similar deference in applying Art. 40.1; they should not embark upon an analysis of different forms of taxation or purport to prefer one form of tax to another. The courts should not interfere unless the revenue statute is palpably arbitrary and discriminatory. If the statute bears any reasonable relation to the objective which the legislature hopes to achieve the court should not interfere. They relied on Nebbia v New York 291 US 503; McLaughlin v Florida 379 US 185; Lloyd Stores of Ohio v Bowers 358 US 522.
If, they said, fiscal legislation contained a minimum of rationality the courts should not interfere with it. They relied on San Antonio Independent School District v Rodriguez 411 US 1.
Art. 43 of the Constitution, they submitted, has no application to the present case because it is concerned with the protection of the institution of private property and not with the property of the individual citizen. They referred to Blake and Others v Attorney General [1981] ILRM 34. Art. 40.1, they submitted, has no application to the present case. Any discrimination against the plaintiffs was in their capacity as property owners and not in their capacity as human beings. Art. 40.1 was concerned only with discrimination which adversely affected the human personality. They relied on Quinns Supermarket and Others v Attorney General and Others [1972] IR 1 and on Murtagh Properties v Cleary [1972] IR 330.
The plaintiffs’ claim fell therefore to be considered under Art. 40.3, but the rights guaranteed by Art. 40.3 were not unqualified rights. The duty on the State was confined to protecting these rights ‘as best it may’ from unjust attack. They did not deny that anomalies exist in the valuation system. But they suggested that the four plaintiffs had been carefully selected to highlight these anomalies. In general there was a good relationship between poor law valuation and the market value of lands. This was proved by the evidence of Mr Colm McCarthy and accepted by Dr Brendan Walsh on behalf of the plaintiffs.
Art. 40.3 of the Constitution does not provide that the State may not discriminate in its tax laws. The fact of discrimination was commented upon by Lavery J in O’Byrne v Minister for Finance and Another [1959] IR 1 where, referring to income tax, he said:
It is notorious that the burden of this tax falls unequally on incomes. There are numerous classes of income on which no income tax falls. There are numerous classes of income on which the tax is reduced by the method of assessment or by allowances or otherwise or on which tax is not charged at the standard rate. There are numerous classes of persons who are entitled to allowances to which other persons are not entitled. Aware of this, as I imagine everyone is, I was still amazed when I looked into the matter to find the extent of these discriminations. (at 54/55).
In the same case Kingsmill Moore J said:
In Eire the income tax, though it may perhaps be regarded as a general tax can hardly be described with accuracy as being nondiscriminatory … The tax is discriminatory in as far as it is only payable by persons above a certain income level. It is discriminatory in as much as certain bodies, companies, types of business, and charities are relieved from paying it, and a discrimination in favour of a person so relieved is in effect a discrimination against others who have to pay. (at 72).
They also referred to the dictum of Kenny J in Ryan v Attorney General [1965] IR 294 where, having referred to the fact that legislation might be invalidated because it violated rights not specifically mentioned in Art. 40 of the Constitution, he went on to recommend that the courts should exercise caution in relation to this matter. The passage runs:
It is, however, a jurisdiction to be exercised with caution. None of the personal rights of the citizens are unlimited; their exercise may be regulated by the Oireachtas when the common good requires this. When dealing with controversial, social, economic and medical matters on which it is notorious views change from generation to generation, the Oireachtas has to reconcile the exercise of personal rights with the claims of the common good and its decision on the reconciliation should prevail unless it was oppressive to all or some of the citizens or unless there is no reasonable proportion between the benefit which the legislation will confer on the citizens or a substantial body of them and the interference with the personal rights of the citizen. Moreover, the presumption that every act of the Oireachtas is constitutional until the contrary is clearly established applies with particular force to this type of legislation.
The Attorney General also relied upon the concept of what he called ‘horizontal equity’. This arises from the fact that people adapt their business decisions to the tax system. A person buying a capital asset like land will take into consideration, in deciding on the purchase price, its liability to future property taxes. The plaintiff, Michael Brennan, admitted that one of the factors which influenced him in deciding on the purchase price of his farm was the amount of the poor law valuation.
Moreover, in considering this entire matter, the defendant’s counsel submitted that one should bear in mind that rates paid by farmers are allowed as a set off against income tax and that farmers as a class are entitled to allowances not available to other citizens.
CONCLUSION
Before entering into a detailed consideration of these various submissions there are a number of matters I should like to mention. First, I totally accept that this Court should not enter on a consideration of the relative merits of different forms of taxation. In the course of the case some witnesses expressed their opinion as to the relative merits of property taxes and income taxes. These are primarily matters for the legislature and I refrain from discussing them. A fortiori we are not discussing whether farmers should or should not be liable to income tax. The only thing I will say on that subject is this — that the implication of many of the submissions put forward on their behalf in this case is that they should, in accordance with their means, share the burden of financing the institutions of the State equally with other citizens.
Thirdly, I accept the counsel of prudence given by Kenny J in Ryan v Attorney General and relied on by the defendants. Kenny J in the passage quoted, referred to the presumption of constitutionality enjoyed by a post constitutional statute and I accept what he said on that score. Indeed, so far as revenue and fiscal statutes are concerned I would agree that the courts should be extremely slow to interfere whether the statute is a pre-constitutional or post-constitutional one. But I doubt if what we are dealing with in this case are properly referred to as fiscal or revenue matters. We are dealing with problems which are simpler, and, perhaps more important: problems of measurement. The Valuation Acts are concerned with measuring the value of land. A proper system of measuring the value of land may not be as important as systems for measuring weights or volume or distance, but it can be compared to them and is clearly of great importance in the administration of a modern State.
The drafters of the 1852 Act clearly recognised this when they referred to the desirability of having one uniform valuation of lands which might ‘be used for all public and local assessments and other ratings’. It is true of course that if the system of measurement established by the Valuation Act was never used it would be of no relevance. But that system of measurement, like other systems of measurement, was established for the purpose of being used. Nothing has been said against the various statutory schemes referred to in this case except that they are based upon a defective valuation system. These criticisms, if valid, cannot be met by referring to exemptions and ameliorations which are based upon the same defective valuation system.
Again, I accept that in interpreting the Constitution and in considering whether a particular pre-constitutional statute has or has not been carried over by Art. 50 it is permissible to look at the state of affairs as it existed in 1937. This, however cannot be the decisive consideration. A jury system based on a property qualification and optional service by women was well established in 1937. Tax laws which discriminated against married couples were also well established. Both of these however were later ruled unconstitutional.
For reasons which I will explain later I do not think it important, in the circumstances of this case, whether the Valuation Acts do or do not enjoy the presumption of constitutionality. But I do not accept the defendants’ submissions that the mere fact that a post-constitutional Statute purports to amend or adapt a pre-constitutional Statute extends to the pre-constitutional Statute the presumption of constitutionality. The situation which arose in the People (Attorney General) v Conmey [1975] IR 341) was a special one. Walsh J in his judgment in that case referred to the fact that certain pre-constitutional enactments had been expressly re-enacted by s. 48 of the Courts (Supplemental Provisions) Act 1961 and therefore were to be read as post-constitutional Statutes: see p. 362 of the report. Apart from this special case a Statute cannot be presumed to conform to the provisions of a Constitution which was not in existence at the date of its enactment. In particular, a Statute of the Sovereign British Parliament must be read as having the meaning it had on the date of its enactment. In the case of the Valuation Act, 1852 this means its meaning on 30 June 1852. The issue is whether the Statute, bearing the meaning it then had, is or is not consistent with the Constitution of 1937 and was or was not carried forward by Art. 50. See The State (Quinn) v Ryan [1965] IR 70 and The State (Sheerin) v Kennedy [1966] IR 379. If the Statute, as so interpreted, was not carried forward by Art. 50 it is immaterial that the Oireachtas later tried to amend or adapt it because there was nothing for them to amend or adapt.
I do not find the defendant’s argument concerning horizontal equity convincing. No doubt the plaintiff, Michael Brennan, did admit that he would have paid more for his farm had the poor law valuation been lower. But the other plaintiffs inherited their farms, and this is probably the more usual situation in Ireland. Moreover, the evidence of the experts was overwhelmingly to the effect that the amount of the poor law valuation seldom influenced purchasers in purchasing lands. It appears to me that the concept of ‘horizontal equity’ springs from the fact that people adapt themselves to any legal system. It can hardly be used to defend the legal system.
I turn now to consider the two principal constitutional arguments which have been agitated during the debate in this case. The first relates to Art. 40. 1 and the second to Art. 40.3 of the Constitution.
ARTICLE 40.1
Art. 40.1 reads as follows:
All citizens shall, as human persons, be held equal before the law.
This shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function.
The plaintiffs submit that the Valuation Acts are, in their operation, so uncertain, arbitrary and capricious that they discriminate adversely against many citizens of the State including the plaintiffs.
The defendants submit that Art. 40.1 has nothing to do with the present case. They say that any discrimination against the plaintiffs is not against the plaintiffs as human persons but as property holders. Moreover, no one has suggested that there is any intention on the part of the legislature to victimise the plaintiffs. Any discrimination which exists can hardly be invidious discrimination.
The concept of equality before the law is probably the most difficult and elusive concept contained in the Constitution. In The State (Nicolaou) v An Bord Uchtala [1966] IR 567, Walsh J, giving the opinion of the Supreme Court, stated:
In the opinion of the Court s. 1 of Art. 40 is not to be read as a guarantee or undertaking that all citizens shall be treated by the law as equal for all purposes, but rather as an acknowledgement of the human equality of all citizens and that such equality will be recognised in the laws of the State. The section itself in its provisions ‘this shall not be held to mean that the State shall not in its enactments have due regard to differences of capacity, physical and moral, and of social function’ is a recognition that inequality may or must result from some special abilities or from some deficiency or from some special need, and it is clear that the Article does not either envisage or guarantee equal measure in all things to all citizens. To do so regardless of the factors mentioned would be inequality. (at 639)
So, in The State (Hartley) v The Governor of Mountjoy Prison Supreme Court 21 December 1967 the Supreme Court refused to condemn The Extradition Act, 1965 because it set up different systems of extradition depending upon the country to which it was sought to extradite a prisoner. O’Dalaigh CJ, giving the judgment of the Court stated:
A diversity of arrangements does not affect discrimination between citizens and their legal rights. Their legal rights are the same in the same circumstances. This is in fact equality before the law and not inequality, as the appellant submits.
Following these principles the court have stressed that Art. 40 does not require identical treatment of all persons without recognition of differences in relevant circumstances. It only forbids invidious discrimination. See O’Brien v Keogh [1972] IR 144 and Landers v Attorney General (1975) 109 ILTR 1.
There is a sense in which to legislate is to discriminate. The legislature in its efforts to redress the inequalities of life or for other legitimate purposes may have to classify the citizens into adults and children, employers and workers, teachers and pupils and so on. Pringle J stated in O’Brien v Manufacturing Engineering Company Limited [1973] IR 334 that such division of the citizens into different classes was envisaged by the second sentence of Art. 40. 1. He then added:
Therefore it would appear that there is no unfair discrimination provided every person in the same class is treated in the same way. (at 341)
No doubt this is true, but it might be prudent to express, what is perhaps implied in it, that the classification must be for a legitimate legislative purpose, that it must be relevant to that purpose, and that each class must be treated fairly.
The defendants, in support of their submission that any discrimination against the plaintiffs was directed against them in their capacity as property holders, and not in their capacity as human persons, relied strongly on a passage in the judgment of Kenny J in Murtagh Properties Ltd v Cleary [1972] IR 330, where, referring to Art. 40. 1 of the Constitution he said:
This Article is not a guarantee that all citizens shall be treated by the law as equal for all purposes but it means that they shall, as human persons, be held equal before the law. It relates to their essential attributes as persons, those features which make them human beings. It has, in my opinion, nothing to do with their trading activities or with the conditions on which they are employed … (at 334)
Kenny J was here re-echoing a passage from his judgment in the earlier case of Quinns Supermarket v Attorney General [1972] IR 1. The passage, reads as follows:
The plaintiffs argued that the order of 1948 violated the fundamental personal right given by the provisions of Art. 40. 1 that all citizens shall, as human persons, be held equal before the law. This guarantee, however, is one of equality before the law in so far as the characteristics inherent in the idea of human personality are involved: it does not relate to trading activities or to the hours during which persons may carry on business where neither of these is connected with the essentials of the concept of human personality. The qualifying clause in the Article which provides that the State may in its enactments have regard to differences of capacity and social function shows that the Article is not a guarantee of equality before the law in all matters: see the decision of this Court in The State (Nicolaou) v An Bord Uchtala. (at 31)
Walsh J, delivering the judgment of the majority of the Court, put the same point in different words:
The provisions of Art. 40.1, of the Constitution were discussed in the decision of this Court in The State (Nicolaou) v An Bord Uchtala. As was there decided, this provision is not a guarantee of absolute equality for all citizens in all circumstances but is a guarantee of equality as human persons and (as the Irish text of the Constitution makes clear) is a guarantee related to their dignity as human beings and a guarantee against any inequalities grounded upon an assumption, or indeed a belief, that some individual or individuals or classes of individuals, by reason of their human attributes or their ethnic or racial, social or religious background, are to be treated as the inferior or superior of other individuals in the community. This list does not pretend to be complete; but it is merely intended to illustrate the view that this guarantee refers to human persons for what they are in themselves rather than to any lawful activities trades or pursuits which they may engage in or follow.
It appears to me that the words ‘rather than’ in the last sentence of the passage quoted are highly significant. Similarly, Kenny J says that Art. 40. 1 does not relate to trading activities or to the hours during which persons may carry on business ‘where neither of these is connected with the essentials of the concept of human personality’. For Art. 40. 1 is not dealing with human beings in the abstract but with human beings in society. There may be differences and distinctions made between individuals in society in the course of their trading activities or otherwise which are not based upon an assumption that those individuals are superior or inferior to other people. With such distinctions Art. 40. 1 is not normally concerned. But a law can be based upon an assumption that some individuals are inferior to others as human persons and yet manifest itself, in the social or economic sphere, in some superficially trivial regulation, such as who may or may not sit on a park bench; who may or may not own a horse worth more than five pounds; or who or who may not serve drink in a public bar.
Murtagh Properties v Cleary was an application for an interlocutory injunction in which the plaintiffs were successful and the granting of the interlocutory injunction concluded the litigation. But the defendants in that case were members of a trade union whose policy was that only men should be employed as waiters in public houses in Dublin. They had placed a picket on the plaintiffs’ premises pursuant to a trade dispute arising from the fact that they objected to the plaintiffs employing women in their bar. In these circumstances it was possible that, had the case gone to a plenary hearing, the courts would have taken the view that the dispute was not merely a dispute concerning trading activities but raised issues of discrimination on the grounds of sex, and that the plaintiffs were entitled to an injunction, not only on the grounds expressed by Kenny J but on that ground also.
In de Burca v Attorney General [1976] IR 38, Pringle J, in rejecting the submission that the provisions of the Jury Act, 1927, exempting women from compulsory jury service, violated Art. 40. 1, stated:
Finally, I should refer again to Murtagh Properties v Cleary where the plaintiffs’ first contention was that the objection by the union to the employment of bar waitresses was based not on any suggestion that they were unsuitable for the work but solely on the ground that they were female, and that this was a breach of the constitutional right of equality before the law recognised by Art. 40 of the Constitution. In dealing with that contention Kenny J said:
This Article is not a guarantee that all citizens shall be treated by the law as equal for all purposes, but it means that they shall, as human persons be held equal before the law. It relates to their essential attributes as persons, those features which make them human beings. It has, in my opinion nothing to do with their trading activities or with the conditions on which they are employed: see The State (Nicolaou) v An Bord Uchtala; and Quinns Supermarket v Attorney General. (at 334)
Applying the principles laid down in these cases, even if a right to serve as a juror existed I do not consider that it could be said to be a right relating to the essential attributes of women as human persons, but that it should be regarded on the same basis as their trading activities, and so is not within the Article. Furthermore, as women are not absolutely debarred from serving as jurors, in my opinion it cannot be said that there is any invidious discrimination either in favour or against them. (at 50)
Similarly, dealing with a submission that the Jury Act, 1927, by requiring a property qualification for jury service, violated Art. 40. 1, Pringle J stated:
I think the short answer to this contention is that the property qualification does not discriminate between persons as human beings in the same circumstances, and, therefore, does not infringe the provisions of Art. 40.1 relating to equality before the law. (at 51)
On both points the majority in the Supreme Court took a different view. They appear to have been influenced in arriving at their conclusion by the statement in Art. 5 of the Constitution, that Ireland is a ‘democratic’ State, and by the provision of Art. 38.5 that subject to the exceptions therein stated, no person is to be tried on any criminal charge without a jury. The court appears to have taken the view that in a democratic state a person facing a serious criminal charge was entitled to have his case tried by a jury drawn from a random selection of the citizens. But it is significant that the court was dealing not with human rights in the abstract, but with the rights of human beings in society, that is to say with civil and political rights. Nevertheless, the court considered the provisions of Art. 40.1 relevant to the issue. It took the view that a person’s sex, or the question of whether he or she did or did not own a particular kind of property, were not relevant to his or her capacity to act on a jury or to his or her social function as a juror.
It is not clear whether the court took the view that the discrimination effected by the Jury Act, 1927 was ‘invidious’, but it certainly took the view that it was not constitutionally acceptable as not being relevant to the legaislative purpose in hand. It may be that all discrimination between citizens not relevant to a legitimate legislature purpose is invidious.
The discrimination effected by the Jury Act, 1927 was advertant. There can be no doubt that the intention was to exclude from jury service people who had not got the property qualification, and to place women in a special category different from men. The present case is different. Not only was there no intention to victimise the plaintiffs but there was no advertent discrimination against them. Moreover, the legislative purpose in hand being to value citizens’ property for the purpose of property taxes, the nature and amount of such property are highly relevant. Likewise, it seems entirely appropriate and permissible that the legislature should classify landholders by reference to the value of their lands and that it should impose liabilities or confer benefits on this basis.
The plaintiffs’ real complaint is that the unit of measurement employed is so out-dated and inaccurate that it fails to achieve the legitimate purpose which the legislature has in mind. It is so inaccurate and outdated that it cannot make relevant distinctions. As a result people like the plaintiff, Mr Devereux, who ought to be in a lower category find themselves in a higher category, and people like some of the comparison farmers referred to, who ought to be in a higher category, find themselves in a lower category. Equals are treated unequally and unequals equally. This result was not intended by the legislature, but the plaintiffs complain that the result is the same whether intended or not.
The plaintiffs refer to a passage in the judgment of the European Court of Justice in Italy v The European Commission [1963] ECR 165 where the court, dealing with the principle of discrimination, says:
Discrimination in substance would consist in treating either similar situations differently or different situations identically. (at 178)
The plaintiffs can hardly blame the Statute for the fact that their lands are wrongly valued when compared with the lands of other farmers. But it appears to me that they can blame the Statute for denying them an effective means of having their lands revalued. It appears to me that they can legitimately complain that the operation on the Statute is to freeze them in a situation of inequality.
But before taking this matter further I wish to turn to the argument on Art. 40.3 of the Constitution.
ARTICLE 40.3 Art. 40.3 of the Constitution provides as follows:
1. The State guarantees it in law to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2. The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
The personal rights involved in the present case appear to me to be the plaintiffs’ property rights.
Mr Gleeson, in opening the case, based three submissions on Art. 40.3. He said that the valuation system as presently used constituted an unjust attack on property rights. He also claimed that one of the unspecified rights protected by Art. 40 of the Constitution was the taxpayers’ right to a non arbitrary, rational and consistent tax system. He also claimed that the Valuation Acts denied to his client the benefit of the guarantee of fair procedures contained in Art. 40 of the Constitution.
I prefer to treat these submissions as three aspects of the one submission. If the system used for valuing lands for the purpose of property tax is arbitrary and irrational that is an aspect of the attack on, or the failure to respect, the plaintiffs’ property rights. Likewise, had there been a system to review the valuations placed on land, the valuations might not have become out of date; any anomalies in the original valuation might have been corrected, and the system would have been self regulating.
The fundamental duty placed on the State by Art. 40.3 of the Constitution is ‘to respect’ in its laws the personal rights of the citizen. It also is obliged by its laws to defend the personal rights of the citizen and to protect them as best it may from unjust attack. The words ‘defend’ and ‘protect’ seem to refer primarily to the activities of the State in guarding the citizen against the unconstitutional actions of third parties. The State, with the best will in the world, may not always be able to defend or protect the citizen against third parties. That may explain why the obligation to defend is subject to the limitation ‘as far as practicable’, and the obligation to protect is subject to the limitation ‘as best it may’, but the obligation to ‘respect’ appears to be absolute.
Different considerations may arise in relation to the obligation to ‘vindicate’ the personal rights of the citizen. The obligation to vindicate the citizen’s rights in the case of injustice done may arise not only from the wrongful act of third parties but also from the wrongful acts of servants of the State: see Byrne v Ireland [1972] IR 241 The fact that the duty to ‘vindicate’ is subject to the limitation ‘as far as practicable’ may merely reflect the fact that an injustice, by whomsoever committed, cannot always be totally rectified.
This appears to have been the interpretation of the Article adopted by Griffin J in McGee v Attorney General [1974] IR 284, in a passage in which he reinforces his interpretation by reference to the Irish text of the Constitution. The passage reads:
To return to Art. 40.3.1° the guarantee of the State in its laws to respect the personal rights of the citizen is not subject to the limitation ‘as far as practicable’ nor is it circumscribed in any other way. The relevant portion of that sub-section in the Irish version, which prevails, is in the following terms:
ráthaíonn an stát gan cur isteach lena dhlith ar chearta pearsanta aon tsaoranaigh.
The literal translation makes it a guarantee ‘not to interfere with’ rather than a guarantee to ‘respect’. Does a law which affectively prevents the plaintiff and her husband in their particular circumstances from resorting to the use of contraceptives for the purpose of ensuring that the plaintiff will not have another pregnancy ‘respect’ or ‘not interfere with’ the right of family privacy of the plaintiff and her husband? (at 334-)
To say that the obligation on the State to respect the personal rights of the citizen is absolute is not of course to say that those rights are in themselves absolute. I have already referred (at page 477) to the passage from the judgment of Kenny J in Ryan v Attorney General where he stated that none of the personal rights guaranteed to the citizen by the Constitution is unlimited.
The question then arises whether the State, in the Valuation Acts, and in the use it has made of them, has respected the property rights of the plaintiffs.
I am satisfied, on the basis of the evidence, that the Griffith valuation was, in certain particulars at least, defective. These matters might have been put right had there been a proper means of revising the valuations. But there was no means of revising them except by reference to the scale of prices for argicultural products existing between the years 1849 and 1852, and no revision was in fact made.
In the years 1849–’52 the country was still recovering from the Famine. The effects of the repeal of the Corn laws had not yet worked themselves out. In the intervening one hundred and forty years a total revolution has taken place in agricultural practices. The introduction of modern systems of drainage, of mechanisation and the use of lime and artificial fertilisers has made valuable, lands which were previously thought poor. The decline in the rural population and the rise in the level of agricultural wages has made it difficult and expensive to cultivate wet lands previously considered valuable because rich in natural nutrients. This same period has seen the decline of the linen industry, the virtual abandonment of the growing of flax and the introduction of sugar beet as a tillage crop. At the same time, pasture has grown in importance in relation to tillage, and over 90% of the agricultural land of the country is now under pasture.
The system of valuing lands has taken account of none of these factors. Nor has it taken account of social factors which have influenced agricultural production, organisation and markets. The years since 1852 have seen the overthrow of landlordism; the establishment of a system of freehold farmers; the growth of the co-operative movement; the revolution in transport which has made it possible to collect the farmer’s milk at the farm gate, and has thereby reduced the importance of the location of the farm in relation to a creamery or market town. Finally, these years have seen Ireland’s entry into the Common Market, with the revolution in agricultural marketing and prices which that implied.
On the basis of the foregoing, the plaintiffs and their experts have convinced me that the valuations placed on their lands under the Griffith valuation are hopelessly outdated and unreliable as a guide to the present value of their farms. They have also convinced me that there is no way whereby they, as individuals, can have their individual farms revalued. They might be able to force Wexford County Council to apply for a general revaluation of the lands of the county but such a general revaluation, if carried out, would have to be carried out in accordance with the average scale of prices prevailing for agricultural produce in the years 1849 to 1852. Again, while it is not a grievance on which Wexford farmers collectively would appear to be able to rely, there appears to be no method whereby the farmers in a county in which the lands have been overvalued can force a revaluation in a county in which the lands have been undervalued.
Many people would say that matters such as those which arise for discussion in this case pertain primarily to the legislative and administrative sphere of Government, and should be raised, in a court of law, only as a matter of last resort. I agree. But this Court is called upon to consider the valuation system some eighty five years after the Commissioner of Valuation admitted to the Royal Commission on Local Taxation that the system of valuing land in Ireland was so outdated that he could not defend it. No evidence was called to show why the problem was not dealt within the intervening years. Certainly, it was not for want of the problem being identified; and no evidence has been produced to show that, over the time scale in question, there was any impracticality in dealing with the problem, or to challenge Mr Eoghan McCarthy’s opinion that such a re-valuation was practicable.
If the Oireachtas were today to introduce legislation providing for the valuation of the lands of Ireland, such legislation, if enacted, would enjoy the benefit of the presumption of constitutionality. But if such legislation were to provide that the lands of Ireland were to be valued by reference to crops grown, and the scale of agricultural prices obtained, in the years 1849 to 1852, such provision would be so eccentric and ludicrous that the courts would have, I suggest, no difficulty in holding that it failed to respect the property rights of individual farmers. Yet that is the continuing effect of the 1852 Act and of amending legislation.
In all the circumstances it appears to me that these Acts, and the property valuations made thereunder of the plaintiffs’ lands, are not consistent with the Constitution in that they do not respect the plaintiffs’ property rights or respect the plaintiffs’ right to equality before the law in relation to their property rights. For the same reasons I do not consider that they were consistent with the Constitution in 1938 or carried forward by Art. 50.
I will give counsel an opportunity to consider the form my Order should take.
THE COURT ORDERED:
(1) that ss. 11 and 34 of the Valuation (Ireland) Act 1852 to the extent that they provide for the valuation of land in the manner prescribed are inconsistent with the provisions of the Constitution;
(2) that the rateable valuations of the plaintiffs lands as made pursuant to s. 11 of the Valuation (Ireland) Act 1852 are inconsistent with the provisions of the Constitution and invalid and inequitable as a basis for the assessment and levying of any County rate by the second-named defendant;
(3) that the assessment charging or recovery from the plaintiffs of any of the taxes charges contributions or payments required to be levied or paid pursuant to the provisions set forth in the Table hereunder is inconsistent with the provisions of the Constitution so long as and to the extent that the same are assessed or charged by reference to the valuation of lands made under the provisions of the Valuation (Ireland) Act 1852–1974.
TABLE
Income Tax Act 1967 part IV as applied to farm land by ss. 13–28 of the Finance Act 1974.
Finance Act 1980 ss. 30–36.
Health Contributions Act 1979 and the Health Contributions Regulations 1979 as amended by the Health Contributions (Amendment) Regulations 1980;
(4) that the provisions of the Rates on Agricultural land (Relief) Act 1939 to 1980 and the Housing Act 1966 s. 16 are invalid having regard to the provisions of the Constitution to the extent that they are given effect and application by reference to the amount of the valuation of lands made pursuant to the provisions of the Valuation (Ireland) Act 1852–1874;
(5) that carrying into effect the provisions of the Local Authorities (Higher Education Grants) Act 1968 to 1978 by means of a scheme approved under s. 5 of the said Act of 1968 is inconsistent with the provisions of the Constitution to the extent that such scheme determines eligibility for grants thereunder by reference to the Valuation of Lands made pursuant to the provisions of the Valuation (Ireland) Act 1852–1874.
Chestvale Properties Ltd and Hoddle Investments Ltd v Glackin
[1992] ILRM 221
Murphy J
The Companies Act 1990, s. 14 empowers the Minister for Industry and Commerce in certain circumstances to appoint one or more competent inspectors to investigate and report on the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company.
S. 14 aforesaid came into operation on 1 July 1991 by virtue of S.I. No. 117 of 1991.
On 14 September 1991 the Minister for Tourism, Transport and Communications established a formal inquiry into transactions leading up to the acquisition by Telecom Eireann on 19 June 1990 of certain lands — known as the Johnston Mooney and O’Brien site — at Ballsbridge in the City of Dublin.
By warrant dated 9 October 1991 the Minister for Industry and Commerce having recited that he was of opinion that there were circumstances suggesting that it was necessary in the public interest so to do appointed John A. Glackin as inspector to investigate and report on:
The membership of Chestvale Properties Ltd and Hoddle Investments Ltd and otherwise with respect to these companies for the purposes of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of these companies or able to control or materially to influence the policy of these companies.
By letter dated 10 October 1991 the inspector wrote to Noel P. Smyth of Noel Smyth and Partners, solicitors, a letter entitled ‘Chestvale Properties Ltd. Hoddle Investments Ltd (‘the companies) and after reciting his appointment as inspector and referring to the warrant enclosed therewith went on to say as follows:
It has come to my attention that you are a person, within the meaning of s. 10(1) of the Companies Act 1990 who may have now or in the past had in your possession books and documents of or relating to the companies and I should be obliged if you would produce these to me in the immediate future. I look forward to hearing from you within the next 24 hours.
By letter dated 14 October 1991 addressed to Gabriel J. Moloney, managing director and chief executive of Ansbacher Bankers Ltd, and headed and introduced as in the letter to Mr Smyth the inspector informed Mr Moloney as follows:
It has come to my attention that Ansbacher Bankers Ltd were bankers to Chestvale Properties Ltd, Hoddle Investments and a related company Delion Investment Dealings Ltd. Accordingly you will have in your possession books and documents relating to the companies and to the related company referred to above and I should be obliged if you would produce these to me before 5 pm on Tuesday 15 October 1991. In particular I would require to see all relevant bank statements, copy bank drafts and cheques, loan applications with supporting documentation, security documents including guarantees and indemnities and copies of all relevant correspondence.
In an affidavit sworn on 20 October 1991 Mr Smyth set out the problems which he had in complying with the demand made by the inspector as aforesaid. In essence the problems with which Mr Smyth was presented were first that he believed that full compliance with the demand would involve an infringement of his client’s legal privilege and secondly that the legislation did not and could not authorise the production of documents which came into existence prior to the commencement of the relevant sections of the 1990 Act. Mr Smyth did not seek to escape or avoid in any way the duty whatever it might be which was imposed upon him by the statute and his attitude in this regard is summarized in the penultimate paragraph of his affidavit in the following terms:
I have at all stages indicated to our clients, to the tribunal, to the inspector, to the Incorporated Law Society, and to all others directly concerned, that I intend to and shall abide by any order that this Honourable Court may make with regard to disclosure and shall fully comply with any other terms if so required by this Honourable Court.
The attitude of Ansbacher Bankers Ltd is likewise dealt with fully in the affidavit of Eamonn Mullan sworn on 21 October 1991. Mr Mullan makes clear that the bank acting on the advice of their solicitors and counsel took the view that they would properly disclose to the inspector the books and records in their possession in relation to Chestvale Properties Ltd but in relation to Delion Investment Dealings Ltd that a very real doubt existed as to the rights of the inspector to the documents sought by him. In relation to the latter documents the bank sought to resolve the problem in discussion with Mr Glackin and with their clients. These discussions were overtaken by the litigation herein. On 16 October 1991, the inspector instituted proceedings against the bank and the solicitor for an order directing the defendants to deliver up to him the documents which he had demanded as aforesaid and on the same day the inspector applied ex parte for and was granted an order directing the defendants to preserve within the jurisdiction all of the books and records aforesaid. On the same day and in another court Chestvale and Hoddle applied ex parte and were granted leave to apply for declarations and orders of prohibition by way of an application for judicial review in respect of the jurisdiction conferred by the warrant of appointment granted by the minister to the inspector pursuant to s. 14 of the Companies Act 1990. Whilst the application by the applicant companies for an order staying the inspector’s investigations was refused, the learned judge was quoted in a letter from the solicitors for the applicants to the solicitors on behalf of the bank as saying that:
If your client (the bank) now complies with the demands and it is subsequently deemed that your client (the bank) was not obliged to do so then our clients (the applicant companies) would have an appropriate remedy
It was in those circumstances that the bank made it clear to the inspector that they are happy to abide by whatever decision the court might make in the matter.
Whatever other problems arise the attitude adopted by the solicitors and by the bankers was entirely proper both in relation to their clients and to the inspector and cannot be faulted in any way.
The grounds on which the applicant companies seek judicial review may be summarised as follows:
1. (a) That Part II of the Companies Act 1990 and in particular ss. 10 and 14 thereof do not operate with retrospective effect so as to authorize an inspector appointed by the minister to compel production of documents which came into existence prior to the commencement of the Act or the relevant sections thereof.
(b) If the Act should be construed as operating with retrospective effect then to that extent it is unconstitutional.
2. That the inspector is disqualified from acting in that capacity because he could not or would not be seen to be impartial having regard to the fact that his firm acted as solicitors for Patrick Doherty who claims to be the beneficial owner of the issued share capital in the applicant companies.
3. That the demand made of the solicitors and the bankers for documents in their possession insofar as they relate to Delion Investment Dealings Ltd is invalid as the inspector was not appointed to investigate or report on the membership of that company nor is that company a related company within the meaning of s. 9 of the 1990 Act as adapted by s. 14(5) thereof. Furthermore it is contended that the demand for documents as a whole is a single demand and that if it is invalid as to part thereof it is necessarily invalid in whole.
4. That the demand for documents was so wide in its terms and so oppressive in the time limits that it set that it constituted an unreasonable and invalid exercise of the statutory powers which the statute purported to confer on the inspector.
The argument on retrospectivity
Legislation is said to operate retrospectively where it ‘takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect to transactions or considerations already past. This definition has been accepted and applied by the Supreme Court in Hamilton v Hamilton [1982] IR 471, 474.
At common law there was a presumption, a strong presumption, that a statute is intended by parliament to operate prospectively and not retrospectively. This presumption is based on the proposition that ordinarily the retrospective operation of a statute would cause injustice and that parliament could not be presumed to have intended such a consequence.
Whilst Part II of the Companies Act 1990 is seen as constituting a significant reformation of company law and does undoubtedly create new powers and 28 impose new duties the basic concept of appointing competent inspectors to investigate the affairs of a company is of venerable origin, The power of the Board of Trade, as it then was, to appoint one or more competent inspectors to investigate the affairs of any company and report thereon in such manner as the board should direct is to be found in s. 56 of the Companies Act 1862. Whilst the power does not appear to have been invoked with any great frequency it was continued in the Companies (Consolidation) Act 1908 (ss. 109 to 111) and in a more extended form in the Companies Act 1963, ss. 165 to 173 inclusive. Part II of the 1990 Act differs from its predecessors in that it confers the power to appoint inspectors to investigate ‘the affairs of a company on the High Court instead of the minister and it confers the new and distinct power on the minister in certain circumstances to appoint an inspector or inspectors to investigate and report on ‘the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company. In addition, the powers conferred upon any inspector appointed under the Companies Act 1990 are more extensive in certain respects than those conferred on inspectors by earlier legislation. The statutory effect of the inspector’s report has been extended by the 1990 Act. The report is now admissible in civil proceedings (by virtue of s. 22 of the 1990 Act) not merely as evidence of the opinion of the inspector but also of the facts set out in the report.
Of course Part II of the 1990 Act is clearly and exclusively prospective in the sense that inspectors can be appointed thereunder only after the relevant provisions of that part came into operation. The issue between the parties to the present proceedings is whether an inspector thus appointed could exercise the powers apparently vested in him under the 1990 Act so as to procure documents or obtain information relating to events which pre-dated the coming into operation of the Act. Whilst the Act does not state in express terms whether it should operate in that way I have no doubt at all that this was indeed the intention of the legislature. In this regard the most significant fact is the repeal by s. 6 of the Companies Act 1990 of all of the provisions of the Companies Act 1963 dealing with the appointment of inspectors. If the former powers of investigation were no longer available to an inspector appointed under the 1990 Act how could he possibly discharge the obligations imposed upon him to investigate and report on any of the matters referred to in Part II of the 1990 Act unless the code created by Part II thereof was intended to be available to him to enable him to explore matters which are of their nature historic in their origins and which would entail, at least in the years immediately following the enactment of the 1990 Act, a review of facts and documents pre-dating the coming into operation of the Act. It does seem to me that in this way and to this extent pre-1990 transactions are exposed to the post-1990 regime.
29
The question then is whether legislation having this effect is unconstitutional. The plaintiffs did not and could not contend that Part II of the 1990 Act offended Article 15.5 of the Constitution. In no sense does that part of the 1990 Act declare any act to be an infringement of the law which was not so at the date of its commission. What the plaintiffs say is that by enacting Part II aforesaid the Oireachtas contravened Article 40.3 of the Constitution in that it failed to protect and vindicate the property rights thereby guaranteed.
As the rights guaranteed by that sub-article are the personal and property rights of citizens the respondent and the Attorney General contended that an argument based on this sub-article was not available to the corporate applicants. This objection is supported by the decision of Carroll J in PMPS and Moore v Attorney General [1983] IR 339. Ordinarily when this problem arises it is overcome by joining as a plaintiff a shareholder of the corporate plaintiff who is an Irish citizen (as was done in the PMPS case). This solution was consciously rejected by counsel on behalf of the applicants in the present case.
Whilst I accept that the court should be astute to protect the rights of citizens even when they are attacked only indirectly through particular corporate structures it does seem to me that in the particular circumstances of this case the absence of an individual Irish citizen asserting his own constitutional rights is fatal to the argument based on the constitutionality of the 1990 legislation. However as the matter was argued in full before me it is proper that I should express a view on it.
I accept that the applicants are correct in saying that the legislation does impinge to some extent on their property rights insofar as the same consist of mutual contractual obligations between themselves and their bankers and solicitors respectively. The applicants say that at the date on which Ansbacher contracted to act as their bankers it was an implied term of that contract that Ansbacher would not disclose any information concerning the plaintiffs’ accounts or affairs except on reasonable and proper occasion as when answering enquiries by a proposing guarantor or under compulsion of law. The applicants say that the circumstances under which a banker or a solicitor might be compelled by law to disclose the affairs of his customer were significantly extended by the 1990 Act and in that way the rights for which the customer had contracted with his bankers or solicitors had been eroded retrospectively. This is a very fine argument indeed.
It is common case that the customary and contractual right of a client to confidentiality from his banker or solicitor is and always has been subject to a very wide range of exceptions. Obviously the contractual bargain between the professional advisers and the applicants was subject to the statutory right of an inspector appointed under the Companies (Consolidation) Act 1908 or the Companies Act 1963 to obtain in a proper case information and documents relating to the affairs of the client. Again it is common case that (subject to any 30 question of privilege) the documents which are now sought by the inspector from the bankers would be required to be included in an affidavit of discovery to be made by the bank or the applicants themselves in any proceedings in which such documents might be material to the matters in issue therein.
The gravamen of the applicants’ complaint is that their property rights were unjustly attacked by the fact that the 1990 Act extends to inspectors appointed for the purpose of investigating the membership of any company the rights previously conferred only on inspectors appointed to investigate ‘the affairs of a company and, it is said, conferring greater powers on both categories of inspectorate and greater legal effect on the report issued by either form of inspector. This is a marginal erosion of or interference with incorporeal property rights. This intrusion such as it is must be seen and evaluated against the duty of a minister of government identifying and satisfying himself as to the existence of a public interest to have an inspector appointed to investigate and report on the membership of a particular company. It could not be doubted that there are occasions on which it is in the public interest to penetrate a pyramid of subsidiary or related companies and/or shareholdings by trustees or nominees so as to establish as s. 14 envisages ‘the true persons who are or have been financially interested in the success or failure of a company.
I am satisfied that this limited intrusion on the contractual rights of the applicants could not be seen as an unjust attack on the applicants’ property rights or a failure to vindicate them as far as practicable. The minimal interference is fully justifiable as a means of reconciling the exercise of property rights with the exigencies of the common good as provided by Article 43.2.1° of Bunreacht na hÉireann.
It is my view, therefore, that notwithstanding the presumption against retrospectivity in all legislation enacted by the Oireachtas, Part II of the Companies Act 1990 operates retrospectively to the extent that any inspector appointed by the minister under s. 14 of that Act is entitled to compel the production of documents from persons having the custody thereof notwithstanding the fact that the contract under which such custody was obtained was made before the relevant sections of the legislation came into operation and this is so whether the person having such custody is a bank or a solicitor though subject in the case of a solicitor to the preservation by s. 23 of the Act to the full legal professional privilege of the client.
Furthermore I am satisfied for the reasons given that the operation of the sections in that way does not constitute an impermissible or unjust attack on the property rights of the applicants or either of them or indeed any citizen directly or indirectly holding shares therein.
Bias
On behalf of the plaintiffs it was contended that Mr Glackin was disqualified 31 on the grounds of bias from fulfilling the role of inspector in the particular circumstances of the present case.
As I pointed out in Dublin and County Broadcasting Ltd v Independent Radio and Television Commission (12 May 1989) there are two types of bias, one based on pecuniary interest and the other described as ‘a challenge to the favour being a bias deriving from a special relationship or kindred causes. Subsequent to the judgment in the Dublin and County Broadcasting case the nature of the bias which may invalidate the exercise of a quasi-judicial power was further considered in a number of cases but in particular by the Supreme Court in O’Neill v Beaumont Hospital Board [1990] ILRM 419. The particular category or sub-category of bias under consideration by the Supreme Court was that consisting of ‘pre-judgment but it seems to me that the test propounded by the Chief Justice would be equally applicable in relation to any form of bias based upon a relationship between the parties concerned. The Chief Justice propounded the test at p. 438–439 in the following terms:
… I am satisfied that the proper standard to be applied by this Court … is the question as to whether a person in the position of the plaintiff, Mr O’Neill, in this case who was a reasonable man, should apprehend that his chance of a fair and independent hearing of the question as to whether his services should be continued or terminated does not exist by reason of the pre-judgment of the issues which are involved in that by the members of the board … the test is an objective test as to whether a person in the position of the plaintiff who is a reasonable man might reasonably fear that the pre-judgment expressed by the chairman would prevent a completely fair and independent hearing of the issues which arise.
The facts on which the applicants rely to establish a case of bias are set out in the affidavits of Mr Patrick Doherty and also in a letter from his solicitors to the Minister for Industry and Commerce dated 24 October 1991. Mr Glackin dealt with these allegations in a letter dated 25 October 1991 addressed to the Minister for Industry and Commerce commenting upon the allegations by reference to the letter of complaint to the minister dated the previous day. There are some areas of dispute between Mr Doherty and Mr Glackin but the general thrust of Mr Glackin’s letter to the minister was to put in context (as Mr Glackin would see it) the relationship between Messrs Gerrard Scallan and O’Brien, Mr Glackin’s firm, on the one hand and Mr Doherty and his partner or associated companies on the other. I do not think it is necessary to analyse the areas of difference. I believe that the relationship can be summarised by saying that a partner of Mr Doherty (a Mr Bob Langdon) and/or a company or companies in which Mr Doherty was interested financially or as a director sought and obtained professional advice or services from Messrs Gerrard Scallan and O’Brien 32 sometime about October 1981. The transaction does not appear to have been a very substantial one and I doubt that the particular services rendered would have been a matter of any significant consequence to the professional partnership or given rise to any significant discussion between the partners themselves. Mr Doherty was not himself the client nor was Mr Glackin the partner who dealt with any aspect of the case. However, that being said the position remains that Mr Glackin’s firm did (and to a limited extent still does) provide certain services of a professional nature for a company (though not either of the plaintiffs) in which Mr Doherty is undoubtedly involved. In short a neutral observer knowing the relevant facts might say that Mr Doherty or ‘his company was and is a client of Messrs Gerrard Scallan and O’Brien.
Summarising the relationship between the parties in that simple way it seems to me that Mr Glackin would be necessarily disqualified from exercising a quasi-judicial function in any matter in which Mr Doherty was involved. If Mr Glackin had been appointed as arbitrator in a dispute involving Mr Doherty surely ‘a right minded person viewing the arbitration from the point of view of the other party to the issue would believe that there was ‘a real likelihood of bias. The fact that Mr Glackin or other lawyers similarly placed might have acted with complete integrity and independence is irrelevant. The reasonable suspicion of bias would invalidate the purported exercise of a judicial function (see O’Donoghue v Veterinary Council [1975] IR 398.)
The question then is whether the task imposed on an inspector appointed pursuant to s. 14 of the 1990 Act involves the exercise of a function of a judicial nature.
The standards to be applied by a person or tribunal carrying out investigative duties and reporting thereon has been considered in a wide variety and large number of cases. The decision In re Pergamon Press Ltd [1971] Ch 388 is helpful in as much as the Court of Appeal in England were there dealing with the nature of the duties imposed upon an inspector appointed under s. 165 of the UK Companies Act 1948 (as amended by the Companies Act 1967 s. 38) which is similar though not identical to the comparable Irish legislation. In State (Shannon Atlantic Fisheries Ltd) v Minister for Transport and Power and McPolin [1976] IR 93 the then President of the High Court considered the nature of the functions exercised by an inspector appointed under s. 465 of the Merchant Shipping Act 1894 in reporting to the minister on an inquiry held by him into the wrecking of the prosecutor’s fishing vessel. The nature of proceedings before the Committee of Public Accounts of Dáil Éireann and the duties owed by that committee to persons whose conduct was impugned by evidence received by the committee was analysed by the Supreme Court in In re Haughey [1971] IR 217.
I think it would be correct to say that in every one of those cases the court concluded that the investigating authority was bound to exercise an appropriate 33 measure of natural justice. On the other hand it is I believe equally clear that the findings in that regard were directed and relevant only to certain issues within the various investigations and were not intended to be applied and could not in fact be applied to each and every inquiry or communication emanating from the investigating authority. In the Shannon Atlantic Fisheries case the second-named defendant in the course of his investigation interviewed all the members of the crew of the vessel which had been damaged and without affording the owners of the vessel an opportunity of being heard prepared a report of his preliminary inquiry to the minister expressing the view that the owners had been guilty of criminal offences in permitting the vessel to sail. Notwithstanding the fact that it was a preliminary inquiry and that the final decision rested with the minister, Finlay P concluded that the inspector was exercising a quasi-judicial role and described his position (at p. 98 of the report) as follows:
Therefore, it seems to me that, both in theory and in practice, in making the report itself the investigating officer was necessarily reaching a decision and, in a sense, was entering a verdict in precisely the same way as a jury is asked to reach a decision and to enter a verdict on facts.
In In re Haughey the examination and investigation conducted by the Committee of Public Accounts reached the stage as the Chief Justice held (at p. 263) that:
Mr Haughey is more than a mere witness. The true analogy, in terms of High Court procedure, is not that of a witness but of a party. Mr Haughey’s conduct is the very subject matter of the committee’s examination and is to be the subject matter of the committee’s report.
Ó Dálaigh CJ then went on in his judgment to advert to the provisions of the Constitution which guaranteed to the citizens basic fairness in the procedures or inquiries so as to enable a party to defend his good name.
In the Pergamon Press case Sachs LJ whilst reluctant to engage in labelling any particular proceedings as ‘judicial, ‘quasi-judicial, ‘administrative or ‘investigatory described the task of an inspector appointed under the UK Companies Act (at p. 403) as follows:
Accordingly, it is convenient to say just a brief word as to how inspectors appointed under s. 165 in general have set about their tasks. This has already been touched upon by Lord Denning MR, and he has emphasised, as I would emphasise, that for this purpose, starting very often with a blank sheet of knowledge, they have to call for information in whatever way it can best be obtained. That may be by interviews, it may be from statements obtained in writing, it may be from accounts and other documents, or it may be by their 34 exercising their powers under s. 167(3) to put questions to individuals, either on oath or not on oath.
One way or another it may be a considerable time before the inspectors have before them sufficient information to see any pattern in the affairs of a company. Even when this pattern commences to take shape, they may need further material before the possibility emerges of any criticism attaching to individuals. Moreover, that possibility may derive from documentary evidence which is in substance uncontested, or it may derive from a matter on which there may be a conflict of evidence between some witness and the person to whom blame may be attributed. In the latter case there may come the stage when the inspectors have to decide whether simply to record that conflict or whether to seek to resolve it. The more complex the affairs of the company and the greater the number of subsidiary companies, the longer it may take before those respective stages are reached.
The evolving aspect of an inspector’s statutory duties was adverted to by Buckley LJ also in the Pergamon Press case at p. 407 as follows:
Until an inspector has reached a stage at which he thinks that he will, or, at least, may have to report adversely on a director or officer, it will be premature for him to decide what, if anything, he should do to give the director or officer a fair chance of explaining the matter.
The present proceedings were instituted when the inquiry had reached only a very preliminary and exploratory stage. It was in the course of these proceedings that an affidavit was sworn by Mr Patrick Doherty in which he claimed to be directly or indirectly the beneficial owner of the shares in question. If this assertion accords with the other material and documentary evidence obtained by the inspector in the course of his inquiries and if no other person contests the claim made by Mr Doherty there will be no conflict to be resolved by proceedings analogous to a judicial hearing. In these circumstances it must be presumed that Mr Glackin (unlike Inspector McPolin in the Shannon Atlantic Fisheries case) will not have to ‘enter a verdict on any issue between claimants to the shares in question.
Even if the presumption were otherwise and that one should anticipate a stage being reached at which Mr Glackin would find it necessary to make a choice as between conflicting claims it is clear that that stage has not yet been reached. Accordingly the present application is premature insofar as it is based upon the contention that the inspector is engaged in a task which presently involves him in a quasi-judicial function.
The respondents also contend that the applicant companies have no locus standi to challenge the impartiality of the inspector vis-à-vis Mr Doherty. In my view this point too is well founded. The case based on bias is constructed solely 35 by reference to the injustice which Mr Doherty foresees which he would suffer if and when Mr Glackin is called upon to adjudicate on a contentious issue between him and some other party as yet unidentified. Whilst I have accepted that circumstances could exist in which bias would be perceived it is only the parties whose rights would be affected by the adverse decision who could challenge the procedure in which it was reached.
In any investigation by an inspector appointed by the court or by the minister under Part II of the Companies Act 1990 and indeed in the very nature of any investigation seeking to establish a truth as yet unknown it would be impossible to guarantee that the person appointed as inspector or some of his associates or advisers would not have some association or connection with some person or company who, it transpires, is interested in the subject matter of the inquiry. Presumably it could occur that the association or connection would be so direct or so close that an inspector could not continue with the inquiry and would feel compelled to resign. However, whatever problems may arise if and when the investigation evolves into a quasi-judicial inquiry by Mr Glackin of any issue to which Mr Doherty is a party or however those problems may be resolved it does not seem to me that the tenuous relationship which did exist or does exist between Mr Doherty or his associates and Messrs Gerrard Scallan and O’Brien calls in question in any way the validity of Mr Glackin’s appointment as inspector under the Companies Act 1990.
Delion Investment Dealings Ltd
In his letter dated 14 October 1991 to Ansbachers the inspector sought production of all books and documents in the possession of the addressee relating to Chestvale Properties Ltd, Hoddle Investments Ltd and what is described in that letter as ‘a related company Delion Investment Dealings Ltd.
It might be inferred that by referring to a ‘related company the inspector was impliedly referring to or invoking the provisions of s. 9 of the Companies Act 1990 as applied by s. 14(5) thereof to inspectors appointed by the minister. In fact such an inference would be mistaken. S. 9 provides as follows:
If an inspector appointed under s. 7 or 8 to investigate the affairs of a company thinks it necessary for the purposes of his investigation to investigate also the affairs of any other body corporate which is related to such company, he shall, with the approval of the court, have power so to do, and shall report on the affairs of the other body corporate so far as he thinks the results of his investigation thereof are relevant to the investigation of the affairs of the first-mentioned company.
S. 14(5) of the 1990 Act applies s. 9 and other provisions to ministerial inspections in the following terms: 36
(5) For the purposes of any investigation under this section, ss. 9 to 11, except s. 10(3), shall apply with the necessary modifications of references to the affairs of the company or to those of any other body corporate, so, however that—
(a) the said sections shall apply in relation to all persons who are or have been, or whom the inspector has reasonable cause to believe to be or have been, financially interested in the success or failure or the apparent success or failure of the company or any other body corporate whose membership is investigated with that of the company, or able to control or materially to influence the policy thereof, including persons concerned only on behalf of others and to any other person whom the inspector has reasonable cause to believe possesses information relevant to the investigation, as they apply in relation to officers and agents of the company or of the body corporate, as the case may be;
(b) …
(c) for references to the court (except in ss. 10(5) and (6)), there shall be substituted references to the minister.
Even if it were accepted that Delion is a related company of Chestvale Properties Ltd or Hoddle Investments Ltd (and it is not) it is clear that the minister did not at any time grant an approval in accordance with s. 9 of the Companies Act 1990 as applied by s. 14(5)(c) thereof.
In those circumstances it seems clear that the demand by the inspector for books and records in the possession of the bankers relating to Delion was not authorized by the Act.
On the other hand the fact that particular books and documents may be properly identified as being the property of or relating to one company does not necessarily preclude them from relating also to another company.
Whilst it seems to me that the point taken by the applicants and more particularly by the bankers in relation to the express reference to Delion is well founded the extension of the demand to the related company does not invalidate the demand less still does it impugn in any way the validity of the appointment of the inspector nor would it excuse the addressee from producing documents relating to Delion if they also related to either Chestvale Properties Ltd or Hoddle Investments Ltd.
The form of the demand
The applicants contended that the demand made by the inspector for books and documents was expressed in such general terms and imposed such time limits as to amount to an abuse of the inspector’s statutory powers and as such were invalid. It seems to me unnecessary to examine the facts relied upon by the applicants in support of this argument. Whatever argument might be constructed on the basis of any such analysis the reality is that both the bankers and the 37 solicitors were able to comply with the demand and within the time limits prescribed by the inspector. Neither the bankers nor the solicitors raised any objection based upon administrative difficulties. Their only concern was to ensure that in performing the obligations which appeared to be imposed upon them by statute that they did not neglect the duty which they had to their clients or former clients as the case may be.
In the circumstances it seems to me that there is no substance in this particular ground.
Furthermore it would be difficult to sustain a challenge to the validity of the exercise of a statutory power which follows so closely the terms of the section by which it was conferred.
In these circumstances it seems to me that the cause shown should be allowed.
Hempenstall and Ors v Minister for the Environment [1993] ILRM 318
Costello J
Introduction
This is an application brought by six licensed taxi owners challenging part of a regulation made under the Road Traffic Act by the Minister for the Environment on 1 July 1992. In October 1991 the minister had by regulation prohibited the issue of new licences under the Road Traffic Acts to hackney owners. The impugned article of the 1992 Regulations repeals that prohibition. The challenge is brought on two separate grounds:
(a) That the repealing provision infringes the applicants’ constitutionally protected property rights, and
(b) that, being contrary to a verbal assurance given by the minister to one of the applicants and repeated by him to others, the minister is, by making the regulation, acting contrary to the legitimate expectations of the applicants and is thereby estopped from making it.
It will help an understanding of the issues in the case if before examining the applicant’s case I refer briefly to the relevant statutory regulations.
The regulations
S. 3 of the Road Traffic Act 1961 defines a ‘large public service vehicle as a public service vehicle having seating passenger accommodation for more than eight persons exclusive of the driver and defines a ‘small public service vehicle as a public service vehicle which is not a large public service vehicle. In 1963 (by SI No. 191 of 1963) small public service vehicles were divided into two classes, ‘licensed public hire vehicles, known colloquially as taxis and ‘licensed private hire vehicles known as hackneys. Under these regulations and amending regulations two different legal regimes were created for taxis and hackneys. Taxis may ply for hire in a public place or stand at an appointed taxi rank; their hiring may be initiated or facilitated by means of telephone or radio contact whilst the vehicle is in a public place; they are subject to fare controls and fares 21 must be calculated by reference to a taxi meter; they must display a roof sign which shows the words ‘taxi, and the licence number. Hackney cabs are not assigned specific functions in the regulations. They are, however, prohibited from exercising certain roles. Private hire operators are not subject to any geographical restriction and are not subject to fare control or obliged to use meters. Both classes of vehicle had to be licensed but under the 1963 Regulations no restrictions were placed on the number of either hackney or taxi licences which could be granted in any area.
In 1978 an important amendment was made in the regulations. By the Road Traffic (Public Service Vehicles) (Licensing) Regulations 1978 (SI No. 292 of 1978) taxi licences could only be granted in ‘a taximeter area (as defined) where the local authority for that area made a determination that a specific number of such licences were to be made available on an annual basis. But these regulations did not impose any restrictions on the availability of hackney licences. Most importantly, the regulations permitted the transfer of taxi licences, and following the regulations a thriving market in the sale of licences developed.
On 16 May 1991 the minister announced the establishment of an interdepartmental committee to carry out an examination of the law governing the operation of small public service vehicles. In October 1991 the committee submitted some interim recommendations, one of which was that a temporary moratorium on the issue of new hackney licences should be imposed to maintain the status quo pending the completion of the committee’s review. Pursuant to this recommendation, the minister on 24 October 1991 made the Road Traffic (Public Service Vehicles) (Amendment) Regulations 1991 (SI No. 272 of 1991). Article 12 of these regulations prohibited the granting of new small public service vehicle licences other than in respect of pending applications. It is the repeal of article 12 by the impugned 1992 Regulations that forms the gravamen of the applicants’ complaint in these proceedings. For 30 years no restriction had been placed on the numbers of hackney licences to be issued. The 1991 Regulations imposed a temporary restriction. The applicants’ claim is that the minister cannot validly lift that restriction.
The committee’s final report was presented to the minister on 6 May 1992. One of the recommendations in the report was to the effect
that the temporary moratorium which was introduced in October 1991 on the issue of new licences, so as to stabilise the market pending the completion of the review, should now be removed to again allow unrestricted entry to this sector of the market.
On 1 July 1992 the minister published the report and also made the Road Traffic (Public Service Vehicles) (Amendment) (No. 2) Regulations 1992 (SI No. 172 of 1992). This repealed article 12 of the 1991 Regulations and removed the moratorium on the granting of new hackney licences.
22
There is one other regulation to which reference must be made as it constitutes a critical part of the applicants’ case. I have pointed out that taxis may obtain fares by means of telephone or radio communications and it is agreed that for many licence holders this method of obtaining customers is an important source of their livelihood. In 1983 a significant restriction was placed on hackney hirings by the Road Traffic (Public Service Vehicles) (Amendment) Regulations 1983 (SI No. 273 of 1983). These provided that hackney (as distinct from taxi) hirings within a taximeter area, other than in connection with the funeral of a deceased person, could not be initiated or facilitated by means of telephone or radio communications with the vehicle while it is in a public place. The applicants urge that (a) this regulation is unenforceable or, alternatively (b) that it has not been adequately enforced and that as a result (c) hackney cabs can, and in practice do, operate in taximeter areas in breach of the law by accepting hirings by radio in public places. As a result, it is said, hackney owners are able to compete unfairly against taxi owners in those areas as they are not subject to any of the restrictions imposed by law on taxi owners.
The issues
(a) TheConstitution
The applicants firstly submit that the taxi licences which have been granted to them are a form of property right and that this property right is constitutionally protected; secondly, that it is a valuable right; thirdly, that these rights have been unjustly attacked by the minister’s actions which have resulted in a very considerable diminution in the value of their rights. The minister does not deny that the applicants’ licences are property rights and valuable rights, which are constitutionally protected; he says that they have not been unjustly attacked by the impugned regulation.
The applicants’ case, in greater detail, is this. They say that the effect of the impugned regulation is that there will now be unrestricted licensing of hackney cabs in their taximeter area. They claim that this will have ‘an immediate and devastating effect on their taxicab licences, that the effect will be ‘effectively to decimate the value of a taxicab license because for all intents and purposes the manner in which hackney cabs have been allowed to operate by the authorities has put them on a par with taxicabs save that they do not stand at taxi ranks. They say that the value current in July 1992 of a taxi licence was approximately £44,000 and that on implementation of the regulation the effect of unrestricted competition from hackney cabs would be to reduce this value to £3,000. Their claim is that the competition from hackney cabs would dilute the trade which supports taxicabs to such an extent as to make the operation of taxicabs uneconomical. It is claimed that the minister must have been aware that no proper controls were imposed on hackney cabs to ensure that they operate in 23 accordance with law, and in particular in accordance with the 1983 Regulation relating to radio communication, and that he is introducing licensing arrangements which will enable persons to be licensed whom he knows will break the existing laws. They claim that the regulation, therefore, constitutes an unjust attack by law on their property rights guaranteed by Article 40.3 and Article 43 of the Constitution. In support of their contention they say the applicant Thomas Hempenstall purchased his ‘taxi plate for £38,000, the applicant Patrick Hempenstall paid £38,000 for a licence plate, the applicant Nicholas Lewis paid a similar sum, the applicant David Weafer paid £36,000, the applicant Brian Herron £39,000, the applicant Kieran Goulding £37,000, and that each of the applicants had to borrow substantially in order to effect these purchases. They say each will suffer considerable financial loss because of the 1992 Regulations.
In reply to these contentions the minister makes a number of points. Firstly, it is pointed out that Thomas Hempenstall was granted a licence on 17 November 1989, Patrick Hempenstall was granted a licence on 17 April 1990, and Kieran Goulding was granted a licence on 21 November 1989 and at the time that these applicants obtained these licences there was no restriction on the availability of new hackney licences. Nicholas Lewis obtained his licence on 24 January 1992, David Weafer obtained a licence on 30 October 1991, and Brian Herron obtained a licence on 29 October 1991, that is, during the period of the moratorium, between 24 October 1991 and 13 July 1992. Attention is drawn to the fact that in May 1991 (that is before they purchased their licences) the minister had announced a review of the whole system of the licensing of small public service vehicles and at the same time expressed concern at reports of licences being traded for sums between £40,000 and £50,000, and that the moratorium on the grant of new hackney licences introduced in October 1991 was stated to be a temporary one. It is urged that all the applicants should have reasonably expected that changes in the licensing arrangements would result from the inter-departmental review which was being undertaken and of which they were aware.
Secondly, it is pointed out that since July 1992, when the impugned regulation came into force, the Department for the Environment has monitored the prices pertaining to the sale of taxi plates as indicated in the daily press and that from an examination of the prices of plates offered for sale no reduction in the price has resulted from the making of the July 1992 Regulations. The minister therefore submits that the return to the regime which pertained prior to the introduction in October 1991 of the temporary moratorium has not had any deleterious effect on the value of the applicants’ licences. He points to the fact that, at a time when it is claimed the 1983 Regulation relating to the prohibition on radio communication by hackney cabs was in operation the value of licences was extremely high (as shown by the purchase price paid by the applicants) and that no diminution in these prices has resulted from the revocation of the 24 moratorium.
Thirdly, certain legal submissions were made, which I will examine in a moment, to the effect that the making of the 1992 Regulations cannot be regarded as an ‘attack on the applicants’ property rights.
I have reached the following conclusions on the issues which are—
(1) Firstly, on the question of fact the applicants have not been able to satisfy me that on the balance of probabilities the 1992 Regulations have or will have the effect for which they contend. I will accept for the purposes of this judgment that the 1983 prohibition on the use of radios by hackney owners was difficult to enforce and that these regulations were breached to a significant extent in the years prior to October 1991 (when the 1991 Regulation restricting the issue of new hackney licences was first introduced). There were thus three features of the pre-October 1991 regime in taximeter areas which are presently relevant, (a) there were no restrictions on the number of hackney licences which could be issued, (b) there was a significant non-compliance with the 1983 Regulations by hackney owners and (c) taxis in these areas were subject to a number of legal restraints to which hackneys were exempt. But it is significant to note that in these conditions from 1978 (when transfer of taxi plates was first permitted and the number of new taxi licences restricted) until October 1991 taxi plates acquired a substantial value and a vigorous trade in them developed. No reason has been advanced to explain why the termination of the temporary moratorium on the issue of new hackney licences and the return to the pre-October 1991 regime should produce results different from those which existed for many years prior to the moratorium. And no evidence has been adduced to contradict the respondent’s evidence that the termination of the moratorium has not in fact affected the market price of taxi plates. Apparently, a flourishing market in the sale of taxi plates presently exists just as it did prior to October 1991. I must hold therefore that the applicants have failed to establish that the minister’s actions have resulted in a diminution in the value of their taxi licences and accordingly have failed to establish that an attack on their property rights has taken place.
(2) Secondly, even if it were established that the making of the 1992 Regulations resulted in a diminution in the value of the applicants’ taxi plates this would not as a matter of law amount, in my opinion, to an attack on the applicants’ property rights. Property rights arising in licences created by law (enacted or delegated) are subject to the conditions created by law and to an implied condition that the law may change those conditions. Changes brought about by law may enhance the value of those property rights (as the 1978 Regulations enhanced the value of taxi plates by limiting the numbers to be issued and permitting their transfer) or they may diminish them (as the applicants say was the effect of the 1992 Regulations). But an amendment of the law which by changing the conditions under which a licence is held reduces the commercial 25 value of the licence cannot be regarded as an attack on the property right in the licence — it is the consequence of the implied condition which is an inherent part of the property right in the licence.
(3) Thirdly, a change in the law which has the effect of reducing property values cannot in itself amount to an infringement of constitutionally protected property rights. There are many instances in which legal changes may adversely affect property values (for example, new zoning regulations in the planning code and new legislation relating to the issue of intoxicating liquor licences) and such changes cannot be impugned as being constitutionally invalid unless some invalidity can be shown to exist apart from the resulting property value diminution. In this case no such invalidity can be shown. The object of the exercise of the ministerial regulatory power is to benefit users of small public service vehicles. It has not been shown or even suggested that the minister acted otherwise than in accordance with his statutory powers. Once he did so then it cannot be said that he has ‘attacked the applicants’ property rights thereby because a diminution in the value may have resulted.
I must hold therefore that by making the 1992 Regulations, the minister did not unconstitutionally affect the applicants’ property rights.
(b) Estoppel
The applicants’ second ground of attack is based on the law of estoppel as developed in the doctrine of legitimate expectation. Arising from what it is claimed that the minister said in the course of an interview with the president of the Taxi Owners Association on 16 October 1991 it is urged that the applicants entertained a legitimate expectation that the moratorium he had imposed on the issue of new hackney licences would not be lifted until all policy decisions to be taken in the light of the inter-departmental review had been taken, and that contrary to the expectation thus encouraged the minister revoked the moratorium before making those decisions. He is precluded from doing so it is said by the operation of the doctrine of legitimate expectation as developed in recent decisions in the courts in this country and in England.
This claim raises a question of fact and one of law. I will deal firstly with the issue of fact.
The minister met Mr John Usher, the President of the Irish Taxi Drivers Federation, at a meeting which Mr Usher says took place on 16 October 1991. According to his affidavit the minister confirmed that he was stopping the issue of hackney licences ‘pending resolution of the various issues which had been raised concerning the overall operation of the taxi and hackney business in Ireland, and that ‘nothing would be done until all of the problems concerning taxis and hackneys had reached a satisfactory resolution. He states that it was his understanding that there would be no question of a piecemeal implementation of whatever policy decisions the minister came to. In an affidavit in reply 26 to this part of the case Mr Kevin Ring, the acting principal in the Driver and Traffic Control Section of the department states that the minister had a meeting with Mr Usher on the 24 October 1991, and not on 16 October 1991, and that he was in attendance at the meeting. He states that the meeting was held to advise the federation that the minister had earlier that day made regulations to implement the interim recommendations of the advisory committee and that at the meeting the minister outlined and explained what was in the regulations and in the press statement which he had approved prior to the meeting. The minister, Mr Ring states, conveyed to Mr Usher the terms of the press statement and his evidence is that the minister gave no commitment in relation to the application of the moratorium other than that it would be maintained pending completion of the review. Further, Mr Usher was informed that it was intended that the moratorium was to be temporary. This was clearly stated in the press statement which the minister issued. Having referred to the fact that the minister had accepted the interim recommendations of the inter-departmental committee and having announced a number of decisions taken on foot of these recommendations it went on to state:
pending the completion of the current review, the minister has decided that, with the exception of the new taxi licences being issued in Dublin no small public service vehicle licence will be issued from today unless an application has already been received and is in order.
It is accepted on the applicants’ behalf that Mr Usher is incorrect in his recollection that the meeting with the minister took place on 16 October and it is agreed that it was held on 24 October, that is the day on which the regulation imposing the temporary moratorium was issued. The evidence of Mr Ring to the effect that the minister had the press statement with him and that he conveyed its terms to Mr Usher is likewise not controverted. A difference of recollection however, exists, as to what the minister said to Mr Usher, a difference which could only be resolved by hearing oral evidence. I do not, however, think that it is necessary for me to adjourn the application for this purpose because even if I accept that the minister used the words which Mr Usher says he used I do not consider that they could possibly bear the meaning which he now seeks to put on them. The meeting took place in the context of the making of the new regulations and the issue of a press statement explaining them. Even if the minister had assured Mr Usher that he was stopping the issue of hackney licences pending the resolution of the various issues concerning the operation of the taxi and hackney business in Ireland, Mr Usher must also have been aware that the moratorium was only a temporary one, that it had been imposed following an interim recommendation of the inter-departmental committee and only pending the completion of the inter-departmental review. The words used by the minister 27 could not reasonably have been understood as meaning that once the review was completed the moratorium would remain until all the decisions on all problems referred to the committee and dealt with in their final report had been taken. This could take some considerable time to achieve and there was no reason why during that time the moratorium should remain in place. I do not think therefore that the minister said anything at the meeting which now precluded him or now precludes his successor from lifting the moratorium.
But even if the words used by the minister could reasonably be construed as the applicants say they should be they do not, in my view, have the legal consequences claimed.
The law relating to the doctrine of legitimate expectation is an evolving one, whose parameters have not yet been defined and whose exact scope has not yet been established. That it will be applied in our courts has been made clear in the judgment of the Chief Justice in Webb v Ireland [1988] IR 353 who in the course of his judgment (at p. 384) pointed out that the doctrine is an aspect of the well-recognised equitable concept of promissory estoppel whereby a promise or representation as to intention may in certain circumstances be held binding on the representor or promisor. Applying this concept the court held that an unqualified assurance given by the director of the National Museum that the plaintiff would be honourably treated in relation to the deposit by him with discretion of valuable celtic artefacts which he had found was binding on the minister. The doctrine has been applied by the Privy Council in England in Attorney General of Hong Kong v Ng Yuen Shiu [1983] 2 AC 629 in which it was held that an announcement of an intention as to the procedures to be adopted in the case of asylum-seekers in Hong Kong imposed a legal obligation to follow such procedures, and recently in this country, in another asylum-seekers case (Fakih v Minister for Justice [1993] ILRM 274) in which the court held in favour of asylum-seekers who claimed that the minister was bound to apply procedures to their applications in accordance with undertakings given by him to the United Nations.
It is urged by Hugh Geoghegan SC on behalf of the minister that the doctrine on which the applicants rely is part of the well established principles of promissory estoppel and that according to these principles no estoppel can arise to prevent the discharge by a minister of a statutory discretion (Spencer Bower & Turner, Estoppel by Representation , 3rd ed., p. 141 and see Dublin Corporation v McGrath [1978] ILRM 208 and Western Fish Products v Penwith D.C. [1981] 2 All ER 204) and that as the making of regulations under the Road Traffic Acts constitutes the discharge of a discretionary function the applicants cannot successfully plead that anything said at the meeting of 24 October 1991 can justify the court declaring invalid the July 1992 Regulations. Frank Clarke SC on behalf of the applicants accepts this general principle but argues that in this case the minister has made a representation as to the procedures he will 28 adopt when exercising his statutory functions and that this representation in respect of procedures should have the same effect as those in the asylum cases to which I have referred. I do not think that this submission is correct. The assurance or representation which it is alleged the minister gave was to the effect that he would defer making regulations for an indeterminate period and did not relate to the procedures he would adopt when making them, and it seems to me that in this case I must apply the principle to which I have been referred and hold that the minister cannot be estopped from making the regulation. And this case affords an excellent justification of the principle I am applying. The inter-departmental committee’s report is a very detailed and comprehensive one containing a wide range of recommendations. Obviously, the report will require careful consideration and decisions on all the matters raised must of necessity take time. Amongst its recommendations the report recommended an immediate short-term pilot project of 50 taxi licences in respect of vehicles specially adapted to accommodate persons in wheelchairs. As well as terminating the October 1991 moratorium the minister in his July regulation gave effect to this recommendation. If the applicants’ submissions are correct then this part of the regulation, being a piecemeal implementation of the committee’s report, is also invalid. A rule of law which would produce this result cannot be correct. It seems to me that the law should not trammel the exercise by a minister of his statutory functions even if, in the light of new information and advice, he exercises them in a manner contrary to an earlier statement of intent.
I must therefore refuse these applications.
Gilligan v. Criminal Assets Bureau
[1997] IEHC 106; [1998] 3 IR 185 (26th June, 1997)
THE HIGH COURT
1997 No. 1667P
IN THE MATTER OF THE CONSTITUTION AND
IN THE MATTER OF THE PROCEEDS OF CRIME ACT, 1996
BETWEEN
JOHN GILLIGAN
PLAINTIFF
AND
THE CRIMINAL ASSETS BUREAU, BARRY GALVIN,
THE REVENUE COMMISSIONERS, REVENUE SHERIFF FRANK LANNIGAN,
THE GARDA COMMISSIONER, IRELAND AND THE ATTORNEY GENERAL
DEFENDANTS
JUDGMENT of McGuinness J. delivered the 26th day of June, 1997
In this case the Plaintiff claims a declaration that the Proceeds of Crime Act, 1996 and in particular Sections 2, 3, 4, 6 and 7 thereof, are unconstitutional. He also, in his plenary summons, claims damages including but not limited to Constitutional Damages.
BACKGROUND
On 21st November, 1997 in proceedings entitled “The High Court 1996
1. No. 10143P Between Michael F. Murphy, Plaintiff and John Gilligan, Geraldine Gilligan, Tracy Gilligan and Darren Gilligan, Defendants”, an Order was made by the High Court pursuant to Section 2 of the Proceeds of Crime Act, 1996 preventing John Gilligan from disposing or otherwise dealing with the property specified therein. Those proceedings were grounded on an Affidavit sworn by Michael f. Murphy, a Chief Superintendent of An Garda Siochana. Chief Superintendent Murphy deposed to his belief that the property forming the subject matter of the application was directly or indirectly the proceeds of crime. He averred that this belief was supported by a long history of involvement in crime by the Plaintiff and the accumulation by him of very substantial assets in a short period of time without his enjoying any apparent lawful of source of income. He also averred to the belief by the Gardaí that the Plaintiff had a significant involvement in the importation of narcotics. The Plaintiff did not swear an affidavit in those proceedings.
2. On 5th and 19th December, 1996, orders were made pursuant to Section 3 of the Proceeds of Crime Act, 1996 preventing the Plaintiff from disposing or otherwise dealing with this property. A further motion by Chief Superintendent Michael F. Murphy was due to be heard seeking the appointment of a Receiver under Section 7 of the Proceeds of Crime Act, 1996 on February 13th 1997. On the same day (13th February, 1997) the Plaintiff issued his Plenary Summons challenging the constitutionality of the proceeds of crime Act, 1996.
3. In his Statement of Claim in the proceedings now before the Court the Plaintiff states that he is a businessman and professional gambler and goes into very considerable detail in regard to the properties which were affected by the Orders made by this Court in the original proceedings pursuant to the proceeds of Crime Act, 1996. He states that it had been his intention, pursuant to a Separation Agreement made between himself and his wife, Geraldine, to convey much of this property into the sole name of his wife Geraldine but that this intention had not in fact been carried out. The said Separation Agreement was neither produced nor exhibited in the present proceedings. The Plaintiff states that he is part owner of many of the affected properties. He states that he acquired the majority of the properties held both by himself and his wife through payments by way of a loan of approximately £4 million made to his wife and himself jointly by a Mr. Joseph Saouma. He also expended monies from his gambling “float” on the acquisition of the properties. No explanation is given as to the identity of Mr Saouma or as to the reasons for the £4 million loan. However, the present proceedings are not a trial of the facts relating to the Plaintiff’s financial background. I can only assume that these matters in regard to the Plaintiff’s properties as set out in his statement of claim serve to establish the locus standi of the Plaintiff to maintain a claim against the constitutionality of the 1996 Act.
4. It is abundantly clear that the Plaintiff has this locus standi under the criteria set out in Cahill -v- Sutton [1980] IR 241. This is accepted by the Defendants and by this Court.
THE STATUTE
5. I will refer later in this Judgment to specific sections of the Proceeds of Crime Act, 1996 (the 1996 Act) which are impugned by the Plaintiff. At this point, however, it will be of assistance to outline the structure or scheme of the Act.
Section 1 of the Act defines “Proceeds of Crime” as:-
“Any property obtained or received at any time (whether before or after the passing of this Act) by or as a result of or in connection with the commission of an offence. ”
“Member” is defined as a member of the Garda Siochana not below the rank of Chief Superintendent. “Authorised officer” means an officer of the Revenue Commissioners authorised in writing by the Revenue Commissioners to perform the functions conferred by this Act on authorised officers.
Under Section 2 an application may be made to the Court on an ex-parte basis by a member or an authorised officer and if it is “shown to the satisfaction of the Court” that a person is in possession or control of property and that that property
“constitutes directly or indirectly proceeds of crime or was acquired in whole or in part with or in connection with property that, directly or indirectly, constitutes proceeds of crime”,
the Court is empowered to make an Interim Order prohibiting any person named as a Respondent from disposing of or otherwise dealing with the whole or, if appropriate, a specified part of the property or diminishing its value during a period of twenty-one days from the date of the making of the Order. The total value of the property to which such an Interim Order applies must be not less than £10,000. The Court may vary or discharge this Interim Order at any time while it is in force where an application is made by the Respondent or any other person claiming ownership of the property if it is shown that inter alia the property is not the proceeds of crime as defined in the Act.
Under Section 3 of the Act the Court is empowered to grant an Interlocutory Order prohibiting the Respondent or any other person from disposing of or otherwise dealing with the property unless it is shown to the satisfaction of the Court on evidence tendered by the Respondent or any other person that the property does not constitute the proceeds of crime as defined in the Act. Again the value of all the property to which the Order would relate must be over £10,000. It is also provided that the Court “shall not make the Order if it is satisfied that there would be a serious risk of injustice”. At any time when an Interlocutory Order pursuant to Section 3 is in force the Court, on application to it at any time by the Respondent or any other person claiming ownership of any of the property concerned may, if it is shown to the satisfaction of the Court that the property does not constitute proceeds of crime or that the Order causes any other injustice, discharge or, as may be appropriate, vary the Order. An Interlocutory Order is to continue in force (if it is not discharged or varied) until the determination of an application for a disposal Order pursuant to Section 4 of the Act in relation to the property concerned.
Under Section 4 of the Act, where an Interlocutory Order has been in force for a period of seven years in relation to property, the Court is empowered to direct that the whole or if appropriate a specified part of the property be transferred to the Minister for Justice or such other person as the Court may determine. The Court is not to make such an Order if it is shown
“to its satisfaction that the particular property does not constitute, directly or indirectly, proceeds of crime and was not acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes proceeds of crime.”
6. Under sub-section (8) the Court is not to make a Disposal Order if it is satisfied “that there would be a serious risk of injustice”. Sub-section (4) provides:
“A Disposal Order shall operate to deprive the Respondent of his or her rights (if any) in or to the property to which it relates and, upon the making of the Order, the property shall stand transferred to the Minister or other person to whom it relates.”
7. Sub-section (5) provides:
“The Minister may sell or otherwise dispose of any property transferred to him or her under this Section, and any proceeds of such a disposition and any monies transferred to him or her under this Section shall be paid into or disposed of for the benefit of the Exchequer by the Minister.”
8. Under sub-section (7) it is provided that the Court:
“If it considers it appropriate to do so in the interests of justice, on the application of the Respondent or, if the whereabouts of the Respondent cannot be ascertained, on its own initiative,”
may adjourn the hearing of an application for a Disposal Order for a period not exceeding two years as the Court considers reasonable.
Section 5 provides for ancillary Orders which may be necessary to enable a Disposal Order to have full effect.
Section 6 sub-section (1) provides:
“At any time while an Interim Order or an Interlocutory Order is in force, the Court may, on application to it in that behalf by the Respondent or any other person affected by the Order, make such Orders as it considers appropriate in relation to any of the property concerned if it considers it essential to do so for the purpose of enabling –
(a) the Respondent to discharge the reasonable living or other necessary expenses (including legal expenses in or in relation to proceedings under this Act) incurred or to be incurred by or in respect of the Respondent and his or her dependants, or
(b) the Respondent or that other person to carry on a business, trade, profession or other occupation to which any of that property relates.”
9. The remainder of this Section deals with conditions and restrictions which may apply to such an Order and with notice in regard to an application for an Order under sub-section (1).
Section 7 provides that where an Interim Order or an Interlocutory Order is in force the Court may at any time appoint a Receiver:-
“(a) To take possession of any property to which the Order relates,
(b) In accordance with court’s direction, to manage, keep possession or dispose of or otherwise deal with any property in respect of which he or she is appointed.”.
10. Sub-section (2) provides certain indemnities for a Receiver appointed under the Section.
Section 8 provides for the admissibility in evidence of the belief of a member (i.e. a member of the Garda Siochana not below the rank of Chief Superintendent) or an authorised officer of the Revenue Commissioners as defined in the Act that the assets in the possession or control of a person are the proceeds of crime. Under sub-section (1):-
“If the Court is satisfied that there are reasonable grounds for the belief aforesaid, this statement shall be evidence”
of the fact that the assets in possession or control of a person are the proceeds of crime. Sub-section (2) provides that the standard of proof required to determine any question arising under the Act shall be that applicable to civil proceedings.
11. Sub-section (3) deals with the publication of proceedings as follows:-
“(3) Proceedings under this Act in relation to an Interim Order shall be heard otherwise than in public and any other proceedings under this Act may, if the Respondent or any party to the proceedings (other than the Applicant) so requests and the Court considers it proper, be heard otherwise than in public.
(4) The Court may, if it considers it appropriate to do so, prohibit the publication of such information as it may determine in relation to proceedings under this Act, including information in relation to applications for, the making or refusal of and the contents of Orders under this Act and the persons to whom they relate.”
Section 9 provides that the Court at any time during proceedings under Sections 2 and 3 or while an Interim Order or an Interlocutory Order is in force direct the Respondent to file an Affidavit specifying:
“(a) the property of which the Respondent is in possession or control, or (b) the income, and the sources of the income, of the Respondent during such period (not exceeding ten years) ending on the date of the appli
cation for the Order as the Court concerned may specify,
or both.”
Sections 10 to 14 deal with matters such the registration of Interim Orders and Interlocutory Orders, the situation where a Respondent is bankrupt and the winding up of a company in possession or control of property the subject of an Interim or Interlocutory Order.
12. These Sections are not specifically challenged by the Plaintiff and are not of immediate relevance to the instant proceedings.
Section 15 provides as follows:-
“(1) Where an Order under this Act is in force, a members of the Garda Siochana or an officer of Customs and Excise may, for the purpose of preventing any property the subject of the Order be removed from the State, seize the property.
(2) Property seized under this Section shall be dealt with in accordance with the directions of the Court.”
Section 16 provides for the granting of compensation to a Respondent or an owner of the relevant property where an Interim or an Interlocutory Order has been wrongfully made.
THE PLAINTIFF’S SUBMISSIONS
13. The Plaintiff’s challenge to the Proceeds of Crime Act, 1996 as a whole is set out in the form of Particulars in his statement of claim. In summary, the Plaintiff claims that the Act fails to protect the right to a fair trial and the right to fair procedures by assuming without charge, indictment, trial or conviction the existence of a criminal offence and by requiring the Plaintiff to prove on affidavit that, in essence, he is not and was not a criminal and that his assets are not the proceeds of crime. By forcing the Plaintiff to account for his assets the Plaintiff claims that the Act fails to protect his privilege against self incrimination and his right to silence; he also claims that by assuming, without due process of law, that he is guilty of a criminal offence the Act fails to uphold the presumption of innocence. It is claimed that Section 6(1) of the Act, by giving the Court discretion as to whether to allow funds to be released to the Plaintiff for legal expenses, is in breach of Article 40.3 of the Constitution, and that the Act fails to protect the property rights of the Plaintiff from unjust attack – in particular by the appointment of a Receiver and the possible disposal of his assets. The Plaintiff also claims that the Act casts upon him the burden of proving that he is not a criminal, thus reversing the normal burden of proof, and that the Act is generally in breach of natural justice, constitutional justice, and what is described as “constitutionalised natural justice”. The Act fails to protect the Plaintiff’s rights under European Community Law, Article 6 of the European Convention on Human Rights and Article 1 of the first protocol of the European Convention on Human Rights.
14. At the opening of the proceedings before me Council for the Plaintiff,
15. Mr. Langwallner, applied to amend the Statement of Claim so as to add, in summary, a claim that the Act is designed to have retrospective effect, defining as it does in Section 1 the “proceeds of crime” as inter alia including “any property obtained or received at any time (whether before or after the passing of this Act)”, and that thus the Act is in breach of Article 15.5 and other Articles of the Constitution.
16. Counsel for the Defendants, Mr. Clarke and Mr. O’Donnell, did not oppose the proposed amendment, although it would be incorrect to say that they consented to it. I decided to permit the amendment so as to enable the Plaintiff to bring forward as comprehensive a claim as he desired. In allowing this amendment I also bore in mind that since the initiation of his proceedings the Plaintiff has in fact been remanded in custody in Her Majesty’s Prison, Belmarsh in England and is therefore under a disadvantage in giving exact and up-to-date instructions to his Solicitor and Counsel.
17. It should perhaps be noted at this point that the final paragraph of the amendment of the Statement of Claim states as follows:-
“Punishments and sanctions of a criminal or quasi-criminal nature that revoke constitutional rights and/or common law rights, in a specific context, demand the severest Constitutional test of Strict Scrutiny.”
18. Counsel for the Plaintiff provided the Court with detailed and comprehensive written submissions, as indeed did both Counsel for the Defendants. Both sides also provided the Court with very helpful books of authorities.
19. In his submissions on behalf of the Plaintiff, both written and oral,
20. Mr. Langwallner firstly challenged the constitutionality of the 1996 Act as a whole and then dealt with particular aspects of it.
21. In the general part of his argument Mr. Langwallner submitted that the Act:-
“carves out uncharted terrain in this jurisdiction at great cost to civil liberties and constitutional rights, and seeks to transplant the draconian legislation of emergency powers into a different set of legal relationships.”
22. The Act, he said, was Kafkaesque in that on the word of a Chief Superintendent or a Revenue Official an individual can have his assets frozen, put into receivership and disposed of on the basis of assumed criminality, without charge, indictment, trial or conviction. He emphasised, in regard to this general aspect as well as to other particular aspects of the Act, that the Act is in essence a criminal or quasi-criminal statute and demanded what he described as Strict Scrutiny from a constitutional point of view. The Act, he said, enabled the Garda Siochana to short circuit and circumvent ordinary criminal procedures and to abandon normal methods of criminal investigation. As far as the Plaintiff himself was concerned there was no current charge against him in this jurisdiction. Crimes were unspecified and, if any, must have occurred in the past.
23. Counsel’s attack on the Act as whole ranged widely, referring to works of literature such kafka’s “The Trial” and Arthur Miller’s “the Crucible” and to historical episodes such as The Salem Witch Trials and the McCarthy era in the United States. As far as this aspect of this argument was concerned I would to some degree accept the criticism made by
24. Mr. Clarke, Counsel for the first, second, third, fourth and fifth named Defendants, that the argument was political or polemical rather than strictly legal in content. However, in fairness to Counsel for the Plaintiff, it must be accepted that the protection of the rights of citizens, as established under the Constitution, is an extremely important element of the function of the courts.
25. Counsel for the Plaintiff, in dealing with the claim that the Act was contrary to natural or constitutional justice, referred to the judgment of the learned Walsh J. McGee -v- Attorney General [1974] IR 284 at page 310 where the learned Judge stated:-
“Articles 41, 42 and 43 emphatically reject the theory that there are no rights without laws, no rights contrary to the law and no rights anterior to the law. They indicate that justice is placed above the law and acknowledge that natural rights, or human rights, are not created by the law but that the Constitution confirms their existence and gives them protection.”
26. He also relies on a passage in the judgment of the learned Gannon J. in The State (Healy) -v- Donoghue [1976] IR 325 at page 335:-
“The phrase ‘in due course of law’ in Article 38.1 carries with it a sufficient guide and direction for the Courts. It is a phrase of very wide import which includes in its scope not merely matters of constitutional and statutory jurisdiction, the range of legislation with respect to criminal offences, and matters of practice and procedure, but also the application of basic principles of justice which are inherent in the proper course of the exercise of the judicial function. The sense of justice is fundamental in human nature and from it derives essential rights which do not require any positive law for their enunciation.”
27. The Act, Mr. Langwallner submits, vitiates not only the express constitutional rights of the Plaintiff but also his rights anterior to the Constitution and deriving from the natural law.
28. The more particular parts of Mr. Langwallner’s submissions on the Act may conveniently be divided into sections. Firstly, he submits that Sections 2 and 3 of the Act are in breach of Article 38.1 of the Constitution in that they require the Plaintiff to establish that the property which has been frozen under those sections was not the proceeds of crime. This fails to protect the presumption of innocence and shifts the burden of proof in what is, in reality, a criminal or quasi-criminal matter onto the Plaintiff. He submits that there is a want of fair procedures – such as would apply through charge, trial and conviction of the Plaintiff – in the scheme set out in Sections 2 and 3 and that the sections are in breach of Articles 40.3 and Article 34 of the Constitution in requiring that the Plaintiff establish “that he is not a criminal”. He submits that proceedings under the Act are in essence criminal rather than civil, and refers to the indicia of criminal proceedings as set out in Melling -v- O’Mathghamhna [1962] IR 1. In particular he refers to the judgment of the learned Kingsmill Moore J. in that case at page 34 of the report where the learned judge stated:-
“Rightly or not, trial by jury had for centuries been regarded popularly as a most important safeguard for the individual, a protection alike against the zeal of an enthusiastic executive or the rigidity of an ultra conservative judiciary. Especially was this so in the history of Ireland. It seems to me reasonably clear that the Saorstát Eireann Constitution meant to preserve and extend this right.”
29. In regard to the presumption of innocence Counsel for the Plaintiff submits that there is a specific recognition of this right in the cases of Hardy -v- Ireland [1994] 2 IR 550 and O’Leary -v- Attorney General [1993] 1 IR 102.
30. ´Mr. Langwallner went on to argue that the right to silence, or the privilege against self-incrimination, had been recognised as a constitutional right either under Article 38.1 or under Article 40 in both Heaney -v- Ireland [1996] 1 IR 580 and D.P.P. -v- Quilligan [No. 3] [1993] 2 IR 305. The effect of the Act as a whole was to force the Plaintiff to account for his assets. In particular under Section 9 the Court may direct the Plaintiff to file an affidavit specifying both the property of which he is in possession or control and his income and the sources of his income during a period of up to ten years. If he failed or refused to file such an affidavit he could be found to be in contempt of Court, with all the penalties attaching thereto. All his property might be put into receivership and ultimately sold. There was also an obvious danger that information revealed pursuant to Section 9 or pursuant to other sections of the Act would later be used by the State to mount a prosecution against the Plaintiff or to charge him with other offences. In this context Mr. Langwallner referred to the judgment of the learned Walsh J. in the European case of Saunders -v- United Kingdom (43/1994/490/572) in the European Court of Human Rights. In his judgment the learned Walsh J. stated as follows:-
“It also ensured that fair trials could not be circumvented by the use of investigating bodies instead of by a trial and court. In effect, the categories of Governmental investigation in which this privilege plays an especially important role is where there are general investigations by executive agencies or such like bodies and the questioning of a suspect by the police and State agencies prior to criminal trials…. In my opinion the privileged avoidance of self-incrimination extends further than answers which themselves will support conviction. They must logically embrace all answers which furnish a link in the chain of evidence needed to prosecute a conviction. It is sufficient to sustain the privilege where it is evident from the implications of the questions and the setting in which they were asked that a responsive answer to the question or an explanation as to why it cannot be answered could also be dangerous because injurious disclosure could result.”
31. Counsel for the Plaintiff went on to submit that the entire scheme of the 1996 Act constituted an unjust attack on the Plaintiff’s property in breach of Article 40.3.3 and Article 43 of the Constitution. He argued that there were no exigencies of the common good or principles of social justice that would justify the freezing of the Plaintiff’s assets, the placing of them in receivership and their subsequent disposal. The Act was “over broad in accomplishing State objectives”. In this connection he referred to Buckley and Others (Sinn Féin) -v- Attorney General and Others (the “Sinn Féin Funds” case), stressing that in that case the right to private property even of an organisation deemed to be subversive was upheld. He also referred to Cox -v- Ireland [1992] 2 IR 503 where Section 34 of the Offences Against the State Act 1939 was deemed to be unconstitutional largely on account of its impermissibly wide and overbroad ambit. In the case of the 1996 Act, Mr. Langwallner argued that concepts of social justice or the common good did not warrant the expropriation of private property on the basis that it is tainted by criminality without the related proof of a criminal offence or at least a charge.
Section 6 of the Act permits the Court, where it believes it necessary to do so, to allow assets otherwise frozen pursuant to Section 2 and/or Section 3 of the Act, to be employed for the purposes of legal expenses in or in relation to proceedings under the Act. The Applicant argues, not that this discretion to grant or withhold legal expenses might be abused, but that it should not exist at all. He refers to the constitutionally recognised right of access to the Courts as set out in McCauley -v- Minister for Posts and Telegraphs [1966] IR 345 and to the right to legal representation adumbrated in State (Healy) -v- Donoghue [1976] IR 325, and submits that the Act in imposing any discretion on a Judge to refuse the necessary defrayment of legal expenses is unconstitutional.
32. Counsel for the Plaintiff went on to submit that by its definition of “Proceeds of Crime” in Section 1 the Act imposes forms of sanction and punishment which operate retrospectively contrary to Article 15.5 of the Constitution. Property received or obtained prior to the passing of the Act would not, he said, have been subject to the powers granted to the State under the Act and would not have been liable to be frozen, put into receivership or disposed of at the time and it was unconstitutional to provide that they should be so affected after the passing of the 1996 Act,.
33. Counsel for the Plaintiff submitted that the 1996 Act was considerably more draconian than legislation affecting the proceeds of crime in either Britain or the United States and that in those countries in order for forfeiture to take place there must have been a criminal conviction or at the very least a criminal charge against the person whose property was subject to forfeiture.
34. Mr. Langwallner went on to give a comprehensive survey of European Community Law under both the Treaty of Rome and the Maastricht Treaty. He submitted that the right to a fair hearing was a fundamental principle and right of Community Law and applied to any legislation purporting to implement a directive of the European Community and in this context he submitted that the 1996 Act was an implementation of directive 91/30 [1991] OS L 166/77 [The Money Laundering Directive]. He submitted that as the Proceeds of Crime Act, 1996 vitiated fairness of procedure there was a discretion in this Court to refer the matter to the European Court unless it could be decided on other grounds not involving a point of Community Law. He submitted that this Court ought to use such discretion to refer this matter to the European Court. It was not entirely clear to me what particular aspect of the 1996 Act should be referred to or how such a reference should be framed. In any case I considered that the primary task of this Court was to consider the provisions of the Act in the light of Bunreacht na hEireann.
35. Finally Mr. Langwallner referred generally to Article 6 of the European Convention on Human Rights which states, inter alia, at sub-paragraph (1):-
“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
36. He also referred to Article 1 of the First Protocol which provides:-
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions shall not, however, in any way impair the right of the State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or secure the payment of taxes or other contributions or penalties.”
37. Mr. Langwallner suggested in his written submissions that
“this Court should overrule decisions that failed to recognise that the European Convention on Human Rights stands in preference to National Law”
and he appeared also to be urging this course upon me in his oral submissions.
38. It is clearly established by authority binding on this Court that the European Convention on Human Rights does not form part of domestic law of the State. In Re O’Laighleis [1960] IR 93 the Supreme Court stated:-
“The Oireachtas has not determined that the Convention on Human Rights and fundamental freedoms is to be part of the domestic law of the State, and accordingly this Court cannot give effect to the Convention if it be contrary to domestic law or purports to grant rights or impose obligations additional to those of domestic law.”
39. This determination has been applied consistently, notably in the decision of the Supreme Court in the case of Norris -v- Attorney General [1984] IR 36. It is clearly not open to this Court to approach the European Convention on Human Rights in the manner suggested by Mr. Langwallner. While there can be no question but that this Court is entitled to have regard to decisions of the Court of Human Rights in construing provisions of the Constitution there can be no question of any decision of the European Court of Human Rights furnishing in and of itself a basis for declaring legislation unconstitutional. I am bound by the repeated decisions of the Supreme Court that the European Convention on Human Rights is not a part of the domestic law of this jurisdiction. Nor do I propose to make any reference in regard to the provisions of the proceeds of Crime Act, 1996 to the European Court of Justice pursuant to Article 177 of the Treaty of Rome, as I consider that the matter may be decided on grounds not involving a point of Community Law.
THE DEFENDANTS’ CASE
(A) Evidence
40. Before making his legal submissions to the Court Counsel for the first, second, third, fourth and fifth named Defendants, Mr. Clarke, called evidence with a view to establishing the factual background against which the Oireachtas had enacted the proceeds of Crime Act, 1996 and to showing the practical application of the Act.
41. Superintendent Felix McKenna is acting Chief Bureau Officer of the Criminal Assets Bureau. He had previously been attached to the serious crime squad and was subsequently a Detective Inspector in Blackrock, Co. Dublin. He gave evidence of having detailed knowledge of criminals and their activities through investigations and through Garda intelligence. He described the nature and activities of the Criminal Assets Bureau as set up in October 1996 pursuant to the Criminal Assets Bureau Act, 1996. He said that the objectives of the Bureau were the identification of assets which derive or were suspected to derive from criminal activities and the taking of appropriate action under the law to deny or deprive those persons of benefiting from such assets. He said that he had been involved in processing a significant number of applications to this Court in relation to assets which were the proceeds of crime. He outlined some of these cases. He described the effects which the activities of the criminal assets bureau, under the Proceeds of Crime Act, were having on the operations of major criminals. He said that they had begun to dispose of properties and investments and to move large sums of cash overseas. This had forced them to reinvolve themselves in actual crime (thus making them more vulnerable) rather than paying lesser criminals to work for them.
42. During the 1980’s and 1990’s, he said, major criminals were able to distance themselves from being directly involved in actual crime. They organised crimes which were committed by others and of which they reaped the proceeds. The lesser agents could be caught and convicted; the chief criminals were not, as they were not directly involved . The activities of the Criminal Assets Bureau, under the proceeds of crime Act, meant that major criminals were no longer free to benefit from the fruit of their ill gotten gains without interference. As far as the drugs business was concerned, the major criminals needed large amounts of cash to purchase drugs in England or Holland and very large profits were made by selling them in Ireland. They used these profits to diversify into legitimate businesses such as buying apartment blocks and licensed premises. The activities of these criminals had been curtailed on account of the work of Criminal Assets Bureau. Where they tried to move large sums of cash abroad they were at risk of apprehension. Ordinary criminal investigations were also continuing side by side with the work of the bureau.
43. Under cross-examination the Superintendent accepted that the activities of the Criminal Assets Bureau were unlike normal police work where investigations started from the actual commission of a crime and a person was charged with that crime only if sufficient evidence was assembled against him. The main function of the Bureau was the identification of assets derived from criminal activities and in the course of that activity they decided, on the basis of past convictions, police intelligence, and other available information that a person was a criminal and they moved to seize his assets.
44. Mr. Langwallner questioned Superintendent McKenna about the powers and practices of police forces in other jurisdictions. The Superintendent had experience of inter action with other police forces through, for example, Interpol, but had no detailed legal knowledge of their powers. He was aware that the English police did not have the full extent of the powers available under the Proceeds of Crime Act, 1996 and said that English officers had come over here and examined processes in this jurisdiction with a view to making a submission to the Home Secretary. He knew that in Holland a Bureau similar to the Criminal Assets Bureau existed but that they had to have a conviction of some description before they could pursue the assets.
45. The Superintendent agreed that in England and in Holland the sums of money involved as proceeds of crime would be very much larger than in this jurisdiction. He felt that there were about twenty persons whom he would describe as major criminals operating in this jurisdiction. There would be a lengthy investigative process before any action was taken under Section 2 of the 1996 Act. They would be influenced by the fact that a person had previous convictions. While as yet no one had been arrested, interviewed or charged in connection with the powers of the Criminal Assets Bureau he could envisage that happening in the future. However, some of the persons in respect of whom the Criminal Assets Bureau had made applications to the Court had been arrested and charged through the ordinary processes of investigation carried out by the Gardaí Siochana.
46. Evidence was also given by Deputy Commissioner Noel Conroy of An Garda Siochana. The Deputy Commissioner in his present post has special responsibility for operational functions. He stated that he had been a member of the Gardai Siochana for over thirty three years, twenty five of which had been spent in the area of crime investigation. He had been Detective Superintendent in charge of the Serious Crime Squad in Harcourt Square and from February 1992 to July 1994 he had been Detective Chief Superintendent with responsibility for security and intelligence.
47. Deputy Commissioner Conroy outlined a number of general statistics in regard to crime between the years 1987 and 1995. In outline he stated that all indictable crime recorded had increased by 20% from 1987 to 1995 and during that period the Garda detection rate had risen from 32.5% to 38.8% in 1995. However, while the value of property stolen had increased by 64.4% from 1987 to 1995 the percentage rate of stolen property recovered had decreased from 9.4% to 7.6%. Serious crime which he described as robberies and aggravated burglaries, including those where firearms were involved, had increased by almost 50% from 1987 to 1995 but the detection rate for this type of crime had decreased from 25.9% to 22% over the same period.
48. As in the case of the previous witness, Deputy Commissioner Conroy spoke of a significant change in the structure of serious organised crime. During the 1980’s there had been a rather high level of serious armed robbery and the Gardai had been reasonably successful in dealing with those who were actually committing those crimes. Quite a number of those particular criminals served prison sentences. However the Gardai were not so successful in recovering the proceeds of the armed robberies and when the persons who had been convicted of the crimes were released from prison they “diversified” and eventually moved into the area of supplying drugs. Over time they completely removed themselves from the actual movement of drugs in that they had what he described as “a number of runners on the ground, trusted people that would courier the drugs, not alone through Ireland but through mainland Europe “. The principals in this trade were able to pay cash to various international traffickers in drugs and then make very large profits on re-selling the drugs in Ireland. This had an extremely detrimental effect on Irish society particularly in the City of Dublin. Both the principals and the leading couriers became extremely wealthy and were able in a sense to command respect within the criminal community. Both their power and their wealth ensured that people that acted as runners or suppliers of drugs would not in any way inform on them or assist the Gardai in any investigation. If the lesser couriers or suppliers were arrested, charged and convicted they were readily replaced and no evidence could be assembled in regard to the principals.
49. Deputy Commissioner Conroy described this situation as affecting society in two ways. First of all it was an example and an inducement to other would-be criminals to embark on a life of crime – as leading to wealth and power – and secondly it caused frustration and disillusionment among other citizens together with a tendency for the criminal justice system as a whole to fall into disrepute. He felt that that made ordinary people less likely to co-operate with the Gardai either by coming forward as witnesses or by generally partaking through the giving of information.
50. The Deputy Commissioner stressed that the work of the Criminal Assets Bureau was in parallel with the normal investigating procedures of the Gardai and that the need to obtain evidence to support prosecutions in order to obtain convictions for criminal activity must remain the first priority of the Gardai. However the need to deprive criminals of the proceeds of crime was also vitally important.
51. The witness went on to describe some of the work of the National Drugs Unit of the Garda Siochana which was established in 1995. He gave a list of major drug seizures made by the Gardai during 1995.
52. With regard to the criminal assets bureau which began its work in or about July 1996 the Deputy Commissioner felt that it had been most successful in the short time in which it had been in operation. He agreed with the previous witness that it had given rise to major criminal figures leaving the jurisdiction, trying to remove assets from the jurisdiction and trying to dispose of properties that they acquired from their criminal activities. Already the provisional crime figures for 1996 and early 1997 showed a certain decrease and, while the change was not enormous, it was a healthy picture. He also agreed with the previous witness that the effect of the work of the Criminal Assets Bureau, pursuant to the proceeds of Crime Act, 1996 was to drive the major criminals back “on to the shop floor” of crime – in other works to commit crimes themselves and, therefore, to lay themselves open to arrest, charge and conviction.
53. Under cross-examination, the Deputy Commissioner dealt with the processing of information and intelligence as between the Garda Siochana generally and the Criminal Assets Bureau. He said that in the course of normal Garda investigation of crime and intelligence gathering the Gardai would be in possession of a lot of information regarding the wealth which major criminals would have acquired from their criminal activities. He saw it as a role for the Garda Siochana that intelligence would be made available to the Criminal Assets Bureau in an effort to recover what had been achieved from criminal activity by those involved in crime. He said that the information and intelligence which they had was presented to the Court under the Proceeds of Crime Act either on affidavit or on oral evidence and it was stated that it was believed that these assets were the proceeds of criminal activity. However he stressed that the Gardai and the members of the Bureau were not the deciding factor; that was the function of the Court. Once the Bureau had acquired information the Chief Bureau Officer would consult the legal adviser to the Bureau and the Chief Bureau Officer was the person who made the decision as to whether to go to Court.
54. When questioned by Mr. Langwallner, the Deputy Commissioner accepted that it was an entirely different process from the ordinary procedure that would take place in regard to the arrest and charge of a person who was being charged with receiving stolen goods. He accepted that in the case of a conviction for receiving stolen goods, the Court would normally make a forfeiture Order in respect of goods that had been recovered.
55. When questioned again about the flow of information as between the Gardai Siochana and the Criminal Assets Bureau the Deputy Commissioner said that in the vast majority of cases information was given by the Gardai Siochana to the Criminal Assets Bureau but that it might happen that the Criminal Assets Bureau would give information to the Gardai.
56. The witness spoke of the difficulties inherent in mounting an investigation followed by charge and conviction of the principal criminals to whom he had been referring. He denied that he was looking for extra powers to prosecute but said that he felt that the work of the Criminal Assets Bureau and the operation of the 1996 Act “levelled the playing field a little bit” as between the major serious criminals and society as a whole.
57. Mr. Langwallner went on to cross-examiner the Deputy Commissioner about his contact with other police forces and the powers that were available to them. He agreed that he had contact with other forces in particular in North America, throughout Europe and in Britain and that he understood in general terms that these forces did not have the powers that were made available in the 1996 Act. He accepted that in most of these jurisdictions there would be a necessity for either a conviction or a criminal charge before assets could be forfeited. He said that the consensus of most law enforcement agencies around the world was that the dismantling of many leaders’ networks and the distribution of money from crime was the most effective way of tackling organised crime. Mr. Langwallner put to him that that was “a policeman’s consensus”. The Deputy Commissioner said that he had no doubt that in the not too distant future other jurisdictions would be going down the road that the Irish legislature had gone in this field.
58. When Mr. Langwallner asked the witness why the Gardai did not simply prosecute the major criminals about whom he was speaking the Deputy Commissioner answered that the Gardai would always endeavour to obtain evidence to support a criminal prosecution. That had been their first priority in relation to anybody that was involved in criminal activity and would remain so. However it was hard to get people to co-operate with an investigation and particularly in the case of the criminals whom he had described as principals. He had already outlined that these people would not be found with their hands “right in the middle of the crime”. They had totally distanced themselves from the actual commission of crime or the general movement of the stolen cash or whatever goods might have been obtained. He felt that the overall process in dealing with criminals was both the process to investigate crime and to recover the proceeds of crime from individuals that have profited from it.
THE DEFENDANTS’ SUBMISSIONS
59. While the first five Defendants were represented by Mr. Clarke S.C. and the sixth and seventh Defendants (Ireland and The Attorney General) were separately represented by Mr. O’Donnell S.C., what was basically a joint defence was put forward by both Counsel. I consider that it may be dealt with in general as one defence against the Plaintiff’s challenge to the constitutionality of the 1996 Act.
60. As may be appreciated from the evidence led by Mr. Clarke the general approach of the Defendants to the Act is that it represents a proportionate reaction to an extremely serious situation which at present obtains in the area of crime generally and particularly in the area of drug related crime in this country. The Defendants submit that there is both a theoretical and a practical justification for the enactment of this legislation. As regards the theoretical justification they submit that there is normally no constitutionally protected property interest in assets which have been secured directly or indirectly as a consequence of a violation of the criminal laws of the State. Therefore the State is entitled to institute a procedure for forfeiture of assets which come within this definition. The State is also entitled to establish a procedure for the ascertainment of whether property comes within the definition as stated but that procedure itself must correspond with the requirements of constitutional fairness.
61. As regards the practical justification they refer both to the evidence of Superintendent McKenna and Deputy Commissioner Conroy and to the judgment of
62. Moriarty J. in the case of M. -v- D. (unreported) 10th December, 1996, to which judgment I will refer in more detail later.
63. The Defendants go on to address a number of the specific matters raised by the Plaintiff in his challenge to the Act. The Defendants accept that the essential thrust of the Plaintiff’s claim is a contention that proceedings under the 1996 Act in particular pursuant to Sections 2, 3 and 4 are essentially criminal in nature, but do not have the indicia of a trial in due course of law which is contemplated by Article 38 of the Constitution; that if the proceedings are civil that they impremissibly involve a determination of criminality; and finally that whether criminal or civil in nature , the proceedings impermissibly place an onus of disproof of criminality on a Respondent and/or infringe the privilege against self-incrimination. The Defendants submitted that forfeiture proceedings are in fact civil and not criminal in nature; that there is no constitutional bar on the determination in civil or other proceedings of matters which may constitute elements of criminal offences; and that there is no constitutional objection to proceedings permitting forfeiture unless lawful ownership is established by the party claiming such. The Defendants also drew attention to the fact that the 1996 Act conferred a number of discretions on the Court and that judicial determinations were interposed at a number of stages in the procedure set out in the Act. They submitted that it must be assumed that these discretionary and determinative powers will be exercised constitutionally and referred in this context to the judgment of the Supreme Court in the Adoption (No.2) Bill 1987 [1989] IR 656 at page 661 where it is stated:
“It must be presumed that all proceedings, procedures, discretions and adjudications permitted or prescribed by the Bill are intended to be conducted in accordance with the principles of constitutional justice, and that as between two or more reasonable constructions of the terms of the Bill, that construction that is in accordance with the provision of the Constitution would prevail over any construction that is not in accordance with such provision.”
64. In their more detailed submissions, both written and oral, Counsel for the Defendants dealt firstly with the question as to whether proceedings under the 1996 Act were civil or criminal in nature. They referred to the cases of Attorney General -v- Southern Industrial Trust Limited and Simons (1960) ILTR 161 and to Goodman -v- Hamilton (1) [1992] 2 IR 542. In the latter case the Applicant sought to prohibit a Tribunal of Enquiry from embarking upon a consideration of allegations of criminal activity by the Applicant. The contention that for the Tribunal to embark upon such an enquiry would be unconstitutional was rejected by both the High Court and the Supreme Court. Counsel for the Defendants drew attention to the dictum of Costello J. (as he then was) at page 560 of his judgment in the High Court as follows:-
“It is claimed that the guarantee of fair procedures means that an enquiry into allegations of criminal conduct can only be undertaken by means of the criminal process. The Constitution, however, does not require that a person against whom allegations of criminal misconduct has been made must be charged with a criminal offence and I do not think it is be construed as requiring that a charge be proffered against such a person before allegations of criminal mis-conduct can be investigated by bodies other than the Court”.
65. The Defendants also referred to Clancy -v- Ireland [1988] IR 326 where this Court considered the constitutional validity of Sections of the Offences against the State (Amendment) Act, 1985 which empowered the Minister for Justice to certify that monies were the property of an unlawful organisation, and that those monies stood forfeited to invested in the Minister. In that case Barrington J. held that the 1985 Act in no way transgressed the provisions of the Constitution.
66. On the question of the presumption of innocence and/or the reversal of the burden of proof Counsel for the Defendants pointed out that before any Order could be made pursuant to Section 2 or Section 3 of the 1996 Act it was necessary for the State to establish to the satisfaction of the Court on the balance of probabilities that the Respondent was in possession of or control of assets which comprised directly or indirectly the proceeds of crime. That initial evidential burden had to be discharged by the State before any obligation was imposed upon a Respondent to furnish any evidence to the Court. The Defendants submitted that the procedures did not have the elements or indicia of criminal proceedings as set out in the case law and that therefore Article 38 of the Constitution did not apply to such proceedings. Counsel submitted that the statute did not make any assumption that the Plaintiff was guilty of a criminal offence but merely permitted the adducing of evidence indicating that the property involved was the proceeds of crime which did not necessarily imply that the person in possession of the property committed the crime. However, even if the proceedings were criminal in character the Defendants submitted that in the case of Hardy -v- Ireland [1994] 2 IR 550 and O’Leary -v- Ireland [1995] 1 IR 254 it was clearly established by the Supreme Court that even in criminal cases there was nothing in the Constitution to prohibit absolutely the shifting of an onus or to suggest that the shifting of such an onus would inevitably offend the requirements of due process.
67. In regard to the right to fair procedures under Articles 34 and 40.3.2 of the Constitution the Defendants suggest that the focus of the Plaintiff’s claim was based upon the fact that he was required by statute to disprove the allegation made against him and argue that there was nothing inherently unfair or unconstitutional about a procedure requiring a party to legal proceedings to counter evidence adduced or made against him, nor was there any principle that rendered it unfair for a person to have to prove that property was lawfully and rightfully his. There was nothing to prevent the Plaintiff from making representations to rebut the case made by the Criminal Assets Bureau nor was there any inhibition on the type of evidence he could adduce. He had a right to cross-examine and to have a full hearing before the Court. He also had the residual entitlement pursuant to Section 3 and 4 of the Act that the Court would not make Orders of the nature in question if to do so gave rise to a serious risk of injustice. The Defendants compared the procedure provided for by the 1996 Act with the normal power of the Courts to grant interim and Interlocutory Injunctions and in particular to grant interim Freezing Orders on an ex-parte basis which were followed by interlocutory hearings on Affidavit and finally adjudications in respect of legal rights and liabilities.
68. In regard to the privilege against self-incrimination or right to silence Counsel for the Defendants referred in particular to the case of Heaney -v- Ireland (High Court) [1994] 3 IR 593 and (Supreme Court) [1996] 1 IR 580. They submitted that the Respondent in a case under the Proceeds of Crime Act, 1996 was not compelled to adduce evidence under threat of punishment. He could give evidence freely and seek to realise his assets, or he could decline to say anything that might incriminate him, or he could give evidence omitting any particular that might incriminate him. In Heaney’s case the Supreme Court held that the right to silence was a corollary to the freedom of expression that was conferred by Article 40 of the Constitution. As a consequence, the right to remain silent could be qualified just as the right to freedom of expression could be qualified. The State was entitled to encroach on the citizen’s right to remain silent in pursuit of its entitlement to maintain public peace and order although in this pursuit the constitutional rights of a citizen must be affected as little as possible.
69. With regard to the Plaintiff’s challenge to Section 6 of the 1996 Act in so far as it deals with the release of monies to provide for legal representation, the Defendants submitted that this discretion must be operated constitutionally by the Court.
70. With regard to the Plaintiff’s claim that the 1996 Act infringed the Plaintiff’s constitutional right to property the Defendants reiterated that insofar as the Plaintiff was in possession of or in control of assets which directly or indirectly constituted the proceeds of crime he had no property rights in those assets either under the Constitution or under any other law. They argued that the 1996 Act had been enacted to support a compelling public interest and was reasonably required by the common good. Any damage to the Plaintiff’s property rights insofar as they existed could be compensated for by the provision allowing for the payment of damages under Section 16 of the Act.
71. The Plaintiff had also claimed that his good name was being unjustly attacked in the proceedings under the 1996 Act. The Defendants submitted that through the ability to hold proceedings in camera at each stage of the interim interlocutory procedure, the Act protected the publication of the name of the Respondent and that in fact the Applicant’s good name had not been subjected to any unjust attack.
72. With regard to the Plaintiff’s submissions in regard to the law of the European Community the Defendants submitted that the recitals of Directive 91/308/ECOJL166/77 ( “the money laundering directive” ) made it clear that the institutions of the European Community shared a deep rooted concern as to the importance of restricting the right of persons to the proceeds of crime. The Directive also made it clear that its provisions were without prejudice to the right of Member States to adopt more stringent measures as required by the exigencies of particular circumstances in their own societies. The Plaintiff had also submitted that there had been a breach of the Directive and of European Community Law generally as a consequence of the failure to afford to the Plaintiff a fair hearing. The Defendants submitted that for reasons which they had already set out the Plaintiff was afforded a fair hearing under the Act.
73. With regard to the submission that the provisions of the 1996 Act violated the terms of the European Convention on Human Rights, Counsel submitted that the Convention did not form part of the Law of the State and was not justiciable before this Court. I have already dealt with this point above. The Defendants submitted that there could be no question of any decision of the European Court of Human Rights furnishing in and of itself a basis for declaring legislation unconstitutional. While it was clear that this Court was entitled to have regard to the decisions of the Court of Human Rights in construing provisions of the Constitution, just as this Court might have regard to decisions of other Constitutional Courts, the decision of the Supreme Court in O’B. v. S . [1984] I.R. 316 made it clear that the Courts are obliged to apply the provisions of domestic legislation in preference to decisions of the European Court of Human Rights. I accept the correctness of this contention.
GENERAL APPROACH
74. The general approach of this Court and of the Supreme Court in considering the constitutionality of a law passed by the Oireachtas has been referred to in many previous cases, including the Adoption (No. 2) Bill, 1987. Reference case already referred to.
75. The position was recently effectively summarised by the Chief Justice in the judgment of the Supreme Court delivered on 31st July, 1996 in the case of Croke v. Smith, O’Connor and Others (unreported). In this case the Court was dealing with the constitutionality of Section 172 of the Mental Treatment Act, 1945. While this case was not opened to me by Counsel for either side, I consider that it would be appropriate to refer to it as an authoritative and binding statement of the approach which this Court should take.
76. At page 8 of his judgment, the learned Chief Justice set out the position under the heading “presumption of constitutionality” as follows:
“The approach of the Court when considering the constitutionality of a law passed by the Oireachtas or any provision thereof is well established.
It was held by the former Supreme Court in In Re Article 26 and the Offences against the State (Amendment) Bill, 1940 that:-
‘Where any particular law is not expressly prohibited and it is sought to establish that it is repugnant to the Constitution by reason of some implied prohibition or repugnancy, we are of opinion as a matter of construction, that such repugnancy must be clearly established.’
In delivering the judgment of the Court in East Donegal Co-operative Limited v. Attorney General [1970] I.R. 317 Walsh J. stated:-
‘An Act of the Oireachtas, or any provision thereof, will not be declared to be invalid where it is possible to construe it in accordance with the Constitution; and it is not only a question of preferring the constitutional construction to one which would be unconstitutional where they both may appear to be open, but it also means that an interpretation favouring the validity of an Act should be given in cases of doubt.’
He further stated:-
‘At the same time ……. the presumption of constitutionality carries with it, not only the presumption that the constitutional interpretation or construction is the one intended by the Oireachtas but also that the Oireachtas intended that proceedings, procedures, discretions and adjudications which are permitted, provided for or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice. In such a case any departure from those principles would be restrained and corrected by the Courts.’
As result of these and other decisions of this Court, the Court, in approaching the consideration of the provisions of Section 172 of the Act and its determination of the question as to whether the provisions thereof are invalid having regard to the provisions of the Constitution, must
(1) grant to the impugned provision the presumption of constitutionality unless and until the contrary is clearly established;
(2) not declare the impugned provision to be invalid where it is possible to construe it in accordance with the Constitution;
(3) favour the validity of the provision in cases of doubt, and
(4) must have regard to the fact that the presumption of constitutionality carries with it not only the presumption that the constitutional interpretation or construction is the one intended by the Oireachtas but also that the Oireachtas intended that proceedings, procedures, discretions and adjudications which are permitted, provided for or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice.”
77. Within this framework I propose firstly to consider the various particular challenges made the Plaintiff to the 1996 Act and subsequently to consider the general question as to the proportionality of the legislation to the situation which gave rise to its enactment. In this general consideration there arises the point, quite correctly made in a number of ways by Counsel for the Plaintiff, that the statutes and the cases relied upon by the Defendants were enacted and decided in the context of a subversive threat by illegal armed political groups to the State itself. Many of the cases deal, in fact, with the Offences against the State Act, 1939 and its various amendments. This Court must, as matter of proportionality, consider whether the situation as regards major crime in this country described in the evidence of the two Garda witnesses and referred to in the various submissions, in fact justifies the enactment of measures which are, if not draconian, at least out of the ordinary run of civil legislation.
THE LAW
78. The first matter which falls to be considered is the Plaintiff’s assertion that proceedings brought pursuant to The Proceeds of Crime Act, 1996, while taking the outward form of a civil action, in reality amount to a trial of a criminal offence without the due procedures for such a trial. He submitted that under the Act it was necessary for any Respondent to “prove that he was not a criminal” . If the proceedings are in reality criminal, the Plaintiff then claims that in a number of ways they offend against the provisions of Article 38 of the Constitution.
79. Article 38 provides, insofar as it is relevant, as follows:
“38.1. No person shall be tried on any criminal charge, save in due course of law.
2. Minor offences may be tried by Courts of summary jurisdiction …….
5. Save in the case of the trial of offences under Section 2, Section 3 or Section 4 of this article no person shall be tried on any criminal charge without a jury.”
80. Over the years it has been held that the phrase “in due course of law” is analogous to what is described as “due process” in the constitutional law of the United States of America.
81. The leading case in regard to the indicia of a criminal offence and criminal procedures is Melling v. O’Mathghamhna and The Attorney General [1962] I.R. 1. In that case it was held that smuggling offences under the provisions of Section 186 of the Customs Consolidation Act, 1876 were criminal offences. The facts of the case are too well known to require recital. The Plaintiff claimed that the District Court had no jurisdiction to try the charges because
(a) they were criminal charges within Clause 5 of Article 38 of the Constitution and
(b) they were not minor offences which fell within Clause 2 of Article 38.
82. It was held in the High Court that the charges were not criminal charges but the Plaintiff succeeded on appeal to the Supreme Court in regard to this aspect of his claim. In holding that the charges were in fact criminal charges the Supreme Court set out certain indicia which demonstrated that fact. Kingsmill Moore J. in his comprehensive survey of the authorities starts from the definition of a crime, stating at page 24 to 25 of the report
“What is a crime? The anomalies which still exist in the criminal law and the diversity of expression in statutes make a comprehensive definition almost impossible to frame. ‘The criminal quality of an Act cannot be discerned by intuition; nor can it be discovered by reference to any standard but one: Is the Act prohibited with penal consequences?’ said Lord Atkin in Proprietary Articles Trade Association v. Attorney General for Canada . A recent text book, Cross and Jones, suggests as a definition; ‘A crime is a legal wrong the remedy for which is the punishment of the offender at the instance of the state’. Professor Kenny in the earlier editions of his Outlines of Criminal Law says that ‘crimes are wrongs whose sanction is punitive and is remissible by the Crown if remissible at all’. If we regard the Revenue Commissioners as a branch of the executive acting for the state (and in discharging their functions under the Customs Acts, I think they must be so regarded), an offence under Section 186 would fall within both these definitions. Moreover the offences enumerated in Section 186 possess several features which are regarded as indicia of crimes.
(i) They are offences against the community at large and not against an individual. Blackstone defines a crime as ‘a violation of the public rights and duties due to the whole community, considered as a community’;
4Bl. Comm.5.
(ii) The sanction is punitive and not merely a matter of fiscal reparation, for the penalty is £100 or three times the duty paid value of the goods; and failure to pay, even where the offender has not the means, involves imprisonment.
(iii) They require mens rea for the Act must be done ‘knowingly’ and ‘with intent to evade the prohibition or restriction’. ………. Where mens rea is made an element of an offence it is generally an indication of criminality.”
83. However, all three Judges in the Supreme Court also refer to even more practical indicia of criminality. Lavery J. at page 9 of the Report states:
“Apart from authority, it seems to me clear that a proceeding, the course of which permits the detention of the person concerned, the bringing of him in custody to a Garda Station, the entry of a charge in all respects in the terms appropriate to the charge of a criminal offence, the searching of the person detained and the examination of papers and other things found upon him, the bringing of him before a District Justice in custody, the admission to bail to stand his trial and the detention in custody if bail be not granted or is not forthcoming, the imposition of a pecuniary penalty with the liability to imprisonment if the penalty is not paid has all the indicia of a criminal charge.”
84. Kingsmill Moore J. at page 23 of the Report states
“…… the treatment of a person who is accused of an offence under Section 186 is such as is commonly accorded to a person guilty of a serious crime. The present Plaintiff was arrested, taken to the cells in the Bridewell, cautioned, charged, put into the dock and remanded on bail. If he had not been able to procure bail, he might have been remanded in custody. His belongings were searched. If he were convicted he would be sentenced to pay £100 in respect of each offence – £1,400 in all – and for any offence in respect of which he did not pay his penalty he would sentenced to gaol for not less than six months.”
85. O’Dalaigh J. (as he then was) put the matter even more strongly at page 40-41 of the Report
“It is not, however, a feature of civil proceedings that the Plaintiff can have the Defendant detained in jail before the proceedings commence and keep him there unless he can obtain bail. Nor may he obtain a warrant to enter and search the Defendant’s house or shop and seize goods and if obstructed break open any door and force or remove any impediment to such search, entry or seizure. Nor yet is it a feature of civil proceedings that a Plaintiff can put the Defendant in jail because he cannot pay the damages awarded.
The vocabulary of Section 186 of the Act of 1876 is the vocabulary of the Criminal Law; the preliminary detention in jail unless bail be found (Section 197) and the right to enter, search and seize goods in the Defendants’ house or premises (Section 204 and 205) are, as yet, unfamiliar features of civil litigation. In their initiation, conclusion and consequences, proceedings under Section 186 have all the features of a criminal prosecution. Note that parliament in inserting directions in the form of conviction (set out in Schedule C. to the Act and directed by Section 223 of the Act to be used) speaks unequivocally:
I quote:-
‘Where the party has been convicted of an offence punishable by pecuniary penalty and imprisonment in default of payment.’
Finally, the mode of withdrawal of proceedings is the time-honoured formula employed by the Attorney General in criminal charges – nolle prosequi (Section 256). Well might Mr. Justice Murnaghan say, as he did in Gettins’ case ‘the proceedings before the District Justice have all the marks of criminal procedure and are in no way distinguishable from criminal proceedings for which the punishment is a penalty with imprisonment in default of payment’ .
Unless I am to hold that, as in some strange, unreal, ‘Kafka-esque’ world what is, is not, I must come to the conclusion that the offences comprised in Section 186 are ‘criminal charges’ .”
86. Counsel for the Plaintiff in the instant case on a number of occasions used the term “Kafka-esque” to describe proceedings under the 1996 Act and made it clear that he was referring to its use by O’Dalaigh J. in this judgment . Proceedings under the 1996 Act are not, however, entirely comparable to those under the Customs Consolidation Act, 1876 which were dealt with in Melling’s case. It is quite clear from the evidence of both the Garda witnesses that they perceive the procedures under the 1996 Act as being a method of attacking a certain form of criminality. By divesting major criminals of their ill-gotten gains, they hope to reduce their power and influence and to render them more vulnerable to arrest, trial and conviction. The means used in the procedures under the 1996 Act do not, however, have ” all the features of a criminal prosecution” . The action is strictly speaking in action ‘in rem’ rather than ‘in personam’ ; this was stressed by Mr. Clarke in his argument. More importantly, there is no question of the arrest of a Respondent or his remand in custody or on bail and there is no specific penalty of fine or imprisonment. It is true that money or property may be removed from the possession or control of a Respondent, but if this money or property can be shown to the satisfaction of the Court to be the proceeds of crime, its removal could well be viewed in the light of reparation rather than punishment or penalty. Nor is there any question of imprisonment of a Respondent, whereas in Melling’s case the penalty was a fine of three times the value of the contraband goods with imprisonment as an alternative sanction. There are therefore very considerable differences between Melling’s case and the present case, both as regards process and as regards the end result.
87. The indicia of criminal proceedings were again considered by the Supreme Court in Goodman v. Hamilton (No. 1) [1992] 2 I.R. 542. In that case the Applicant argued, inter alia, that the tribunal appointed by the Oireachtas of which the Respondent was the sole member could not validly inquire into allegations of criminal conduct because to do so would infringe the principal of the separation of powers, infringe the constitutional guarantee of fair procedures and fail to vindicate the Applicant’s good name. The Applicant submitted that insofar as the resolution of the Oireachtas directed the tribunal to inquire into allegations of criminal conduct that it was in breach of Article 38 of the Constitution because it was providing for the trial of persons on criminal charges otherwise than in due course of law and without a jury. Both the High Court and the Supreme Court held against the Applicant. In his judgment at page 588 of the Report Finlay C.J. under the heading “alleged breaches of Article 38” stated as follows:-
“The essential ingredient of a trial of a criminal offence in our law, which is indivisible from any other ingredient, is that it is had before a Court or Judge which has got the power to punish in the event of a verdict of guilty. It is of the essence of a trial on a criminal charge or a trial on a criminal offence that the proceedings are accusatorial, involving a prosecutor and an accused, and that the sole purpose and object of the verdict, be it one of acquittal or of conviction, is to form the basis for either a discharge of the accused from the jeopardy in which he stood, in the case of an acquittal, or for his punishment for the crime which he has committed in the case of a conviction.
The proceedings of the inquiry to be held by this tribunal have none of those features. The tribunal has no jurisdiction or authority of any description to impose a penalty or punishment on any person. Its finding, whether rejecting an allegation of criminal activity or accepting the proof of an allegation of criminal activity, can form no basis for either the conviction or acquittal of the party concerned on the criminal charge if one were subsequently brought, nor can it form any basis for the punishment by any other authority of that person.”
88. The question as to whether a statutory procedure was civil or criminal in nature was again considered in O’Keeffe v. Ferris (Supreme Court unreported 19th February, 1997). This action was for a declaration that Section 297 of the Companies Act, 1963 was unconstitutional or alternatively that the manner in which the liquidator of the relevant company sought to invoke Section 297 (1) against the Plaintiff was invalid as it amounted to a trial of a criminal offence without due procedures for such a trial. The judgment of the Supreme Court was delivered by O’Flaherty J. At page 7 of his judgment he stated
“It is submitted on behalf of the Plaintiff that the proceedings in substance and in fact are clearly of a criminal nature, impose criminal sanctions and bear all the hallmarks of criminal charges. Therefore, they are inconsistent with the requirements of a trial in due course of law as enshrined in the provisions of the Constitution: Article 38 (1) of which provides: ‘no person shall be tried on any criminal charge, save in due course of law’. It is submitted that once the substance of Section 279 (1) is examined, there are present all the requirements for the creation of a criminal offence by the Oireachtas. ………
It is said that the gravamen of the conduct identified for sanction by the High Court lies in the intent to defraud. Once it appears that the business of the company is being carried on with such a criminal intent the complete offence is created, attracting all its punitive consequences ………. .
The submissions on the part of the Plaintiff, as elaborated on in oral argument, took the form not so as to allege that the section created a criminal offence but, rather, that here was an ersatz civil proceeding which was really criminal in nature and that it was at least an indirect violation of Article 38 (1) of the Constitution in that it sought to impose a badge of criminality on a person through the Courts exercising their civil jurisdiction. This criminal conduct would be established on the balance of probabilities – which is the standard of proof required in civil proceedings; Banco Ambrosiano SPA v. Ansbacher and Company [1987] I.L.R.M. 669; rather than by proof beyond reasonable doubt which is the standard of proof in a criminal trial. Further, it was submitted that the protection the trial with the jury affords to a person on a criminal charge was not available to such a person once this form of proceeding was invoked.”
89. At page 10 of the judgment under the heading “Decision” the learned O’Flaherty J. goes on to say
“It is clear, in the first instance that the subsection in question does not create a criminal offence. To hold that it did would be to disregard the provisions of both subsection 3 and subsection 4 of Section 297. Further, none of the indicia of a criminal offence identified in Melling’s case are present: there is no prosecutor; there is no offence created; there is no mode of trial of a criminal offence prescribed and there is no criminal sanction imposed. Indeed, the Court did not understand Counsel for the Plaintiff to press this point. Rather, the Plaintiff’s case was put on the basis that the civil proceedings were really a disguise for what was truly an attempt by the Oireachtas to impose a criminal sanction in a civil context. The Court rejects this construction of the section. It holds that the section is clearly within the policy entitlement of the Oireachtas to enact; it is designed to protect creditors and others who may fall victim of people engaged in fraud. It is true that fraud is an ingredient in many criminal offences but is also an ingredient in various civil wrongs: cf. Northern Bank Finance v. Charlton [1979] I.R. 149. It is true that the proof of fraud will be to the civil standard, but it is also so that the more serious an allegation that is made in civil proceedings, then the more astute must the Judge be to find that the allegation in question has been proved.”
90. In the context of the argument made on behalf of the Plaintiff that proceedings under the 1996 Act are essentially criminal rather than civil in nature, stress was also laid on the fact that under Section 7 of the Act where an Interim Order or an Interlocutory Order is in force, the Court may at any time appoint a receiver
“(a) To take possession of any property to which the Order relates, or
(b) In accordance with the Court’s directions to manage, keep possession or dispose of or otherwise deal with any property in respect of which he or she is appointed”
91. Also under Section 4 of the Act the Court, where an Interlocutory Order has been in force for not less than seven years in relation to specified property, may make a Disposal Order directing that the whole or, if appropriate, a specified part of the property be transferred to the Minister for Finance or to such other person as the Court may determine.
92. The Plaintiff claims that such forfeiture proceedings are criminal in nature and therefore the Plaintiff should benefit from the protection provided by Article 38.1 of the Constitution.
93. The Defendants argue that forfeiture proceedings are civil and not criminal in nature. In making this submission they rely on the decision in Attorney General v. Southern Industrial Trust Limited and Simons (1960) 94 I.L.T.R. 161. In that case the High Court and Supreme Court considered the constitutional challenge to the validity of the provisions of Section 5 of the Customs (Temporary Provisions) Act, 1945. That Act permitted the forfeiture of goods shown to have been exported in contravention of provisions of the customs code. The forfeiture procedure operated in the following way. The Attorney General, (upon a challenge to the right to forfeit being made) was compelled to bring to the High Court any information averring that the goods were seized on suspicion of being exported in contravention of such enactments. Upon the Attorney General so averring, it was presumed until the contrary was proved that the goods at the date of seizure had been exported in contravention of those provisions. Clearly, this entailed the Respondent in establishing that no criminal offence had been committed. In those proceedings the Southern Industrial Trust Company had sold a motor vehicle to the second named Defendant Simons by way of hire purchase. The vehicle was subsequently forfeited and the Company brought proceedings challenging the constitutional validity of these provisions. The challenge arose from the proceedings to forfeit the motor vehicle in question. The High Court and the Supreme Court rejected the claim that the proceedings were criminal rather than civil in form. Davitt P. stated (at page 167 of the Report)
“In proving the circumstances which justified the forfeiture it is necessary to establish facts to show that Denis Simons committed a criminal offence. That does not make these proceedings criminal proceedings. They are, in my opinion, civil proceedings brought, in effect, to establish the title of the Revenue Commissioners to the car.”
94. This determination was upheld by the Supreme Court. The case not only establishes that the nature of the proceedings was such that they were civil, but also that this was irrespective of the fact, firstly that the proceedings involved the Court in determining whether a criminal offence was committed and secondly that the onus of disproving that fact was placed upon the person claiming ownership.
95. The Defendants also referred to the judgment in the High Court of Barrington J. in the case of Clancy v. Ireland [1988] I.R. 326. In that case this Court considered the validity, having regard to the provisions of the Constitution, of sections of the Offences Against The State (Amendment) Act, 1985. That Act empowered the Minister for Justice to certify that monies were the property of an unlawful organisation and that those monies stood forfeited to and vested in the Minister. Provision was made for a person claiming to be the owner of monies so paid into the High Court, prior to forfeiture, to apply to that Court for an Order directing that the monies be paid to him. If satisfied that the person was the owner of the monies in question, the Court could make an Order returning the money to him. Monies which the Plaintiff in those proceedings claimed belonged to him were frozen pursuant to 1985 Act. He brought proceedings claiming that the Act was unconstitutional and in particular that it unlawfully interfered with his property rights. His claim was rejected by Barrington J. who held that the limitation upon the Plaintiff’s rights was “a permissible delimitation of property rights in the interests of the common good” (page 336 of the judgment). Barrington J. expressed some concern about the workings of the 1985 Act. At page 331 of his judgment he said:
“Indeed what makes the Act of 1985 open to criticism is not that the funds of an unlawful organisation as defined by the Act of 1939 might be vested in the Minister for Justice, but that the funds of an innocent citizen might be diverted”.
96. However, the learned Judge concluded (at page 334) that
“An Applicant who applies within time can claim the monies in the High Court in proceedings in which the onus of proof will be on him. If he makes out his case he will be entitled to the return of his money together with, in an appropriate case, interest and compensation for any loss……
The Act of 1985 admittedly provides for the freezing of a bank account and the payment of the funds in it into the High Court without notice to the account holder but it does not confiscate his property or deprive him of fair hearing. He is entitled to claim the funds in the High Court and he is entitled to a fair hearing there though, admittedly, the onus of proof is on him to establish his title. In the event of a mistake having been made there is provision for the payment of compensation.
Mr. Condon has submitted that the Act is unnecessary and that, if the Minister’s suspicions are well-founded, he could have applied for an Interim Injunction in the High Court. But, on the other hand, the Act is designed to deal with the activities of unlawful organisations and, in this situation, the onus of proof may be very important. Mr. Fennelly has pointed to the fact that there are times, even in criminal proceedings, where parliament has reversed the onus of proof in relation to particular issues. If, he submits, it is permissible to do it in criminal proceedings a fortiori it must be permissible to do it in civil litigation”.
97. The provisions of the 1985 Act are in some ways considerably more severe than those contained in the 1996 Act. However, this must be seen against the legislative background of The Offences Against The State Act, 1939 and its amendments – legislation which was enacted specifically to combat any organisation which under Section 18 of the 1939 Act
“(a) Engages in, promotes, encourages, or advocates the commission of treason or any activity of a treasonable nature, or
(b) Advocates, encourages, or attempts the procuring by force, violence, or other unconstitutional means of an alteration of the Constitution, or
(c) Raises or maintains or attempts to raise or maintain a military or armed force in contravention of the Constitution or without constitutional authority….” .
98. In his reply, Counsel for the Plaintiff submits that in taking the example of the Southern Industrial Trust case, the Defendants “seductively seek to negate the necessity for a reasoned, principled and qualitative balance”. He submits that it is
“simply preposterous to suggest that the limited and relatively minor provisions of Section 5 of the Customs (Temporary Provisions) Act, 1945 can have a bearing in terms of the magnitude of the implications of The Proceeds of Crime Act, 1996 and that it is a binding authority, case closed” .
99. He argues that there is a massive qualitative difference in terms of the operations of the two provisions. He also submits in regard to Clancy v. Ireland that “this is a brief and ill-considered judgment which is not in any way directly applicable to the draconian provisions of The Proceeds of Crime Act, 1996” . He highlights, correctly, as I have said above that the Clancy case must be considered in the context of public order and emergency powers legislation and that this is important in any balancing exercise.
100. With all due respect to the arguments put forward by Counsel for the Plaintiff, it is clear that the judgment of the Supreme Court in the Southern Industrial Trust case is binding on this Court, and that it undoubtedly establishes that legislation providing for forfeiture is not necessarily criminal in nature. I accept, as I have already stated, that there must be a balancing exercise as to the proportionality of the legislative response to the factual situation. Again, it appears to me that this was precisely the exercise that was undertaken by the learned Barrington J. in Clancy’s case and I have no difficulty in regarding this judgment as persuasive authority.
101. From consideration of the authorities to which I have been referred, it seems to me that I must accept that firstly, forfeiture proceedings are civil and not criminal in nature; and secondly, that there is no constitutional bar on the determination in civil or other proceedings of matters which may constitute elements of criminal offences. It also appears that the procedures set out under The Proceeds of Crime Act, 1996 are not criminal in nature, bearing in mind the indicia set out in Melling’s case. The standard of proof in procedures under the 1996 Act may permissibly, therefore, be the balance of probabilities. Accordingly in this context the protections afforded by Article 38.1 of the Constitution are not applicable.
102. The next issue raised by the Plaintiff in his challenge to the 1996 Act is the question of the reversal of the onus of proof. The Plaintiff complains that by requiring the Plaintiff to establish that the property frozen pursuant to Sections 2 and 3 was not the proceeds of crime, there has been a breach of Article 38.1 of the Constitution in that the burden of proof has been shifted to him. He submits that the Act requires him to prove that “he is not a criminal” and that this requirement is also in breach of Article 40.3 of the Constitution. Article 40.3 insofar as it is relevant provides as follows
“3.1. The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
3.2 The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen”.
103. When considering the question of burden of proof under the 1996 Act. It must be remembered that under Section 2 of the Act it is necessary before any Order can be made pursuant to either Section 2 or Section 3 for the State to establish to the satisfaction of the Court on the balance of probabilities that the Respondent is in possession or control of assets which comprise directly or indirectly the proceeds of crime. It is only when that initial evidential burden has been discharged by the State that any obligation is imposed upon a person to furnish any evidence to the Court.
104. Secondly, a Respondent is free to challenge or discredit any evidence adduced by the State pursuant to the provisions of the Act. This can be achieved in a number of ways. A Respondent is free to cross-examine the deponent of any Affidavit used to ground an application and thereby undermine the proofs adduced by the State. Alternatively, a Respondent may introduce independent “real” or Third Party evidence which would indicate that the facts set out in the State’s case are wrong. Alternatively a Respondent is free to adduce evidence in the form of oral or Affidavit evidence of his or her own indicating that the evidence relied upon by the State is incorrect or unreliable.
105. These elements of the Act were recognised by the learned Moriarty J. in his decision in the case of M. v. D. (unreported) 10th December, 1996 in which he specifically considered the procedures operated under the Proceeds of Crime Act, 1996. At page 2 of his judgment he stated
“The Act, whilst understandably silent on the nature of proof sufficient to induce the Court to exercise its discretion in any particular case, unquestionably imposes an initial onus of proof on an Applicant, and provides by Section 8 thereof for trial of issues either by Affidavit or oral evidence, and that the standard of proof sufficient to determine any such issue or issues shall be that applicable to civil proceedings. To obtain an ex-parte Order such as was granted in the present case pursuant to Section 2, it must be shown to the satisfaction of the Court that a person is in possession or control of specified property that directly or indirectly constitutes proceeds of crime, or was partly or wholly acquired with or in connection with property that directly or indirectly constitutes proceeds of crime, such impugned property being not less that £10,000 ……
I am not concerned with construing the Act as a whole, but it is noteworthy that, whilst its scheme indeed introduces significant innovations, a wide discretion is entrusted to the Court to ensure compliance with the ‘audi alteram partem’ rule and other precepts of natural justice and to ensure that injustice is not perpetrated against meritorious Respondents, for example by the compensation provisions comprised in Section 16 of the Act.”
106. I have already considered and rejected the Plaintiff’s argument that proceedings under the 1996 Act are criminal rather than civil in nature. Once it is accepted that proceedings are in fact civil there is no constitutional infirmity in a procedure whereby the onus is placed on a person seeking property to negative the inference from evidence adduced that a criminal offence has been committed. This is clearly expressed in both the Southern Industrial Trust case and Clancy’s case referred to above. Even in criminal cases the State in certain circumstances is entitled to require a Defendant to rebut an inference of criminal conduct. In the case of Hardy v. Ireland [1994] 2 I.R. 550 the Supreme Court considered a challenge to the constitutionality of Section 4 (1) of the Explosive Substances Act, 1883. This section stipulates that if a person knowingly has in his possession an explosive substance under such circumstances as to give rise to a reasonable suspicion that he does not have it in his possession for a lawful object, he shall be guilty of a felony unless he can show that he in fact had the substance in his possession for a lawful object. The Applicant contended that the imposition of an obligation on the Accused to show that he had the substance in his possession for a lawful object was inconsistent with the presumption of innocence provided for in the Constitution. The Supreme Court rejected that challenge.
107. At page 564 of the Report the learned Hederman J. in analysing the section of the Explosive Substances Act, 1883 stated
“In my judgment, in a trial alleging an offence under the section, the prosecution has to prove beyond reasonable doubt (I take the basic ingredients contained in this section and I leave aside alternate wording):-
(1) That the Accused knowingly had in his possession a substance which it proves is an explosive substance;
(2) That he had it under such circumstances as to give rise to a reasonable suspicion that he did not have it in his possession for a lawful object and that, in turn, means that there is an onus on the prosecution to prove that the Accused could not show that he had it in his possession for a lawful object.
Once those ingredients are in place, it is still open to the Accused to demonstrate in any one of a number of ways, such as by cross-examination, submissions or by giving evidence, that a prima facie situation pointing to his guilt should not be allowed to prevail. I believe that this analysis complies with our well-established criminal law jurisprudence in regard to having trials in due course of law. That constitutional requirement applies whether the offence is made an offence under a pre or post constitutional enactment. It protects the presumption of innocence; it requires that the prosecution should prove its case beyond all reasonable doubt; but it does not prohibit that, in the course of the case, once certain facts are established, inferences may not be drawn from those facts and I include in that the entitlement to do this by way even of documentary evidence.”
108. Concurring with the judgment of Hederman J. the learned Egan J. said (at page 566)
“The conclusion which I have reached to the effect that the onus of proof can shift does not determine the matter. There is nothing in the Constitution to prohibit absolutely the shifting of an onus in a criminal prosecution or to suggest that such would inevitably offend the requirement of due process”.
109. A similar question arose in the case of O’Leary v. Ireland [1995] l I.R. 254. There the question before the Supreme Court was whether the provisions of Section 24 of The Offences Against the State Act, 1939 were invalid having regard to the provisions of Article 38.1 of the Constitution. Section 24 provides that on the trial of a person charged with the offence of being a member of an unlawful organisation, if it is proved to the satisfaction of the Court that an incriminating document relating to the organisation was found on such person or in his possession, that shall, without more, be evidence until the contrary is proved that the person was a member of the organisation alleged at the time. Again it was claimed that the imposition of an obligation on a Defendant in a criminal trial to adduce evidence of the nature in issue in this section was a violation of the presumption of innocence.
110. Again the Supreme Court rejected this challenge. At page 265 of the Report the learned O’Flaherty J. stated
“It is clear that such possession is to amount to evidence only; it is not to be take as proof and so the probative value of the possession of such a document might be shaken in many ways; by cross-examination; by pointing to the mental capacity of the accused or the circumstances by which he came to be in possession of the document, to give some examples. The important thing to note about the Section is that there is no mention of the burden of proof changing, much less that the presumption of innocence is to be set to one side at any stage.”
111. In the High Court in the same case the learned Costello J. (as he then was) as reported in [1993]1IR 102 at 110 stated:-
“The Constitution should not be construed as absolutely prohibiting the Oireachtas from restricting the exercise of the right to the presumption of innocence. The right is to be implied from Article 38, which provides that trials are to be held ‘in accordance with law’, and it seems to me that the Oireachtas is permitted in certain circumstances to restrict the exercise of the right because it is not to be regarded as an absolute right whose his enjoyment can never be abridged.”
112. The decisions in Hardy’s case and O’Leary’s case were, of course, given in the context of what was clearly a criminal trial. In civil proceedings the creation of presumptions and the shifting of the onus of proof is much more frequent and is clearly permissible. A commonplace example, and one which has some features in common with the interim and interlocutory procedures set out in the 1996 Act, is the operation of Section 37 of the Family Law (Divorce) Act, 1996 (which reflects the form of the provisions of Section 29 of the Judicial Separation and Family Law Reform Act, 1989). Section 37 provides for the situation where a spouse either has disposed of or proposes to dispose of assets with the intention of defeating the other spouse’s possible claim for financial relief. It permits the Court either to prevent such disposal or to set aside such a disposal if already made. The Court has power, on an application made ex-parte, to freeze a spouse’s assets in order to prevent a possible disposal.
Section 37(4) provides:-
“Where an application is made under sub-section (2) with respect to a disposition that took place less than three years before the date of the application (for divorce) or with respect to a disposition or other dealing with property that the other spouse concerned or any other person proposes to make and the court is satisfied:
(a) in case the application is for an Order under sub-section (2)(a)(i), that the disposition or other dealing concerned would (apart from this Section) have the consequence, or
(b) in case the application is for an Order under paragraph (a)(ii) or (b) of sub-section (2), that the disposition has had the consequence,
of defeating the Applicant’s claim for relief, it shall be presumed, unless the contrary is shown, that the other spouse or other person disposed of or otherwise dealt with the property concerned, or, as the case may be, proposes to do so, with the intention of defeating the Applicant’s claim for relief .”
the onus of proof is clearly laid on the Respondent to demonstrate that he or she did not act with the intention of defeating the other spouse’s claim for relief.
113. The corresponding provision under Section 29 of the Judicial Separation and Family Law Reform Act, 1989 has been frequently and widely used, in particular in the form of Freezing Orders made on an ex-parte basis, and there is no reason to believe that this will not continue under the new legislation. There are many other examples of similar presumptions which may fall to be rebutted in civil proceedings. The procedure provided for by Sections 2 and 3 of the 1996 Act is very similar in many respects to the familiar power of the Courts in other civil proceedings to grant on an ex-parte basis interim Freezing Orders, followed by interlocutory hearings on affidavit and subsequently final adjudications as to respective legal rights and liabilities in regard to property. It can often happen that such freezing Orders are sought in circumstances where the allegations made against Defendants involve fraud or other conduct which would be in breach of the criminal law. It has never been seriously suggested that such procedures are unconstitutional.
114. It seems to me therefore that the Plaintiff’s argument with regard to the burden of proof cannot be sustained.
115. The Plaintiff next challenged the Act on the basis that it infringed the privilege against self-incrimination or the right to silence. The Plaintiff argues that the structure of the Act forces him to give evidence in regard to the property affected by Orders under Section 2 and Section 3 and that this evidence could be self-incriminating.
116. Somewhat surprisingly in my view, the Plaintiff does not specifically challenge Section 9 of the Act, other than by way of his challenge to the Act as a whole.
Section 9 provides:-
“9 At any time during proceedings under Section 2 or 3 or while an Interim Order or an Interlocutory Order is in force, the Court or, as appropriate, in the case of an appeal in such proceedings, the Supreme Court may by Order direct a Respondent to file an Affidavit in the Central Office of the High Courts specifying –
(a) the property of which the Respondent is in possession or control, or
(b) the income, and the sources of the income, of the Respondent during such period (not exceeding ten years) ending on the date of the application for the Order as the Court concerned may specify,
or both.”
117. In dealing with the general argument made by the Plaintiff in regard to the privilege against self-incrimination the Defendants submit that a Respondent to proceedings under the Act is not in any way forced to give evidence which could be self-incriminating. He has an option. He can give evidence freely and seek to realise his assets, or he can decline to say anything that might incriminate him, or he can give evidence omitting any particulars that might incriminate him. Furthermore, even though an obligation is imposed upon a Respondent to displace the evidence which has been adduced by the Applicant in proceedings under the Act there is no obligation per se on the Respondent himself to give any evidence. He can seek to displace the evidence that has been tendered by the Applicant by means of cross-examination, or by means of third party evidence, or by means of independent “real” evidence. The Defendants argue that there is no obligation necessarily imposed by the Act for the Respondent to say anything or to give evidence himself.
118. The Defendants’ argument here seems me to tend towards a sophisticated version of the “the innocent have nothing to fear”, which I would not accept as being sufficient in itself to offset a threat to the privilege against self-incrimination. There have been sufficient miscarriages of justice in the history of crime in this and in other jurisdictions to indicate that a belief that “the innocent have nothing to fear” is not necessarily the whole answer. The Defendants’ argument also rather blithely passes by the fact that a failure to give evidence by the Respondent will in all probability result in the disposal of the Respondent’s assets.
119. The provisions of Section 9 do not offer the Respondent the same type of choice. Here the Court may direct the swearing of an affidavit, and presumably a refusal or failure to do so would amount to contempt. It was with this aspect of the proceedings under the Act that Moriarty J. was specifically dealing in M -v- D (Supra). It is clear that the provisions of Section 9 caused him some concern, and in this I would concur with him. In considering the making of an Order under Section 9, the learned judge surveyed a number of authorities as follows:-
“Reference was also made to the case of In Re O [1991] 2 QB 520. In that case an Order restraining assets under Section 77 of the Criminal Justice Act, 1988 was in place against the Applicants. When the Applicants sought to vary the Order, the Crown Prosecution Service obtained a further Order requiring them to disclose their assets by affidavit. The Applicants sought to appeal on the ground that the Court had no jurisdiction to make such an Order, which in any event was repugnant to the rule against self-incrimination. The Court held that in the absence of any express jurisdiction there was an ancillary power to make a disclosure Order inherent in the 1988 Act to ensure the effectiveness of the Restraint Order. However, since the Act did not abrogate the common law rule against self-incrimination, a party might decline to comply with the disclosure Order if there was a risk of self-incrimination, and since the use of such information should be limited to the purpose for which the Disclosure was ordered, a condition should be attached to such Orders, preventing the use by the Crown Prosecution Service of any material so disclosed in criminal proceedings against the party giving disclosure or his spouse.
In Istel Limited -v- Tully [1993] AC 45 an Ex Parte Order was granted in civil fraud proceedings requiring the Defendant to disclose information relating to dealings with certain assets and to produce copies of documents in respect of such dealings. The Order was subsequently set aside insofar as it related to such disclosure on the ground that it infringed the Defendants’ privilege against self-incrimination. The case was appealed to the House of Lords. The House of Lords held that although the privilege against self-incrimination could only be removed or altered by Parliament, there was no reason to allow the Defendants in civil proceedings to rely on it, where their protection was adequately secured by other means. It was further noted that in In Re O the Crown Prosecution Service was a party to the proceedings and consented to the Order. Here, the Crown Prosecution Service was not a party and hence it could be argued that the Order was not capable of binding it. It is clear from a letter received from the Crown Prosecution Service that that agency had undertaken not to profit from any disclosure in the current proceedings and would only rely on evidence obtained independently of the proceedings. It appears that in the absence of such an undertaking, the House of Lords would not have made the Order, given the possible prejudice which could occur in future criminal proceedings.
Applying this judgment to the present case, I am satisfied that, noting the degree of nexus between the Applicant and the Office of the Director of Public Prosecutions, it will be necessary if discovery is ordered that an undertaking be given by the Director of Public Prosecutions similar to that given by the Crown Prosecutions Service in Istel Limited -v- Tully , in order to prevent possible prejudice in any future criminal proceedings…..I have also been referred to and considered the case of Ray Thomas (Disclosure Order) [1992] 4 ALL ER 814, in which I am disinclined to follow the view of Leggett L.J. that disclosure of assets did not amount to self-incrimination, but merely facilitated an assessment of the amount to be recovered from a Defendant who had benefited from drug trafficking.”
120. The Defendants on this aspect of the Act rely on the judgment of the Supreme Court in Heaney -v- Ireland [1996] 1 IR 580. In that case the Court was faced with the challenge to the provisions of Section 52 of the Offences Against the State Act, 1939, pursuant to which a person detained in custody under Part IV of that Act can be required to provide a full account of his movements and actions during a specified period. As set out in the head note the Supreme Court held as follows:-
“1. The right to silence was a corollary to the qualified right to freedom of expression conferred by Article 40 Section 6 sub-section 1(1) of the Constitution.
2. That the instant case was concerned with an encroachment against the right not to have to say anything that might afford evidence that was self-incriminating rather than the absolute entitlement to silence.
3. That there were many examples of a legislative intent to abrogate, to varying extents, the right to silence in a myriad of different circumstances
4. That the common law right to silence dated from a time when an accused was not competent to give evidence in his defence in a criminal trial, and could not prevail over a statutory provision which was constitutionally valid.
5. That the State was entitled to encroach on the right of the citizen to remain silent in pursuit of its entitlement to maintain public peace and order, although the right must be affected as little as possible.
6. That the matter for resolution on the appeal was whether the power conferred on the Garda Siochana by Section 52 sub-section 1 was proportionate to the objects to be achieved by the Act of 1939.
7. That the prima facie entitlement of an innocent person to refuse, as a matter of principle, to give an account of his movements must yield to the right of the State to protect itself; a fortiori the entitlement of those with something relevant to disclose concerning the commission of a crime to remain mute must be regarded as a lesser order; and that accordingly there was a proper proportionality in Section 52 between any infringement of the citizen’s rights and the entitlement of the State to protect itself.”
121. The judgment of the Court was given by the learned O’Flaherty J. At page 590 of the report O’Flaherty J. states:-
“…the State is entitled to encroach on the right of the citizen to remain silent in pursuit of its entitlement to maintain public peace and order. Of course, in this pursuit the constitutional rights of the citizen must be affected as little as possible. As already stated, the innocent person has nothing to fear from giving an account of his or her movements, even though on grounds of principle, or on the assertion of constitutional rights, such a person may wish to take a stand. However, the Court holds that the prima facie entitlement of citizens to take such a stand must yield to the right of the State to protect itself. A fortiori, the entitlement of those with something relevant to disclose concerning the commission of a crime to remain mute must be regarded as of a lesser order.”
122. It is clear from Heaney’s case that the privilege against self-incrimination, or the right to silence, is by no means absolute. This decision is, of course, binding on me. It is certainly arguable that any encroachment on that privilege contained in Sections 2, 3 and 9 of the 1996 Act is in pursuit of the State’s entitlement “to maintain public peace and order”. However, this is qualified by the caveat that “the constitutional rights of the citizen must be affected as little as possible”. In order to minimise any encroachment on the citizen’s rights and in order to operate the procedures under the Act in a way which in accordance with constitutional justice, it seems to me that the Court would need to take particular care in deciding whether to make an Order under Section 9 requiring disclosure. This is especially so when one bears in mind the wide scope of the discovery which may be ordered. I note that even in the M -v- D case, where the primary evidence presented by the Applicant was full and convincing, the learned judge required an undertaking to be given by the D.P.P. not to profit from any disclosure which might take place in those proceedings in a future prosecution of the Respondent. Moriarty J. referred to “the degree of nexus between the Applicant and the office of the D.P.P.”. The evidence given in the instant case shows an even clearer nexus than Moriarty J. might have envisaged between the personnel of the Criminal Assets Bureau and the criminal investigation section of the Garda Siochana. It appears to me that the type of undertaking sought by Moriarty J. in the M -v- D case would be essential in virtually every case where an Order under Section 9 is granted. Even then there may well be difficulty in operating such an undertaking in a secure and watertight manner.
123. The Plaintiff also challenges the provisions of Section 6 of the 1996 Act insofar as it refers to the discretion of the Court to provide funds for legal representation. Section 6, insofar as it is relevant, provides as follows:-
“6(1) At any time while an Interim Order or an Interlocutory Order is in force, the Court may, on application to it in that behalf by the Respondent or any other person affected by the Order, make such Orders as it considers appropriate in relation to any of the property concerned if it considers it essential to do so for the purpose of enabling –
(a) the respondent to discharge the reasonable living and other necessary expenses (including legal expenses in or in relation to proceedings under this Act) incurred or to be incurred by or in respect of the Respondent and his or her dependants.”
124. Counsel for the Plaintiff submits that by providing the Court with a discretion as to whether to make payments to provide for legal expenses the Section encroaches on the Plaintiff’s constitutional right of access to the Court and right to legal aid.
125. It is well established that the Plaintiff has a constitutional right of access to the Courts; see, for example, MacAuley -v- Minister for Post and Telegraphs [1966] IR 345 and indeed the Plaintiff also has a right to be assisted in obtaining legal representation in Court in proper circumstances; see, for example, State (Healy) -v- Donoghue [1976] IR 325. However I cannot accept that the vesting of discretion in the Court under Section 6(1)(a) encroaches upon these rights. Even in criminal proceedings, where the liberty of the accused is at stake, it is not suggested that every accused is automatically entitled to legal aid. In State (Healy) -v- Donoghue at page 350 O’Higgins C.J. stated:-
Where a man’s liberty is at stake, or where he faces a very severe penalty which may affect his welfare or his livelihood, justice may require more than the application of normal and fair procedures in relation to his trial. Facing, as he does, the power of the State which is his accuser, the person charged may be unable to defend himself adequately because of ignorance, lack of education, youth or other incapacity. In such circumstances his plight may require, if justice is to be done, that he should have legal assistance. In such circumstances if he cannot provide such assistance by reason of lack of means, does justice under the Constitution also require that he be aided in his defence? In my view it does….”
126. The clear import of this dictum is that legal aid must be provided where there is lack of means in addition to other incapacity such as ignorance or lack of education. Neither the criminal legal aid system nor the civil legal aid system provide legal aid for every applicant. In the case of the criminal legal aid system the court, and in the case of the civil legal aid system the Civil Legal Aid Board, operate discretionary means tests and other forms of discretion in order to decide whether legal aid should be granted to an applicant. Under the criminal justice (legal aid) Act, 1962, entitlement to legal aid is conditioned upon it appearing to the relevant court that the Accused’s means are insufficient and that the gravity of the charge or “exceptional circumstances” make legal aid essential in the interests of justice. In civil cases legal aid is provided through the civil legal aid board which was set up in 1979 and became a statutory body under the Civil Legal Aid Act, 1995. In the scheme operated by the Board through its Law Centres there is firstly a qualifying means test and secondly a number of other areas where the Board has discretion to grant or withhold a legal aid certificate. As a State Body, the Board must, of course, operate the scheme in accordance with fair procedures and the constitutional rights of the Applicant.
127. It seems to me that Section 6(1)(a) envisages a parallel system, where the court has a discretion to release monies to provide for legal representation of a Respondent. It must be presumed that the Court will use this discretion in a constitutional way and that persons will not wrongfully be deprived of legal representation.
128. The next matter raised by the Plaintiff is in regard to the Plaintiff’s right to private property. The Plaintiff submits that in enacting the Proceeds of Crime Act, 1996 the State has failed to protect his property rights from unjust attack and refers to Article 40.3.2 and 43 of the Constitution. Article 40.3.2 has been quoted above. Articles 43 provides as follows:-
“43.1.1. The state acknowledges that man, in virtue of his rational being, has the natural right, antecedent of positive law to the private ownership of external goods.
1.2. The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, inherit property.
43.2.1 he State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this article ought, in civil society, to be regulated by the principles of social justice.
43.2.2 The State, accordingly, may as the occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
129. Counsel for the Plaintiff argues that the essence of contemporary case law is captured in Kelly and Hogan “The Irish Constitution” (Third Edition) at page 1076 as follows:-
“A restriction on an individual’s property rights which is unjust will not be regarded as consistent with social justice nor warranted by the requirements of the common good.”
130. Counsel for the Plaintiff submits that concepts of social justice or the common good do not warrant an expropriation of private property on the basis that it is tainted by criminality without the related proof of a criminal offence or at least a charge.
131. Counsel for the Defendants submit that if the Plaintiff was in possession or control over assets which directly or indirectly constitute the proceeds of crime he has no property rights in those assets and no title to them, whether protected by the Constitution or by any other law. Both Counsel for the Plaintiff and Counsel for the Defendants referred to Cox -v- Ireland [1992] 2 IR 503. That case arose from the provisions of Section 34 of the Offences against the State Act, 1939 which provided, inter alia, that when a person is convicted by a special criminal court of an offence set out in the schedule to that Act, and that person holds at the time of such conviction an office or employment remunerated out of the central fund or monies provided by the Oireachtas or raised by local taxation then that person shall immediately upon conviction forfeit that office or employment, and shall be disqualified from holding any like office or employment for a period of seven years subsequent to the date of the conviction. The Plaintiff in that case had been employed as a teacher in a community school and was convicted by the Special Criminal Court of a scheduled offence and sentenced to two years imprisonment. On his release from prison he was advised by the Department of Education that the provisions of Section 34 of the 1939 Act applied to his case and he was ineligible for re-employment at the school, or at any school funded by the State, for seven years from the date of his conviction; his pension was forfeited and his right to pay related social insurance benefit was lost.
132. It was held by the Supreme Court that the provisions of Section 34 of the 1939 Act could potentially constitute an attack upon the unenumerated personal right to earn a livelihood of any person to whom those provisions applied and upon the constitutionally protected property rights of such person. However it was also held that the State was entitled by its laws to impose onerous and far reaching penalties and forfeitures in respect of offences threatening public peace and order and the maintenance and stability of the authority of the State, as well as to ensure that persons who committed such offences were, as far as practicable, excluded from any involvement in the carrying out of the functions of the State. However the provisions of Section 34 were impermissibly wide and indiscriminate and therefore failed to protect as far as practicable the constitutional rights of the citizen, notwithstanding the fundamental State interests which Section 34 of the Act of 1939 sought to protect.
133. It appears to me that it was the wide and indiscriminate nature of the penalties provided under Section 34 of the Offences Against the State Act , 1939 which rendered the Section unconstitutional. The property rights which it attacked had in many cases little or nothing to do with the actual offences committed by those who were affected by it. It is true that the Proceeds of Crime Act, 1996 provide “onerous and far reaching penalties and forfeitures” but these are directly connected with the establishment to the satisfaction of the court that the property involved is in fact directly or indirectly the proceeds of crime. In the case of Clancy -v- Ireland (Supra) – a somewhat more parallel situation – even more draconian forfeiture of property was held to be constitutionally justified in the interests of the protection of the State and of the common good.
134. It appears to me that the State has a legitimate interest in the forfeiture of the proceeds of crime. The structure of the Act, in a similar way to ordinary civil injunction proceedings, allows for the temporary freezing of assets and for various actions to be taken on an interlocutory basis. The Respondent at any time may intervene to show good title to the assets. If he does so not only must they be returned, but the Court may order the State to pay compensation to him. It is also provided at Section 3 that the Court shall not make an Interlocutory Order “if it is satisfied that there would be a serious risk of injustice”. The same provision applies to the making of a disposal order under Section 4.
135. While the provisions of the Act may, indeed, affect the property rights of a Respondent it does not appear to this Court that they constitute an “unjust attack” under Section 40.3.2, given the fact that the State must in the first place show to the satisfaction of the Court that the property in question is the proceeds of crime and that thus, prima facie, the Respondent has no good title to it, and also given the balancing provisions built into Sections 3 and 4 as set out above.
136. This Court would also accept that the exigencies of the common good would certainly include measures designed to prevent the accumulation and use of assets which directly or indirectly derive from criminal activities. The right to private ownership cannot hold a place so high in the hierarchy of rights that it protects the position of assets illegally acquired and held.
137. Finally, the Plaintiff claims that the 1996 Act is retrospective in its effect and is therefore in breach of Article 15.5 of the Constitution.
138. Article 15.5 provides:-
“The Oireachtas shall not declare Acts to be infringements of the law which were not so at the time of the date of their commission.”
139. The definition of “proceeds of crime” in Section 1(1) of the 1996 Act provides that “proceeds of crime” means any property obtained or received at any time (whether before or after the passing of this Act) by or as a result of or in connection with the commission of an offence.
140. The Oireachtas has not, by this definition, declared any act to be an infringement of the law which was not so at the time of its commission. The acquisition of assets which derive from crime was not a legal activity before the passing of the 1996 Act and did not become an illegal activity because of the 1996 Act.
141. In any case, the provisions of the Act do not affect property which was held, but is no longer held, by a Respondent. Sections 2, 3 and 4 refer to property which is, at the time of the making of Orders under those Sections, in the possession of the Respondent. The Plaintiff in the instant case is clearly well aware of this aspect of the Act, since in his Statement of Claim he takes care to assert that, prior to the coming into force of the Act, he had transferred considerable assets into the ownership of his wife.
142. The provisions of the Act of 1996 are not rendered impermissible under Article 15.5 by the wording of the definition of the proceeds of crime contained in Section 1(1) of the Act.
PROPORTIONALITY
143. I turn now to the general question of proportionality. Is the Act as a whole, within the framework of the Constitution, a proportionate response by the legislature to the threat to society posed by the operations of the type of major criminals described in the evidence before this Court?
144. In earlier parts of this judgment I have referred to a number of judgments of the Supreme Court and of this Court which accept the principle that rights, even constitutional rights, are not absolute, but may be restricted where required by the common good or the need to protect society.
145. This principle was set out by the learned Kenny J. over thirty years ago in the landmark case of Ryan -v- Attorney General [1965] IR 294 at 312 to 313 in the following terms:-
“None of the personal rights of the citizen are unlimited: their exercise may be regulated by the Oireachtas and the common good requires this. When dealing with controversial, social, economical and medical matters on which it’s notorious views change from generation to generation, the Oireachtas has to reconcile the exercise of personal rights with the claims of the common good and its decision on the reconciliation should prevail unless it was oppressive to all or some of the citizens or unless there is no reasonable proportion between the benefit which the legislation will confer on the citizens or a substantial body of them and the interference with the personal rights of the citizens. Moreover, the presumption that every Act of the Oireachtas is constitutional until the contrary is clearly established applies with particular force to this type of legislation.”
146. The same principle was referred to by Finlay C.J. in Cox -v- Ireland [1992]
2 IR 503 at 522 to 523 as follows:-
“The Court is satisfied that that the State is entitled, for the protection of public peace and order, and for the maintenance and stability of its own authority, by its laws to provide onerous and far reaching penalties and forfeitures imposed as a major deterrent to the commission of crimes threatening such peace and order and State authority, and it is also entitled to ensure as far as practicable that amongst those involved in the carrying out of the functions of the State, there is not included persons who commit such crimes. The State must in its laws, as far as practicable, in pursuing these objectives, continue to protect the constitutional rights of the citizen.”
147. The judgment of Costello J. (as he then was) in the High Court in Heaney and McGuinness -v- Ireland [1994] 3 IR 593 set out authoritatively the test of proportionality. In that case the question before the Court was whether the impairment of the right to the privilege against self-incrimination entailed by Section 52 of the Offences Against the State Act was valid having regard to the provisions of the Constitution. In upholding the validity of the provision, Costello J. said as follows (at page 607):-
“In considering whether a restriction on the exercise of rights is permitted by the Constitution, the courts in this country and elsewhere have found it helpful to apply the test of proportionality, a test which contains the notions of minimal restraint on the exercise of protected rights, and of the exigencies of the common good in a democratic society. This is a test frequently adopted by the European Court of Human Rights (see for example Kearns Newspapers Limited -v- United Kingdom (1979 2 EHRR 245) and has recently been formulated by the Supreme Court in Canada in the following terms. The objective of the impugned provision must be of sufficient importance to warrant overriding a constitutionally protected right. It must relate to concerns pressing and substantial in a free and democratic society. The means chosen must pass a proportionality test. They must:-
(a) be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations;
(b) impair the right as little as possible, and
(c) be such that their effects on rights are proportional to the objective;
Chaulk -v- R [1990] 3 SCR 1303 at pages 1335 and 1336.”
148. Counsel for the Plaintiff submits that this test of proportionality and minimal impairment is “the nub of the matter” or “the heart of the matter” and in this he is quite correct.
149. Many of the judgments referred to earlier, and relied on by the Defendants, apply the test of proportionality to the situation where the State is threatened by the operations of politically motivated illegal organisations committed to the use of armed force in pursuit of their objectives. Such organisations pose an obvious danger to society, to public order and to the ordinary operation of the State. Thus, the majority of the judgments on which the Defendants rely arise from challenges to various aspects of the Offences Against the State Act, 1939, as amended from time to time.
150. The question before the Court in the instant case is whether the operations of the new type of major criminals described by the two Gárda witnesses pose a sufficient threat to the community at large or the “common good” to justify the restriction or impairment of rights which is contained in the Proceeds of Crime Act, 1996.
151. In his judgment in M -v- D (Supra) the learned Moriarty J., who has both wide and deep knowledge and experience of the operations of the criminal justice system, states (at page 3):-
“It seems to me that I am clearly entitled to take notice of the international phenomenon, far from peculiar to Ireland, that significant numbers of persons who engage as principals in lucrative professional crime, particularly that referrable to the illicit supply of controlled drugs, are alert and effectively able to insulate themselves against the risk of successful criminal prosecution through deployment of intermediaries, and that the Act is designed to enable the lower probative requirements of civil law to be utilised in appropriate cases, not to achieve penal sanctions, but to effectively deprive such persons of such illicit financial fruits of their labours as can be shown to be the proceeds of crime.”
152. In the present case I can go beyond “taking notice”, since the Court has before it the evidence of two very senior police officers who have many years of experience of criminal investigation work. Both of them, as earlier outlined, paint a picture of an entirely new type of professional criminal who organises, rather than commits, crime and who thereby renders himself virtually immune to the ordinary procedures of criminal investigation and prosecution. Such persons are able to operate a reign of terror so as effectively to prevent the passing on of information to the Gardaí. At the same time their obvious wealth and power causes them to be respected by lesser criminals or would be criminals.
153. It emerged during the cross-examination of these witnesses by Counsel for the Plaintiff that the number of such leading criminals is small by international standards and that the sums of money involved in their operations are very much smaller than similar sums in such jurisdictions as the United Kingdom, Holland and the United States. I would accept that certain elements of the media, both written and broadcast, tend to exaggerate the comparative level of this and other types of crime in this country and to create in regard to crime an undesirable form of hysteria which has its own dangers. Nevertheless, in the context of a relatively small community, the operations carried out by major criminals have a serious and worsening effect. This is particularly so in regard to their importation and distribution of illegal drugs, which in its turn leads to a striking increase in lesser crimes carried out by addicts seeking to finance their addiction.
154. In theory this type of threat to public order and the community at large may seem less serious than the threat posed to this State by the operation of politically motivated illegal organisations. In practice major and minor drug-related crime is probably perceived by ordinary members of the community as more threatening and more likely to effect the every day lives of themselves and their children.
155. In his recent book “Criminal Chaos – Seven Crises in Irish Criminal Justice”.
156. Mr. Paul O’Mahony, formerly a research psychologist with the Department of Justice, refers to the effect of the distribution of illegal drugs as follows (at Page 204-5):-
“Drug abuse has single-handedly transformed the Irish criminal scene and caused a significant escalation in the level of criminal violence in two distinct ways. First, drug dealing quickly graduates to the point where it depends on intimidation and coercion to control territories, enforce debt payments, and ensure loyalty. The rapid growth of the illegal drugs trade has therefore been accompanied by a proportionate growth in the opportunities for and occasions of serious violence. Secondly, the addictive process undermines the individual addicts sense of values. The addict in the grip of opiate addiction can be so desperate and focused on his own need for a fix that he becomes entirely reckless about the harm he inflicts on others in order to satisfy that need. This process is so powerful that it can degrade even well socialised and normally sensitive individuals and prompt them to depraved and gratuitously brutal acts.
The resort to violence and intimidation within drug dealing circles also has unfortunate knock on effects throughout the criminal world. The drugs sub-culture has escalated the violence of the ordinary criminal world by demonstrating the effectiveness and potential rewards of intimidation. The use of extreme violence to settle drug dealing disputes also sets an example which other criminals and their associates find it difficult not to follow. The threat of assassination promotes assassination because criminals will be tempted to make pre-emptive strikes. Once extreme violence is used it is difficult to turn back to less severe measures.”
157. It should be noted that this picture is painted by an author who is well known as opposing media exaggeration of the level of crime in this country.
158. Taking this context as a whole, it appears to me that as a matter of proportionality the legislature is justified in enacting the proceeds of crime Act, 1996 and in restricting certain rights through the operation of the Act. The restriction or impairment of these rights is to some extent balanced by the various safeguards included in the Act. As was said by Moriarty J. of the Act in M -v- D (at page 3):-
“…. whilst its scheme indeed introduces significant innovations, a wide discretion is entrusted to the Court to ensure compliance with the ‘audi alteram partem’ ‘ rule and other precepts of natural justice and to ensure that injustice is not perpetrated against meritorious Respondents, for example, by the compensation provisions comprised in Section 16 of the Act.”
159. Nevertheless, it is also essential that any rights of persons affected by the Act be impaired as little as possible. I would express a degree of concern about two particular features of the Act, both of which also, I consider, caused concern to Moriarty J. in dealing with the M -v- D case. The first of these, to which I have already referred, is the operation of Section 9 and the manner in which it may effect the privilege against self-incrimination. It seems to me that the Court, in operating Section 9 within the boundaries of the Constitution, would have to take particular care, whether by limiting the purpose for which any information disclosed under the Section may be used or otherwise, to protect the privilege of a Respondent against the revealing of information which could later be used in a criminal prosecution.
160. Secondly, Section 8 of the Act permits the introduction of hearsay evidence by “a member or authorised officer” (i.e., a Garda Chief Superintendent or officer of the Revenue Commissioners) as to his or her belief that a Respondent is in possession or control of specified property and that the property constitutes directly or indirectly proceeds of crime. The evidence is not, of course, conclusive and is open to challenge by a Respondent but in my opinion a Court should be slow to make Orders under Section 3 on the basis of such evidence without other corroborating evidence. In M -v- D Moriarity J. carefully surveyed the corroborative evidence in that case, but drew attention to the difficutly of accepting hearsay proof of suspicion alone. At page 4 of his judgment he states:-
“I specifically reserve to another occasion consideration of the hypothesis of how a case in which hearsay proof of suspicion alone is tendered, particularly if likely to be substantiated by a plea of privilege on challenge, should be addressed by the Court, although I acknowledge concern that significance, circumspection and care for such a Respondent’s entitlements may require to be exercised, and that a generalised advertence to ‘the innocent having nothing to fear’ would not appear to in any realistic sense satisfy the requirements of Sections 2 or 3 of the Act.”
161. I entirely share the concern of the learned Moriarty J. on this aspect of the Act. I accept that it must be presumed that proceedings, procedures, discretions and adjudications which are provided for by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice and there is no doubt that this Court and the Supreme Court on appeal would so conduct procedures under the Act. Nevertheless it appears to me that both in the case of the procedures under Section 9 and in dealing with the type of evidence allowed under Section 8 any Court would have to take particular and special care to protect the rights of a Respondent
162. Bearing in mind the effect of the various relevant judgments of the Supreme Court to which I have referred above, and which are, of course, binding on me, and viewing the provisions of the Act in the light of their proportionality to the threat posed to the common good, I am satisfied that it has not been established that the provisions of the proceeds of Crime Act, 1996 are invalid having regard to the provisions of the Constitution. The Plaintiff’s claim therefore fails.
Maher v. Minister for Agriculture, Food and Rural Development
[2001] IESC 32; [2001] 2 IR 139; [2001] 2 ILRM 481 (30th March, 2001)
THE SUPREME COURT
KEANE C.J.
DENHAM J.
MURPHY J.
MURRAY J.
FENNELLY J.
340/2000
BETWEEN:
NICHOLAS PHILIP (OTHERWISE MARTIN) MAHER,
MALACHY BRETT AND RITA RYAN
APPELLANTS
AND
THE MINISTER FOR AGRICULTURE, FOOD AND RURAL DEVELOPMENT, IRELAND AND THE ATTORNEY GENERAL
RESPONDENTS
[JUDGMENTS FROM KEANE C.J., DENHAM J., MURRAY J. AND FENNELLY J.; MURPHY J. AGREED WITH DENHAM J.]
JUDGMENT delivered on the 30th day of March 2001 by Keane C.J.
Introduction
1. What has become known as the milk quota system has given rise to much litigation, both at the level of the member States and in the Courts of Justice of the European Communities. The present case arises out of the making by the first named respondent (hereafter “the Minister” ) of the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000) (hereafter “S.I. 2000” ). These provided for certain changes in the system which I shall endeavour to summarise at a later point. The validity of S.I. 2000 is challenged by the appellants on the ground that it constitutes the exercise of legislative power by the Minister contrary to Article 15.2.1 º of the Constitution, violates the property rights of the applicants guaranteed by the Constitution and is not afforded immunity by the provisions of Article 29.4.7 of the Constitution, providing for the consequences of our accession to the European Economic Communities. The appellants claim was dismissed in the High Court in a reserved judgment by Carroll J. and they have now appealed from that judgment and order to this court.
2. The milk quota scheme was first introduced in 1984 by the Council of EEC in order to cope with problems which had arisen from the implementation of the Common Agricultural Policy (hereafter “the CAP” ) established under the Treaty of Rome as it affected the market in dairy products. The measures establishing the scheme were, accordingly, part of the common organisation of the market in the milk sector in the EEC, deriving from the CAP and known as the COM.
3. One of the features of the COM was a guaranteed price for milk producers throughout the EEC. This ultimately had it as its consequence a supply of milk and milk products throughout the EEC which was hugely in excess of the demand, resulting in massive costs to the community and severe downward pressure on milk prices. Attempts to deal with the problem in other ways having proved abortive, the scheme adopted in 1984 provided for a ceiling on milk production in each of the member States and the allocation to individual producers of a ceiling on their annual production. This was effected by the imposition of what was described as a “super levy” on any producer who exceeded the ceiling which would render uneconomic the production of any milk in excess of the relevant figure. This was done by the allocation of what were called “reference quantities” to the individual producers which became known as “quotas” and it will be seen that it was an essential part of the scheme that the total of the quotas in any member State, including Ireland, should not exceed the quota allocated by the EEC to the member State in question.
4. The scheme was originally intended to run for five years up to the 31st March 1989, but was in fact successively extended up to the 31st March 1993. A new, but substantially similar, system was then adopted which expired on 31st March 2000.
5. While the scheme achieved its objective of halting the growth in milk production in the EEC, the quota was initially set at a level which was substantially above the consumption of milk and milk products in the EEC. Accordingly, there continued to be a surplus of milk in the community. Various methods were adopted by the EEC of dealing with the resultant problems. Eventually, what was called “Agenda 2000” was adopted by the EEC Commission with a view to preparing the dairy sector for the further problems which would arise from the enlargement of the European Union and the liberalisation of trade within the World Trade Organisation. The latter developments would mean, not merely a new threat of surpluses in milk production, but also an undermining of the effectiveness of the quota regime in maintaining milk prices.
6. Agenda 2000 proposed to continue the milk quota regime for six years to March 2006 and also envisaged other proposals which were of particular relevance to the present proceedings. These related to what was seen by the Commission as a particular problem, i.e. the extent of quotas held by persons who were no longer actively involved in the production of milk. Under the scheme as originally introduced, the milk quota was attached to the land and could only be transferred to another person if the land to which it was attached was being transferred to that person. An exception was introduced, however, in 1987 which enabled producers to lease any part of the quota which he or she did not intend to utilise in a particular year until the end of the milk quota year.
7. The new measures adopted by the EEC to give effect to Agenda 2000 required the member States to adopt detailed rules as to what was to happen in relation to the transfer of quotas. It also conferred certain discretions on the member States as to provisions which might or might not be included in any such detailed rules. The relevant rules in Ireland are contained in S.I. 2000 which is challenged in these proceedings.
8. The effect of S.I. 2000 is that, subject to certain exceptions, it is no longer possible for persons who are not actively engaged in milk production to transfer their quota with the land by way of sale. Nor, again, subject to certain exceptions, is it possible to lease a quota with the land. While a quota can be transferred upon the renewal of a lease of lands, a person who has not been involved in milk production for three years or more, can make a temporary lease or transfer of the quota for one further year and no more. The regulations also provided for a “restructuring scheme” under which a quota holder can offer all or part of his or her quota to the purchaser of the milk in return for payment. The maximum price is to be determined by the Minister. There are exceptions to these various requirements when the lands were being sold, leased, given to or inherited by a spouse or family member.
9. The first applicant in an affidavit said that he was the owner of 130 acres of land in Cashel, Co. Tipperary and that there was a milk quota attached to the lands which amounted to approximately 28,170 gallons. He said that as a result of borrowings which he had to make at high interest rates in the 1970s to develop his dairy business and the wiping out of his dairy herd by brucellosis between May and September 1980, he found it necessary to earn an income outside dairy farming. He and his wife, accordingly, in 1986 started up an oil distribution company and in the year 1996 he leased his lands and milk quota to one Maurice Ryan: the lease expired on the 31st March 2000. He said that, as a result of the introduction of S.I. 2000, if he wished to retain his quota, he had only three options:
(a) to resume milk production;
(b) to renew the lease to Mr. Ryan;
(c) to lease the quota temporarily for one year.
10. He said that neither of the first two options were available to him and the third would only enable him to retain the quota for a year. However, if he were to dispose of the milk quota, his options would be to sell it under the restructuring scheme at the maximum price fixed by the Minister of £1.36 per gallon or do the same in a years time, after temporarily leasing it for one year. He would also be entitled to sell it to his former lessee, Mr. Ryan, but the latter was not interested in acquiring it. He said that the figure fixed by the Minister did not represent the market value of the milk quota. He said that his two children were aged 14 and 16 and that he wished to retain his milk quota so that they could take up dairy farming in a few years time if they so chose.
11. The second applicant said that he was the joint owner with his wife of lands and premises at Fethard, Co. Tipperary together with the milk quota attaching to the lands: the lands comprised approximately 77 acres and the milk quota amounted to approximately 24,404 gallons. He said that some years ago he began to suffer from ill health and it became necessary for him to cease milk production and sell his cows. Since then most of his income had been earned from leasing some of the lands together with part of his milk quota and temporarily leasing the balance of the milk quota. He said that his only options as a result of the introduction of S.I. 2000 were to resume milk production or sell his quota under the restructuring scheme. He said that, as he was now nearly 76 and no longer in full health, he was not in a position to resume milk production. As to the sale of his quota under the restructuring scheme, his complaints were the same as those of the first applicant.
12. The third applicant is the owner of 20 acres of land at Clonoulty, Co. Tipperary together with the milk quota attaching to the lands amounting to 11,844 gallons. She said in her affidavit that for a number of years she had temporarily leased the quota to the local creamery and that most of her income had come from that temporary lease. Her only other income was the sale of weanling calves born in the winter/spring months and sold the following autumn/winter. As in the case of the other two applicants, she said that her only options as a result of S.I. 2000 were to resume milk production or sell her milk quota under the restructuring scheme and that she was not in a position to resume milk production as she could not afford the cost of installing a new milking parlour. Her complaints as to the option of selling under the restructuring scheme were to the same effect as those of the first and second named applicants.
The regulatory framework
13. The relevant EEC Regulations are Council Regulation (EEC) No. 3950/92 of 28th December 1992 as last amended by Council Regulation (EC) No. 1256/99 of 17th May 1999 (hereafter “the EC Regulations” ).
14. Article 6 requires member States, before a specified date, to authorise for a twelve month period temporary transfers of individual reference quantities which producers who were entitled thereto do not intend to use. It also provides that the member States may vary transfer operations depending on the category of producers or dairy production structures, may limit them at the level of the purchaser within regions and may determine to what extent transfer operations may be renewed. It also permits a member State to decide not to comply with this requirement, on the basis of certain criteria. The last mentioned discretion was not exercised in the case of Ireland.
15. Article 7.1 provides that
“Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by inheritance to the purchasers taking it over in accordance with the detailed rules to be determined by the member States taking account of the areas used for dairy production or other objective criteria and, where applicable, of any agreement between the parties.
“Any part of the reference quantity, which is not transferred with holding, shall be added to the national reserve …”
16. As already noted, the detailed rules in Ireland are set out in S.I. 2000. However, Article 8a of the EC Regulations provided that
“Acting in compliance with the general principles of community law, member States may take the following measures, with the aim of ensuring that reference quantities are solely attributed to active milk producers: …
(b) member States may decide not to apply the provisions on transfer of reference quantities in Article 7(1).”
17. The Minister availed of this power by providing as follows in Article 5(1) of S.I. 2000:-
“Subject to the exceptions provided for in Regulations 6, 7, 8, 9, 10 and 11, where any holding, or part thereof, is transferred the milk quota attached to that holding or part thereof shall not be transferred to the person to whom that transfer is made.”
18. Sub-paragraph (2) goes on to provide that, where there is a transfer of land to which the milk quota attaches, the milk quota is to be added to the “national reserve” unless one of the relevant exemptions in the regulations has been availed of. The concept of the “national reserve” , which has been a feature of the EEC milk quota scheme since its inception in 1984, means in effect that, where a milk quota ceases to be attached to a particular farm, it may remain available as part of the total quota to which the member State is entitled. Under S.I. 2000, such milk quotas become available to active milk producers, with priority being given to small and medium producers.
19. The exemptions provided for under S.I. 2000 from Article 5(1) must next be considered. Article 7, in effect, enables the Minister to grant a certificate of entitlement to transfer a milk quota to a person who satisfies him that he has been actively engaged in the production of milk for the previous three years. Article 6 enables the quota to be transferred to the spouse and defined members of the family of the transferor. Article 9 enables the lessee of land and a quota to purchase the leased quota with or without the land from the lessor on the termination of the lease, provided he or she is a producer. Article 10 provides for the transfer of the quota on a renewal of the lease. Article 12 provides for the transfer of the quota to the lessor where a lease of land which the milk quota attaches terminates.
20. Article 8 of the EC Regulations provides that
“With a view to completing restructuring of milk production or to environmental improvement, member States may take one or more of the following actions in accordance with detailed rules which they shall lay down taking account of the legitimate interests of the parties …” .
21. There follow five options which were available to the member States. That contained in sub-paragraph (b) was availed of by the Minister in S.I. 2000 and was as follows:-
“… determine on the basis of objective criteria the conditions under which producers may obtain, in return for payment, at the beginning of a twelve month period, through allocation by the competent authority or by the body designated by that authority, of reference quantities released definitively at the end of the preceding twelve month period by other producers in return for compensation in one or more annual instalments equal to the above mentioned payment …”
22. Article 26 of S.I. 2000 enables the Minister, pursuant to Article 8(b), to introduce a scheme called the “milk quota restructuring scheme” for the surrender of a milk quota at the end of each milk quota year and its reallocation at the beginning of the following year. Sub-paragraph (5) provides that the maximum payment for a surrendered quota and the reallocation price is to be set by the Minister.
23. The Minister also availed of the power conferred on the member State by Article 6.1 of the EC Regulations as to the temporary transfer of quotas which producers who were entitled thereto did not intend to use. Article 27 of
S.I. 2000 provides inter alia as follows:-
“(2) A person may, subject to paragraphs (3) and (4), offer for temporary transfer such part of his or her milk quota as he or she does not intend to use during that milk quota year.
(3) The holder of a quota who neither made milk deliveries to a purchaser, or sold milk or milk products directly for consumption, during any three successive milk quota years since 1st April 1997 and who made a temporary transfer of his or her quota under Regulation 16 of the Regulations of 1995 or under paragraph (2) during each of the three milk quota years in question shall not be entitled to make a temporary transfer under paragraph (2).
(4) A person who neither made milk deliveries to a purchaser or sold milk or milk products directly for consumption, has leased his or her land and milk quota for a period of three successive years or more, since April 1st, 1997 shall be entitled to make a temporary transfer of his or her quota under paragraph (2) for one year only.”
24. There follow provisions enabling the Minister to authorise a temporary transfer of the quota for one further milk quota year in “exceptional circumstances” .
25. Finally, it should be noted that recital (6) of the EC Regulation sets out the rationale of the relevant provisions of the EC Regulations as follows:-
“Whereas the experience with the additional levy scheme has shown that the transfer of reference quantities through legal constructions such as leases which do not necessarily lead to a permanent allocation of the reference quantities concerned to the transferee, can be an additional cost factor for milk production hampering the improvement of production structures;
Whereas in order to strengthen the reference quantities character as a means of regulating the market of milk and milk products, the member States should be authorised to allocate reference quantities, which have been transferred through leases or comparable legal means, to the national reserve for redistribution, on the basis of objective criteria, to active producers in particular, to those who have used them before;
Whereas member States should also have the right to organise the transfer of reference quantities in a different way than by means of individual transactions between producers;
Whereas it should be explicitly provided, in particular with a view to taking account adequately of existing legal rights, that, when using these authorisations, member States are to take the necessary measures to comply with the general principles of community law …”
26. The factual background in Ireland against which the Minister, in purported exercise of the powers conferred on the member States, made S.I. 2000, was set out in an affidavit by Mr. Patrick Evans, an assistant principal officer in the milk policy division of the department of the Minister. He said that Ireland had had particular difficulties in relation to the milk quota scheme due to the large number of small and medium scale producers in the dairying sector. Of 31,500 active producers engaged in milk production in Ireland, 68% of the total had a milk quota of less than 35,000 gallons. He said that in view of the fact that milk production was far more profitable than beef, sheep or pig production, producers were constantly seeking to expand their dairying enterprise and that, as a result, the demand for milk quota in Ireland far exceeded the supply of such quota.
27. Mr. Evans said that this situation was compounded because of the leasing of land and quota, which represented between 9% and 10% of the national quota. A further 6% of the national quota was leased temporarily without land on an annual basis. In the result, a significant portion of the profit from milk production was transferred from the milk producer to the owner of the quota who, in most instances, was no longer involved in milk production. This was likely to increase because of the number of producers ceasing milk production and resulted generally in a less efficient dairying industry characterised by a lack of certainty and higher production costs. He said that it was standard practice for member States to consult with the Commission beforehand on the measures they might propose to adopt for the application of the milk quota regime in their respective territories and this procedure had been fully observed by Ireland.
28. Mr. Evans further deposed that the Minister had consulted with organisations representing the dairy industry and other interested parties before making a decision on the changes that should be introduced. He said that there was a general consensus that
(i) the new regime should reinforce the position of active milk producers;
(ii) the interests of small and medium scale producers should be favoured;
(iii) the permanent transfer of quota should be facilitated;
(iv) quota should be allocated at a reasonable cost.
29. Mr. Evans said that the Minister, in implementing the new regime by way of S.I. 2000, was of the view that the provisions were necessary in order to ensure that the objectives contained in the EC Regulations were achieved in Ireland. In particular, the changes were intended to ensure, as provided in Article 8a of the EC Regulations, that quotas were solely attributed to active milk producers.
30. Mr. Evans said that the first and second named appellants had benefited to the extent of approximately £70,000 and £46,000 respectively from their quotas, during periods when they were not active milk producers.
The applicable law
31. Article 32 of the Treaty of Rome under the title “Agriculture” provides that the common market is to extend to agriculture and trade in agricultural products and must be accompanied by the establishment of a common agricultural policy. The objectives of the CAP are set out in Article 33 as follows:
“(a) To increase agricultural productivity by promoting technical progress and by ensuring the rational development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
(b) Thus to ensure a fair standing of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
(c) To stabilise markets;
(d) To ensure the availability of supplies;
(e) To ensure the supplies for each consumer is at reasonable prices.”
32. Article 33.2 requires account to be taken of the particular nature of agricultural activity, resulting inter alia from the “social structure” of agriculture, in working out the CAP.
33. Article 34 provides for the establishment of a common organisation of agricultural markets and under Article 2 may include the measures required to attain the objectives set out in Article 33, including in particular the regulation of prices.
34. Article 5 provides that
“Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the community. They shall facilitate the achievement of the communitys tasks.
“They shall abstain from any measure which could jeopardise the attainments of the objectives of this Treaty.”
35. Article 189 establishes what might be called the legislative machinery of the community. It provides that
“In order to carry out their task, the Council and the Commission shall, in accordance with the provisions of this Treaty, make regulations, issue directives, take decisions, make recommendations or deliver opinions.
“A regulation shall have general application. It shall be binding in its entirety and directly applicable in all member States.
“A directive shall be binding, as the result to be achieved, upon each member State to which it is addressed, but shall leave to the national authorities the choice of form and methods …”
36. Article 29.4.3º of the Constitution provided inter alia that the State might become a member of the European Economic Community established by the Treaty of Rome. Article 29.4.7º, as amended, provides that
“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the communities [including the European Economic Community], or prevents laws enacted, acts done or measures by the European Union or the communities or by institutions thereof, or by bodies competent under the treaties established in the communities, from having the force of law in the State.”
37. Following the accession by Ireland to the European Communities, the European Communities Act 1972 (hereafter “the 1972 Act” ) was enacted by the Oireachtas. Section 2 provided that
“From the 1st day of January 1973, the treaties governing the European Communities and the existing and future acts adopted by the institutions of those communities shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties.”
Section 3 provided that
“(1) A Minister of State may make regulations for enabling s. 2 of this Act to have full effect.
(2) Regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Minister making the regulations to be necessary for the purpose of the regulations (including provisions repealing, amending or applying, with or without modification, other law, exclusive of this Act).
(3) Regulations made under this section shall not create an indictable offence.”
Section 4, as substituted by section 1 of the European Communities (Amendment) Act 1973, provided that regulations under the Act were to have statutory effect, but could be annulled where the Joint Committee on the Secondary Legislation of the European Communities so recommends to the Houses of the Oireachtas and also enables one-third of the members of Dáil Éireann or Seanad Éireann to requisition a meeting of either House where regulations are made and the Dáil and Seanad, as the case may be, stands adjourned for a period of more than ten days.
In Meagher .v. Minister for Agriculture , (1994) 1 IR 329 it was held by this court that s. 3 of the 1972 Act was not invalid having regard to the provisions of the Constitution.
38. The law of the European Communities can have legal effect in Ireland because of the making of Regulations which are directly applicable in each of the member States. The EC Regulation, on foot of which the Minister purported to make S.I. 2000, is such a regulation. It is, accordingly, to be distinguished from Directives, which have binding force as to the result to be achieved for each member State to which they are addressed, but which leave the member States free to choose the form and methods for implementing the directive. The jurisprudence of the Courts of Justice of the European Communities has, of course, established that the law of the communities, whether embodied in regulations or directives, must be given primacy, where it is applicable, over the domestic law of the member States.
39. It is claimed on behalf of the applicants in the present proceedings that S.I. 2000 was made in violation of certain provisions of the Constitution and that its making was not necessitated by the obligations of membership of the European Union or of the communities within the meaning of Article 29.4.7º of the Constitution. The first article relied on is Article 15.2.1º which provides that
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”
40. The second ground is that S.I. 2000 constitutes an unjust attack on the property rights of the applicants, in the form of their respective milk quotas, guaranteed by Articles 40.3.1º and 2º and 43 of the Constitution.
41. It was conceded on behalf of the appellants that, if the making of
42. S.I. 2000 was necessitated by the obligations of Irelands membership of the Communities within the meaning of Article 29.4.7º of the Constitution, the applicants could not succeed, even if the regulations were otherwise in violation of the Constitution.
The High Court judgment
43. In the High Court, the learned High Court judge held that the discretions which were left to the member States were within the principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union and that S.I. 2000 did not go beyond what was required by those principles and policies. She said that the decision of the Minister that quotas should go to active milk producers was in accordance with the stated policy of the Regulations. She was of the view that S.I. 2000 was necessitated by the obligations of membership of the EU. However, she was also of the view that, because the choices made in S.I. 2000 were within the principles and policies of the milk quota scheme, it could also be regarded as valid secondary legislation which was not contrary to Article 15.2.1º of the Constitution.
44. As to the claim that S.I. 2000 was in breach of the property rights of the appellants, the learned High Court held that it was clear from the jurisprudence of the European Court of Justice that the right to property safeguarded by the community legal order did not include the right to dispose for profit of an advantage such as a milk quota. She concluded that the nature of the milk quota, which was created by European law, must bear the same meaning in domestic law as in the legal order of the European Union.
45. The learned High Court judge had been urged by counsel for the appellants to have regard to the Dáil Debates on the Eleventh Amendment of the Constitution Bill in determining what was meant by the expression “necessitated by the obligations of membership …” in Article 29.4.7º. She rejected the submission that she was entitled to have regard to what was said during the course of the Oireachtas debates, but had regard de bene esse to the fact that during the passage of the Bill through the Oireachtas the word “necessitated” was substituted for the word “consequent on” . However, she was also of the view that that did not assist the arguments advanced on behalf of the applicants as to the validity of S.I. 2000.
46. As already noted, the appellants have appealed from the judgment and order of the High Court. The respondents have served a notice to vary the judgment in so far as it could be construed as allowing the court to have regard to the amendment effected to the Eleventh Amendment of the Constitution Bill during its passage through the Oireachtas.
Submissions of the parties
47. Mr. Gerard Hogan S.C., on behalf of the applicants, did not invite the court to overrule its previous decision in Meagher to the effect that s. 3 of the 1972 Act was not invalid having regard to the provisions of the Constitution. He submitted, however, that in determining whether S.I. 2000 was itself “necessitated” by the obligations of EC membership and thus immune from constitutional scrutiny, the court should not follow in its entirety the reasoning by which the court arrived at its conclusions in that case. (It should be pointed out at this stage that the court in Meagher, having ruled on the constitutionality of s. 3 of the 1972 Act, went on to consider whether the specific regulations challenged in that case were intra vires and unanimously concluded that they were.) He said that, in so far as any of the judgments in that case suggested that the word “necessitated” should be equated to “convenient” or “desirable”, that reasoning should not now be followed. He submitted that the word “necessitated” clearly indicated that Article 29.4.7º allowed for the transfer of legislative, executive and juridical sovereignty to the European Union and the Communities only where this was a legal obligation resulting from membership of the EU and the Communities.
48. Mr. Hogan submitted that this approach to Article 29.4.7º was reinforced by the parliamentary history of the Third Amendment of the Constitution Bill, 1971: the words “consequent upon” originally used in the Bill had been replaced by “necessitated” at the committee stage. In the present case, the issue, accordingly, was as to whether the making of S.I. 2000 by the Minister in purported exercise of the powers conferred by s. 3 of the 1972 Act was a legal obligation deriving from our membership of the Communities and not simply a consequence of that membership.
49. Mr. Hogan further submitted that this construction of Article 29.4.7º was supported by the terms of Article 29.4.6º which provided that
“The State may exercise the options or discretions provided by or under Article 1.11, 2.5 and 2.15 [of the Amsterdam Treaty] and the Second and Fourth Protocols set out in the said Treaty but any such exercise shall be subject to the prior approval of both Houses of the Oireachtas.”
50. He submitted that this provision in the Constitution would have been quite unnecessary if legislative sovereignty could be surrendered to the European Union in the manner suggested by some of the reasoning in Meagher. Mr. Hogan further submitted that, having regard to the wide range of choices which a member State could make under the relevant Articles of the EC Regulation, it could not be said that, even adopting the reasoning of the court in Meagher, legislation in the form of a ministerial regulation was necessitated in this case by the obligations of EC membership and he cited in particular passages in the judgment of the court and of Denham J. in that case. He also cited the decision of Murphy J. as a High Court judge in Green .v. Minister for Agriculture (1990) 2 IR 17.
51. Mr. Hogan submitted that, assuming that S.I. 2000 was not shielded from constitutional scrutiny by virtue of Article 29.4.7º, it clearly violated Article 15.2.1º of the Constitution, since it constituted delegated legislation which went significantly further than simply giving detailed effect to principles and policies contained in a parent Act. He relied particularly in support of this proposition on the decisions of this court in Cityview Press Ltd. .v. AnCO , (1980) IR 381, ONeill .v. Minister for Agriculture , (1997) 2 ILRM 435 and Laurentiu .v. Minister for Justice, Equality and Law Reform , (2000) 1 ILRM 1 and of the High Court in McDaid .v. Sheedy , (1991) 1 IR 1 and Lovett .v. Minister for Education , (1997) 1 ILRM 89.
52. Mr. Hogan submitted that, in determining whether S.I. 2000 was constitutionally valid, as being no more than the detailed implementation of principles and policies contained in parent legislation, it was immaterial that S.I. 2000 had been made in purported exercise of a power conferred by an EC Regulation, as distinct from a Directive, citing observations of the Court of Justice in Case 230/78 SPA Eridania – Zuccherifici . Mr. Hogan said that, while Mr. Evans in his affidavit had laid stress on the provisions of the Regulation enabling member States to take measures “with the aim of ensuring that reference quantities are solely attributed to milk producers” , it is nowhere said that this is a community objective which the regulation requires member States to implement: on the contrary, it simply enables member States who wish to pursue this policy objective so to do.
53. Mr. Hogan urged that it was clear from S.I. 2000 that the Minister had elected to make substantial and important policy choices, of which the most significant in practical terms was the effective breaking of the link between land and quota, save for family transactions. He said that the jurisprudence of the Court of Justice made it clear that, in areas where common rules applicable to all the member States are not laid down by a particular regulation, the member States in implementing the regulation in those areas are entitled to act in accordance with the procedural and substantive rules of their own national law, citing the decision of the Court of Justice in Kjell Kirllson .v. Svenska Jordbruksverket , Case C-292/97 (2000) ECR 1-2737. He also relied on Case C-258/93 Dominikanerinnen-Kloster altenhohenau , (1995) ECR 1-4069.
54. As to the claimed violation of the applicants property rights, Mr. Hogan accepted that the Court of Justice had generally taken the view that milk quotas do not constitute a property right so far as community law is concerned and referred in this context to R. .v. Ministry of Agriculture, xp. Bostock , Case C-2/92 (1994) ECR 1-955. However, that case was concerned with the right to dispose of a quota for profit, whereas the present case involved what was effectively a form of compulsory acquisition by the State of a quota at a price substantially less than the prevailing market value. He said that, in these circumstances, a milk quota might qualify for protection as a property right which the member States were obliged as a matter of community law to protect, citing the comments of the Advocate General in Damand .v. Haubtzollampt Trier , (KC-186/96) 1998 ECR 1-8529, 8541.
55. Mr. Hogan further submitted that, in any event, the dicta in Bostoch did not prevent such a right from being regarded as a property right for the purposes of Irish constitutional law. He pointed out that in Duff .v. Minister for Agriculture (KC-63/93 (1996) ECR 1569, the Advocate General had pointed out that the fact that the plaintiffs legitimate expectations at community law level had not been infringed by the actions of the Minister did not prevent such a requirement being founded on principles of national law and that, in the event, that passage had enabled the plaintiff to succeed when the case returned to this court.
56. Mr. Hogan submitted that there was no valid reason why an intangible but valuable right such as a milk quota should not be regarded as a property right and, as such, it had been unquestionably violated by S.I. 2000.
57. On behalf of the respondents, Ms. Mary Finlay, S.C. submitted that, even if it were assumed that the making of S.I. 2000 by the Minister was not “necessitated” by the obligation of Irelands membership of the European Communities within the meaning of Article 29.4.7º of the Constitution, it was intra vires s. 3 of the 1972 Act as representing the detailed implementation of principles and policies set out in parent legislation, in accordance with the law as found by this court in Cityview Press Ltd. .v. AnCO and Laurentiu .v. Minister for Justice, Equality and Law Reform .
58. Ms. Finlay submitted that the EC Regulations, which had direct effect in Ireland, were the equivalent of parent legislation in that they enabled the member States to exercise certain discretions in regard to the implementation of the milk quota scheme generally throughout the European Union.
59. Ms. Finlay submitted that, in the context of the common organisation of the market in milk and milk products, it was recognised that the position of producers varied in different areas throughout the Community and that this required different responses in different areas. It was for that reason that the Regulations empowered the member States to take certain limited decisions as to the precise way in which the COM was to be implemented in each member State. Such discretions had, however, to be exercised at all times in accordance with the Regulations and with a view to achieving the overall objectives and aim of the COM and in such a way as to avoid discrimination between producers in different parts of the Community.
60. Ms. Finlay submitted that s. 3 of the 1972 Act authorised the Minister to make regulations for the purpose of enabling the EC Regulations as to the milk quota and super levy scheme to have full effect in Ireland and that was the sole purpose of S.I. 2000. Accordingly, prima facie , S.I. 2000 was intra vires the powers conferred on the Minister by s. 3 of the 1972 Act.
61. Ms. Finlay submitted that the super levy/milk quota regime was established by EC regulations and that the respective roles of the Council of Ministers and EC Commission on the one hand and the member States on the other hand in the COM was analogous to the respective roles of the Oireachtas and the Executive in relation to purely domestic legislation. All the essential policies and principles relating to the COM were determined by the Council of Ministers and what was left of the member States were detailed implementing rules and limited permissible variations. The position of the Minister was thus not the same as that of the relevant ministers in ONeill .v. Minister for Agriculture and Laurentiu .v. Minister for Justice and the making of S.I. 2000 complied with the test laid down in Cityview Press Ltd. .v. AnCO .
62. Ms. Finlay submitted that it was not correct to say that the break in the link between land and quota “effected by the 1999 EC Regulation” and S.I. 2000 was a radical new departure, as suggested on behalf of the applicants. Since the introduction of the general rule in 1984 that quota should transfer with the land, a series of exceptions had been created and those introduced by the 1999 Regulation were only the last in the sequence. She further submitted that Article 7(1) expressly obliged the member States to lay down detailed rules: S.I. 2000 were such detailed rules. As to the decision not to provide for the automatic transfer of quotas with land, this could only be done for the purpose of ensuring that quotas were solely attributed to active milk producers and this was what S.I. 2000 was intended to achieve.
63. Ms. Finlay submitted that restructuring schemes had also been authorised in the member States by EC law since 1987. The actions that could be taken by member States with a view to completing restructuring of milk production were exhaustively set out in Article 8 of the EC Regulation and in making the detailed rules the member States were constrained by the express provisions of that Regulation and the overall aims and policies of the CAP, COM in milk and milk products, the additional levy scheme and the relevant EU instruments. Ms. Finlay submitted that in making Regulation 27 relating to the temporary leasing of quota, the Minister was acting in accordance with the express obligation under Article 6.1. It was merely the precise terms of a detailed temporary leasing scheme which were left to be specified by the member State and this was what had been done in S.I. 2000.
64. As to the submission that Article 40.3.2º and 43 had been violated by
65. S.I. 2000, Ms. Finlay submitted that it was clear that a milk quota was not a property right and the opinion of the Advocate General in Duff .v. Minister for Agriculture was not authority for the proposition that the nature of the rights conferred by a milk quota on the appellants were different in Irish law.
66. Ms. Finlay submitted that there was no question of anything in the nature of a compulsory acquisition by the State of a quota at less than the prevailing market price. The quota was not acquired in any sense by the State: in the present case, the applicants were all persons who were no longer engaged in active milk production and who were entitled to release their quota, which would then be reallocated to an active producer who would pay them the specified price. Each of the applicants was simply endeavouring to earn a greater profit from the milk quota currently held by them than was permissible under the S.I. 2000 and were not seeking to use the quota for the purpose for which it was intended, i.e. the production of milk up to the amount of the quota.
67. If, contrary to the submissions, it was found that any of the provisions of S.I. 2000 prima facie violated the Constitution, it was submitted that they were “necessitated” by the obligation of membership of the European Union or of the Communities and hence were entitled to the protection of Article. 29.4.7º of the Constitution. Ms. Finlay submitted that it was clear from the decision of this court in Meagher that the fact that the member State had been left some element of choice or discretion as to the precise form a particular measure should take was perfectly consistent with the measure being necessitated by the obligations of EC membership. Thus, in Meagher, although the relevant directive contained no express provision as to the creation of sanctions, the court accepted that the nature of the sanctions to be imposed, including the penalties, were properly determined by regulation. She submitted that the somewhat broader approach to the construction of the phrase “necessitated by the obligations of membership” than that being contended for on behalf of the appellants was also consistent with the decision of this court in Crotty .v. An Taoiseach (1987) IR 713.
68. Ms. Finlay said that the respondents strongly resisted the proposition advanced by the appellants that the reasoning in Meagher should be reconsidered at this stage by the court. Meagher had been a decision on the constitutionality of s. 3 of the 1972 Act and had been continuously relied on since then by the State, approximately 498 statutory instruments having been made by various ministers under s. 3 of the 1972 Act.
69. As to the notice to vary, Mr Paul Gardiner S.C. on behalf of the respondents submitted that the decision of this court in People (DPP) .v. McDonagh (1996) 1 IR was not authority for the proposition that the parliamentary history of a particular bill was an admissible aid to the interpretation of an amendment of the Constitution effected by way of referendum. He said that to hold otherwise would be to derogate from the primary role of the people in determining whether the Constitution should be amended which had been emphasised in two recent decisions of this court, McKenna v. An Taoiseach (No 2) (1995) 2 IR 10 and Hanafin .v. Minister for the Environment (1996) 2 IR 321. He submitted that it followed that the court was not entitled to have regard to the fact that the words “consequent upon” originally used in the Third Amendment of the Constitution Bill had been replaced by “necessitated” at the committee stage.
Conclusions
70. It is accepted in this case that, if the making by the Minister of S.I. 2000 was “necessitated” by the obligations of membership of the European Union or the European Economic Community, it could not be successfully challenged by the appellants. It would seem to follow that this should be the first issue to be addressed by this court.
71. As a result of the passage of the Eleventh Amendment of the Constitution, Article 29.4.3º empowered the State to become a member of inter alia the European Economic Community established by the Treaty of Rome. Article 29.4.5º ensured that laws enacted, acts done or measures adopted by the State which were necessitated by the obligations of membership of inter alia the EEC were not invalidated by any other provision of the Constitution. Section 2 of the 1972 Act, which provided that the treaties governing the European Communities and the existing and future acts adopted by the institutions of the communities were to be binding on the State and be part of its domestic law under the conditions laid down in the treaties, was clearly necessitated by the obligations of membership of those communities.
72. The result was a historic transfer of legislative, executive and judicial sovereignty to the European Communities and, as a result of further referenda, the European Union. In particular, the exclusive roles hitherto enjoyed by the Oireachtas in the legislative field and the courts in the administration of justice were significantly abridged. The developing jurisprudence of the European Court of Justice also made it clear that there existed effectively an autonomous European legal order and that the member States were obliged to acknowledge the primacy of Community law over national law in areas where it was applicable.
73. It was also, moreover, clear that the Member States envisaged that the communities established by treaties were to be dynamic in their nature and that the obligations of membership referred to in Article 29.4.5º would not be static.
74. In the result, a significant new volume of legislation became applicable in Ireland and binding on all the citizens either in the form of Directives which the State, as a result of its membership, was obliged to implement in domestic legislation, or Regulations which were directly applicable in Ireland and did not require such legislation for their implementation. Since, under the communities legal order, the method by which a Directive was implemented, as distinct from its substance, was to be determined by the Member State, the Directive itself would contain no indication as to which of the two normal methods employed in Ireland – an Act of the Oireachtas or a ministerial regulation – was to be employed. The Directives, in short, did not contain the enabling provision, commonplace in domestic Irish legislation, under which a minister or some other body so authorised by the Oireachtas can give detailed effect in the form of regulations to policies determined by the Oireachtas. That was not necessarily the case with Regulations which, of their nature, did not require implementation by either legislation or regulation. As the present case demonstrates, however, it was also possible for the Council of Ministers to issue regulations having direct effect in a Member State such as Ireland which, in defined areas, required or authorised the Member State to adopt its own rules whether by way of legislation or regulation. It is also, of course, obvious that in some instances, in the case of both Directives and Regulations, their detailed implementation can be effected by administrative acts rather than by legislation or regulation.
75. Accordingly, had s. 3 of the 1972 Act not been enacted by the Oireachtas, it would have been necessary for Directives to be implemented by an Act of the Oireachtas, since there would have been no parent legislation in this country enabling it to be done by way of regulations made by the appropriate minister. The same would apply to those Regulations in which the member States were required or authorised to adopt rules themselves for the purpose of implementing the Regulations. Thus, although a Directive did no more than require the member States to reduce or increase a tariff or duty by a specified sum, leaving no policy choice to be made by the Oireachtas, it would have been necessary for an Act to be passed if Ireland was to fulfil its obligation as a member of the community.
76. As already noted, s. 3 of the 1972 Act, giving Ministers the power to make regulations for the purposes of s. 2, was found to be constitutional by this court in Meagher. The judgments in the case were cited frequently in the course of the arguments in the present case and clearly require careful consideration.
77. The facts can be briefly summarised. Two Council Directives of the EEC prohibited the administration to animals of certain hormonal preparations for fattening purposes. The second Directive required the member States to ensure that official on-the-spot random controls were made for the presence of the prohibited substances and to conduct, through the appropriate authority, an investigation at the farm of origin to determine the reason for the presence of the substances. The Minister, in purported exercise of the powers conferred on him by s. 3 of the 1972 Act, made regulations providing that the possession of the proscribed substances was to be an offence. They also enabled a judge of the District Court or Peace Commissioner to issue a search warrant where there was reasonable ground for suspecting that a person was in possession of one of the prohibited substances. The Regulations further provided that the time limit under the Petty Sessions (Ireland) Act 1851, under which proceedings for summary offences had to be instituted within six months, was not to apply and that the proceedings could be commenced at any time within two years after the date of the offence.
78. The applicant was a farmer who was prosecuted under the regulations, following a search of his premises on foot of a search warrant granted by a District Court judge. He instituted proceedings seeking, inter alia , a declaration that the provisions of s. 3 were invalid having regard to the provisions of the Constitution, together with a declaration that the regulations were, in consequence, ultra vires . It was held in the High Court that so much of s. 3(2) of the 1972 Act as entitled a Minister by regulation to repeal or amend a previous law was unconstitutional and that, accordingly, the regulations were of no effect.
79. The Minister and the Attorney General then appealed to this court. The court considered first the constitutionality of s. 3 of the 1972 Act and allowed the appeal of the Minister and the Attorney General, the judgment of the court being delivered by Finlay C.J. It then went on to consider an alternative argument advanced on behalf of the applicant that, assuming s. 3 to be constitutionally valid, the regulations were nonetheless ultra vires .
80. Giving the judgment of the court, Finlay C.J. said that the obligation of membership would necessitate the facilitating of laws enacted, acts done or measures adopted in some instances at least – and possibly in a great majority of instances – by the making of ministerial regulation rather than legislation of the Oireachtas. In the result the power to make regulations conferred by s. 3(2) was immune from constitutional challenge.
81. There follows a passage in the judgment which is of critical importance in the context of the present case:
“Insofar as it may be possible to point to hypothetical instances of certain types of laws, measures or acts of the Community or Union which in their implementation or application within the national law might not, as to the method of implementation or application, be necessarily carried out by ministerial regulation, but rather should have been carried out by enactment of law by the Oireachtas, the court is satisfied, without deciding that such instances do occur, that the principles laid down by this court in the decision of East Donegal Co-operative Livestock Marts Limited v. Attorney General (1970) IR 317, must be applied to the construction of the impugned subsection in the manner in which it was applied by the decision of this court in Harvey v. the Minister for Social Welfare (1992) IR 232 to the construction of the section of the statute impugned in that case, namely, s. 75 of the Social Welfare Act, 1952. That principle is that it must be implied that the making of regulations by the Minister, as is permitted by the section, is intended by the Oireachtas to be conducted in accordance with the principles of constitutional justice, and therefore that it is to be implied that the Minister shall not in exercising the power of making regulations pursuant to the section, contravene any provisions of the Constitution.
“If therefore in such an instance challenge were to be made to the validity of the ministerial regulation, having regard to the absence of necessity for it to be carried out by regulations instead of legislation and having regard to the nature of the content of such regulation, it would have to be a challenge made on the basis that the regulation was invalid as ultra vires being an unconstitutional exercise by the Minister of the power constitutionally conferred upon him by the section.”
82. As that passage indicates, there are two broad categories of cases in which a regulation made in purported exercise of the powers conferred by s. 3 might be found to be ultra vires the powers conferred on Ministers by s. 3. The first category would be cases in which the making of the regulation was found not to be “necessitated” by the obligations of membership referred to in Article 29.4.5º and to have violated some constitutional right of the plaintiff. The challenge in such a case would be no different from the challenge mounted to an Act of the Oireachtas allegedly necessitated by the obligations of membership which prima facie violated a constitutional right of the plaintiff. The second category of cases in which such a challenge could be successfully mounted to a Regulation is where the implementation of a Directive or defined parts of an EC or EU Regulation by ministerial regulation rather than an Act of the Oireachtas would be in conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and would not be saved by the provisions of Article 29.4.5º. That would arise in a case where the ministerial regulation went further than simply implementing details of principles or policies to be found in the Directive or Regulation in question and determined such principles or policies itself and the making of the Regulation in that form, rather than in the form of an Act of the Oireachtas, could not be regarded as necessitated by the obligations of membership. That this is what was intended to be conveyed by that passage in the judgment of the court is, I think, made clear when one comes to consider the judgments of the court on the vires issue in that case and, in particular, the judgment of Denham J.
83. Blayney J. (with whom Finlay C.J. and OFlaherty and Egan JJ. agreed), pointed out in the first instance that the requirement in the Directive for on-the-spot random controls could not be effected unless power was given to enable a compulsory search to be made of farms where animals were kept. It followed that so much of the regulation as authorised the issuing of such warrants by the District Court was necessitated by the provisions of the Directive.
84. As to the extended time limit for the institution of criminal proceedings and the amendment purportedly affected for that purpose by the regulations of the time limit under the Petty Sessions Act, 1851, Blayney J. said that it was accepted that the creation of offences by the regulations was required for the implementation of the relevant Directives. He also pointed out that there was uncontested evidence that the six months limitation period for the institution of proceedings under the Petty Sessions (Ireland) Act, 1851 would in many instances be too short and he said that it followed that the Minister had power to provide for a longer period and so had power to extend the six months to two years.
85. Blayney J. went on to reject a submission by Counsel for the applicant in that case that, because Article 189 of the Treaty of Rome left to the State the choice of the form and methods of implementing a directive, what was done by way of implementation was not necessitated by the States obligation of membership. In a passage of some significance in the context of the present case, he added:-
“The article obliges the State to implement the directive and equally obliges the State, in exercise of the discretion given to it, to choose an appropriate method of implementation. If the State were free not to implement the directive, then clearly, if it were to do so, it would be a voluntary act not necessitated by the obligations of membership and would not be protected by Article 19.4.5 º of the Constitution. But the State is not free. It is obliged to implement the directive and so is obliged to choose a method of implementation and, provided the method it chooses is appropriate for the purpose of satisfying the obligation of the State and the measures it incorporates do not go beyond what is required to implement the directive, it is correctly characterised as being necessitated by the directive.”
86. In her judgment, Denham J, with whom Finlay C.J., OFlaherty J. and Egan J. also agreed, said that the fact that the creation of a right of search and the amendment of the Petty Sessions (Ireland) Act, 1851 were “necessitated” under the Directive, was not the end of the matter. Article 189 left to the national authorities the choice of form and method and, in choosing the form or method, the Minister must have due regard, not merely to Article 29.4.3º of the Constitution, but also to Article 15.2. The learned judge went on:-
“If the Directive left to the national authority matters of principle or policy to be determined, then the ‘choice of the Minister would require legislation by the Oireachtas. But where there is no case made that principles or policies have to be determined the national authority, where the situation is that the principles and policies were determined in the Directive, then legislation by a delegated form, by regulation, is a valid choice …”
87. She went on to point out that the appropriate test was as set out by O’Higgins C.J. in Cityview Press . She added:-
“Applying the test to this situation the test is whether the ministerial regulations under s. 3 of the Act of 1972 are more than the mere giving effect to principles and policies of the said Act and the Directives, which are part of domestic law as to the result to be achieved.”
88. In a passage which is again of significance in the context of the present case Denham J. said:-
“In the Directives herein the policies and principles have been determined. Thus there is no role of determining policies or principles for the Oireachtas. While the Directive must be implemented there is no policy or principle which can be altered by the Oireachtas, it was already binding as to the result to be achieved.
“That being the case the role of the Oireachtas in such a situation would be sterile. To require the Oireachtas to legislate would be artificial. It would be able solely to have a debate as to what has already been decided, which debate would act as a source of information. Such a sterile debate would take up Dáil and Seanad time and act only as a window on community directives for the members of the Oireachtas and the nation. That is not a role envisaged for the Oireachtas in the Constitution.”
89. It follows that, in the present case, the first enquiry must be as to whether the implementation of the EC Regulation by legislation, whether in primary or secondary form, was necessitated by the obligations of membership within the meaning of Article 29.4.5º of the Constitution. It is clear that it was.
90. Article 7.1 expressly required the making of detailed rules by the member States as to the transfer of quotas with a holding in the case of its sale, lease or transfer by inheritance to purchasers. To that extent at least, Ireland was under an obligation to adopt such detailed rules and it was not contended on behalf of the appellants that this could have been achieved by administrative decisions, rather than legislation, either primary or secondary in form, which was binding in law on all those affected whether as persons entitled to quotas, producers of milk or purchasers of milk or milk quotas.
91. The second enquiry in the present case is as to whether, given that the making of detailed rules in legislative form, to at least that extent, was necessitated by the obligations of membership, their being made in the form of S.I. 2000 other than by an Act was in conflict with the exclusive legislative role of the Oireachtas under Article 15.1 and was not necessitated by the obligations of membership.
92. As the submissions on behalf of the parties demonstrate, there are two routes by which a conclusion can be reached on this issue. One can initially decide whether the making of the regulation in the form of a statutory instrument rather than an Act of the Oireachtas was “necessitated” by the obligations of membership. If it was, then it is clearly unnecessary to consider whether it is in conflict with Article 15.2 or, for that matter the Articles guaranteeing the private property rights of the applicants. Alternatively, one can determine first whether it violates either Article 15.1 or the private property rights or both of them. If the latter course were adopted, and the conclusion were reached that no breach of the Constitution had been established, it would be unnecessary to consider whether enactment in the form of a regulation rather than by an Act was necessitated by the obligations of membership.
93. Ultimately, however, it is immaterial which of these alternative approaches is adopted, because it is almost beyond argument that the choice of a statutory instrument as a vehicle for the detailed rules rather than an Act was not in any sense necessitated by the obligations of community membership. There would appear to be no difference in principle between the obligation on a member State to implement a Directive and the corresponding obligation under a Regulation, such as the EC Regulation in the present case, to adopt detailed rules for the implementation of specified parts of the Regulation. In each case, while the member State is obliged to implement the Directive or the specified part of the Regulation, the choice of form and method for implementation is clearly a matter for the member State.
94. The law was stated as follows by the Court of Justice in Eridania .v. Minister of Agriculture and Forestry :
“The fact that a regulation is directly applicable does not prevent the provisions of that Regulation from empowering a community institution or a member State to take implementing measures. In the latter case the detailed rules for the exercise of that power are governed by the public law of the member State in question ; however, the direct applicability of the measure empowering the member States to take the national measures in question will mean that the national courts may ascertain whether such national measures are in accordance with the content of the community regulation.” (Emphasis added.)
95. I have already referred to the submission advanced on behalf of the appellants in this case that, in so far as the reasoning in Meagher suggested that the power to make Regulations under s. 3 of the 1972 Act could be availed of by a Minister where it was “convenient” or “desirable” so to do, it should not be followed. I am satisfied, however, that neither the judgment of the court nor the judgments of Blayney J. and Denham J. on the vires issue lend any support to the proposition that, in cases where it is convenient or desirable for the community measure to be implemented in the form of a Regulation rather than an Act, the making of the Regulation can for that reason alone be regarded as “necessitated” by the obligations of membership. Thus, while it appears from the judgment of the court that an argument was advanced on behalf of the respondents in that case that the necessity for “expedition” in the implementation of a Directive would justify its implementation in the form of Regulation rather than an Act, such a submission, as a general proposition, would, in my view, be unsustainable and derives no support from the judgments in Meagher. Doubtless, where no policy choices are left to the member State, expedition is one of the factors which may legitimately be taken into account in deciding to opt for the making of a Regulation rather than the enactment of primary legislation, but it would be a serious overstatement to say that it justifies the making of regulations rather than the enactment of an Act in the case of every Directive or EU Regulation and again that is clearly not consistent with what was held by this court in Meagher.
96. I have reached these conclusions without regard to the change of wording in the relevant bill from “consequent on” to “necessitated”.
97. It follows that, in the present case, it could not be said that the making of the rules in the form of S.I. 2000 rather than an Act was necessitated by the obligations of membership and the essential enquiry must be as to whether the Minister in making S.I. 2000 was in breach of Article 15.1 of the Constitution.
98. In determining that issue, it is accepted that the appropriate test is as set out by OHiggins C.J. in Cityview Press where he stated:-
“In the view of this court, the test is whether that which is challenged as an unauthorised delegation of parliamentary power is more than a mere giving effect to principles and policies which are contained in the statute itself. If it be, then it is not authorised; for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so under the Constitution. On the other hand, if it be within the permitted limits – if the law is laid down in the statute and details only are filled in or completed by the designated Minister or subordinate body – there is no unauthorised delegation of legislative power.”
99. However, in applying that test to a case in which the regulation is made in purported exercise of the powers of the Minister under s. 3 of the 1972 Act, it must be borne in mind that, while the parent statute is the 1972 Act, the relevant principles and policies cannot be derived from that Act, having regard to the very general terms in which it is couched. In each case, it is necessary to look to the Directive or Regulation and, it may be, the treaties in order to reach a conclusion as to whether the statutory instrument does no more than fill in the details of principles and policies contained in the EC or EU legislation.
100. Thus, there are no doubt many cases, of which Meagher was one, where no choice has to be made by the member State as to the appropriate policy to be implemented: the policy in that case was unmistakably the outlawing of the hormonal substances in question and the giving of the necessary powers of search and prosecution to the competent authorities in the member States. Nor had the State any discretion as to whether any particular part of the impugned Regulation was to be omitted. In the passage I have cited, Blayney J. emphasises that the implementation of the Directive in that case was in no sense a voluntary act by the member State.
101. In the present case, the EC Regulations, as already noted required the member States to adopt detailed rules as to the transfer of quotas with land and it also required the authorisation of temporary transfers of quotas which producers who were entitled thereto did not intend to use. However, in three areas, it was left to the member States to decide whether they elected to pursue specified courses of action. First, they could effectively derogate from the provisions of Article 7.1 by providing that quotas were not to be automatically transferred with a holding. They could only do so, however, in order to ensure that quotas were solely attributed to active milk producers. The Minister decided to make use of this option by providing in S.I. 2000 that, subject to certain exceptions, quotas were not to be automatically transferred with the land. Since one of the exceptions was in favour of active milk producers, there can be no doubt that the Minister, in making the Regulation in that form, could not be accused of having effected an impermissible derogation from the general provisions of Article 7.1. S.I. 2000 also allowed for exceptions in the case of sales or transfers to specified members of the family of the person entitled to the quota.
102. The member States were also entitled under Article 6 to determine to what extent transfer operations might be renewed. This was availed of by the Minister so as to restrict persons entitled to quotas who had leased their quotas for three successive years from making more than one further lease of the land and quota. Finally, Article 8 enabled the member States to take one or more of five courses of action with a view to completing restructuring of milk production or environmental improvement. One of these was availed of by the Minister to introduce the milk quota restructuring scheme.
103. It seems clear that, had the Minister taken the view that, in the Irish context, the number of persons leasing quotas was so insignificant that regulations designed to eliminate the practice were unnecessary and would only create hardship with little or no corresponding benefit to the operation of the COM in Ireland, he would have been making a valid choice in terms of the EC Regulation and, indeed, of the general policy of the CAP and the COM. If that were not the case, and the elimination of such practices was to be of universal application throughout the Community, no such option would have been afforded to the member States. The same considerations apply to the options as to restricting temporary leases and introducing a milk quota restructuring scheme. It is, of course, the case that, as the evidence of Mr. Evans demonstrates, the election by the Minister to make the choices that he did resulted from the fact that, whatever be the position in other member States, in Ireland the prevalence of the leasing practice was resulting in a less efficient dairying industry with higher production costs.
104. It is undoubtedly the case that the milk quota/super levy scheme is intended to be tightly regulated by the EC institutions and that the manner in which it operates in all the member States is regularly monitored by the Commission. However, that does not alter the fact that, in specific areas, the EC has decided that the manner in which it is to be implemented in the member States is to be left to the member States to determine.
105. As I have already indicated, a Directive, or in this case a Regulation, can be equated to the parent statute in which, in the case of domestic legislation, one would expect to find principles and policies laid down which were then to be implemented in detail by a form of delegated legislation. There is, however, manifestly a significant difference between a Directive or Regulation, which is applicable throughout the fifteen member States of the European Union, and an Act of the Oireachtas the effect of which is confined to a relatively small and homogeneous area within the European Union. In the case of a Regulation which is intended to apply in a number of different regions throughout the European Union in which the conditions of the dairying industry may vary widely, it is not surprising to find that the Regulation, in specified areas, leaves choices as to the nature of the implementing measures to be introduced by the member State. The issue in this case is as to whether the choice of the appropriate measures can be regarded as involving no determination of policy or principle, as that expression has been used in previous decisions of this court.
106. I have experienced some difficulty in arriving at a conclusion as to how this issue is to be resolved. Applying the reasoning which found favour in Meagher, it seems self-evident that there are choices to be made by Ireland, as a member State, in determining how it will implement the Regulation in those areas where it has been afforded a discretion. Once it is acknowledged that rules of this nature may be implemented in a manner requiring parliamentary scrutiny and that implementation by ministerial regulation is not necessitated by our membership of the European Union, it gives rise to natural misgivings to find that there is no role for the democratically elected institutions of the State, other than the limited one under s. 4 of the 1972 Act. I am, however, persuaded by the analysis carried out by Fennelly J. in the judgment that he will deliver that, in the case of the operation of the super levy scheme, the choices as to policy available to the member States have in truth been reduced almost to vanishing point. As he points out, the scheme which has given rise to these proceedings was essentially the creation of the European Union and, if one seeks to determine the principles and policies which underlie it, one must look, not to any parent legislation in Ireland, but to the treaties of the European Union and the Regulations and Directives which have established the complex machinery of the CAP and the common market in milk. It follows that the making of the Regulation was not an impermissible exercise of the legislative role of the Oireachtas and that the appellants contentions to the contrary are not well founded.
107. There remains the question as to whether the Regulations also constituted an unjust attack on the alleged property rights of the applicants in contravention of Articles 40.3.1º and 2 and 43 of the Constitution. I have no doubt that the Regulations do not violate any property rights within the meaning of the relevant articles of the Constitution. Even if one were to adopt the most expansive view of what is meant by a right of property within the meaning of those articles and extend it beyond the well accepted species of property under our law – real and personal property, including, under the latter category, choses in action – it could still in no sense be equated to a right of property.
108. It seems to me unnecessary in this context to consider whether rights in the nature of licences conferred by the law in relation to particular property, such as planning permissions or licences for the sale of alcohol, constitute property rights. The quotas to which the applicants were entitled in this case are not licences or permits which may enhance the value of property which they own or occupy. The applicants may produce as much milk as they please and require no licence from any authority so to do.
109. The attempts by the EEC to redress the consequences of the policy of guaranteeing the price of milk in the Community led to the super levy scheme, a regulatory regime intended to redress the imbalance in the market brought about by the guaranteed price policy. That in turn resulted in milk producers, including the applicants, being entitled to sell their milk up to a specified level without incurring the super levy which would make production uneconomic. Manifestly, such a regulation of the market in milk products could always be altered to the economic disadvantage of those, who, like the applicants, had previously benefited from it, but it is a singularly inapt use of language to describe that result as a violation of property rights.
110. The fact that the right in question may effectively be disposed for cash does not mean that it is a property right. A person who is standing in a queue to buy a particular commodity and gives up his place to someone else for cash would not appear to be doing anything unlawful, but he is most assuredly not disposing of a property right, merely his right to occupy that particular place on public or private land at that particular time. Nor do I find that any assistance is to be derived from comparisons with patents, trademarks or copyright rights, which under our legal system are nowadays generically described as “intellectual property rights” . Systems of law in developed societies invariably protect those who produce such intangible assets in the expectation of reward by creating a discrete structure of legal protection, embodied in our case in the relevant statutes. They are not remotely comparable in my view to the opportunities for profit presented by a regulatory scheme designed for the benefit of subsidised producers.
111. It is accordingly unnecessary, in this context, to consider whether, in any event, any supposed infringement of property rights under Irish law was necessitated by the obligations flowing from membership of the European Union.
112. The position under community law must also be considered, since it is clear that whether the rights of property safeguarded by the community legal order have been infringed in any particular case is a question to be determined in accordance with that law.
113. The law was made abundantly clear by the Court of Justice in R. .v. Minister of Agriculture, ex parte Bostock where it was said that:-
“The right to property safeguarded by the community legal order does not include the right to dispose, for profit, of an advantage, such as the reference quantities allocated in the context of the common organisation of a market, which does not derive from the assets or occupational activity of the person concerned.”
114. That statement of the law seems to me to accord in every important respect with the position under our Constitution. The comments of the Advocate General in Damand .v. Haubtzollampt Trier suggesting a different approach have not been endorsed by the Court of Justice.
115. Although it was urged on behalf of the applicants that Bostock did not wholly shut out the possibility of a claim based on what was claimed to be a compulsory acquisition of the right in question, it is clear that, if the entitlement to a milk quota is not a right of property, it is immaterial whether what was involved in this case constituted a compulsory acquisition of the right in question. Moreover, in circumstances where, as here, the applicants were fully entitled to continue availing of their milk quotas if they resumed milk production, however inconvenient or difficult that might have been in their individual circumstances, it could hardly be plausibly contended that any property right they might have had had been compulsorily acquired. Nor is the right in any event necessarily acquired by the State or any of its organs. While the Minister is entitled to fix a price for the transfer of the quota to another person which is below what it would fetch in the market, the applicants are hardly in a strong position to complain of such an interference with the forces of the market.
116. I would dismiss the appeal and affirm the order of the High Court.
THE SUPREME COURT
No 340/2000
Keane C.J.
Denham J.
Murphy J.
Murray J.
Fennelly J.
BETWEEN/
NICHOLAS PHILIP (otherwise MARTIN) MAHER,
MALACHY BRETT and RITA RYAN
APPLICANTS/APPELLANTS
and
THE MINISTER FOR AGRICULTURE, FOOD AND
RURAL DEVELOPMENT, IRELAND AND
THE ATTORNEY GENERAL
RESPONDENTS
Judgment of Mrs. Justice Denham delivered on 30th day of March, 2001.
1. Appeal
117. This case arises out of an application by Nicholas Philip (otherwise Martin) Maher, Malachy Brett and Rita Ryan, the applicants and appellants, hereinafter referred to as the applicants, against the Minister for Agriculture, Food and Rural Development, Ireland and the Attorney General, respondents, hereinafter referred to as the respondents. The application for relief was refused by the High Court (Carroll J.) on 16th December, 2000. Against that order and the judgment delivered on 15th December, 2000 the applicants have appealed to this Court. This application arises by way of judicial review. In essence it is the applicants case that the Minister for Agriculture, Food and Rural Development, hereinafter referred to as the Minister, did not have legal authority upon which to make the European Communities (Milk Quota) Regulations 2000 (S.I. No. 94 of 2000), hereinafter referred to as Regulations 2000.
2. Judicial Review
118. On 20th April, 2000 the High Court (OCaoimh J.) granted leave to the applicants to apply by way of application for judicial review for the following reliefs:
1. A declaration that Regulations 2000 are ultra vires the Minister and have no legal force or effect.
2. A declaration that Regulations 2000 failed to respect the principle of separation of powers and the provisions of Articles 5, 6 and 15.2.1. of the Constitution of Ireland.
3. A declaration that article 8a of Council Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 as inserted by article 1(10) of Council Regulation (E.E.C.) No. 1256/1999 of the 17th May, 1999, does not entitle the Minister to introduce by secondary legislation, rather than primary legislation, the abolition of milk quota holders right to sell or lease a milk quota with land on the open market.
4. A declaration that the purported abolition by the Minister of a milk quota holders right to sell or lease a milk quota with land on the open market constitutes an unjust attack on the property rights of the applicants guaranteed by Article 40.3.1. and 2 and Article 43 of the Constitution of Ireland.
5. A declaration that the purported abolition by the Minister of a milk quota holders right to sell or lease a milk quota with land on the open market is a violation of the applicants rights under the European Convention on Human Rights, including article 6(1) and article 1 of the First Protocol thereof, which said rights form part of the general principles of law protected by the law of the European Union.
6. If necessary, an injunction, including such interim and interlocutory reliefs as may be appropriate, restraining the Minister from enforcing or attempting to enforce the provisions of Regulations 2000 in regard to any sale or lease of land and milk quota to which the applicants may become a party.
119. The respondents opposed the applicants application for judicial review, the main grounds of opposition being:
a) Regulations 2000 are intra vires the powers of the Minister under s. 3 of the European Communities Act, 1972.
b) The exclusive purpose of Regulations 2000 is to enable the regulations relating to the common organisation of the market in milk and milk products and in particular Council Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 as amended and Commission Regulation (E.E.C.) No. 536/93 of the 9th March, 1993 as amended to have full effect in Ireland and to provide for such incidental supplementary and consequential matters as appear to the Minister to be necessary for the purpose of Regulations 2000.
c) Regulation 3950/92 requires Member States to make detailed rules relating to the transfer of milk quotas pursuant to the transfer of ownership in the relevant lands or to or from the national reserve. Accordingly, detailed transfer rules are necessary for the purpose of giving effect to Regulation 3950/92. In the premises, the Minister is authorised by s. 3 of the European Communities Act, 1972 to make such detailed transfer rules by statutory instrument.
d) The respondents acknowledge that Regulation 3950/92 and in particular articles 7(1), 8 and 8a(b) confers discretion on Member States as to the rules relating to transfer of quotas but contend that such discretion is limited. The discretionary choices may only be exercised in relation to limited subject matter and only for the express purposes specified in Regulation 3950/92 and in accordance with the policy, principles and terms of the said regulation.
e) The discretions conferred on Member States by Regulation 3950/92 in relation to the transfer of quota with or without land, do not prevent the Minister giving full effect to Regulation 3950/92 in Ireland by statutory instrument made pursuant to s. 3 of the European Communities Act, 1972.
f) The respondents deny that the effect of Article 7(1) of Regulation 3950/92 as replaced by Article 1.(8) of Council Regulation (E.C.) No. 1256/1999 of the 17th May, 1999 and Article 8a(b) of Regulation 3950/92 (as inserted by Article 1.(10) of Regulation 1256/1999) is to return or vest legislative competence in the Member States in respect of key aspects of the milk quota/ super-levy regime including rules governing the transfer of milk quotas.
g) Without prejudice to the foregoing, the respondents contend that any provisions of Regulations 2000 which are not necessary for the purpose of
giving full effect to Regulation 3950/92 in Ireland do not contravene Article 15.2.1. of the Constitution.
. . .
h) The respondents deny that the principles and policies according to which the Minister is obliged to exercise the discretionary powers conferred on Ireland by Regulation 3950/92 in relation to the transfer of quota with or without land, are to be found exclusively in Article 7(1) and Article 8a(b). The said powers must be construed in accordance with Council Regulation (E.C.) No. 1255/1999 of 17th May, 1999, Regulation 3950/92, the amending Regulations and in particular Regulation 1256/1999 and the recitals to such Regulations.
i) Regulations 2000 contain only those provisions which the Minister considered necessary or appropriate, having regard to the current situation in the market in milk and milk products in Ireland for the purpose of giving full effect to the E.U. regulations relating to the common organisation of the market in milk and milk products and in particular Regulation 3950/92 as amended.
j) It is denied that the Minister in making Regulations 2000 contravened Articles 5 or 6 of the Constitution.
. . .
k) In the making of Regulations 2000 the Minister took into account the position and, in many instances, competing interests of different persons affected or potentially affected by Regulations 2000. The transfer provisions in Regulations 2000 represent the Ministers determination as to the measures which are necessary and appropriate having regard to the differing interests involved in accordance with the limited discretion conferred on him by the E.U. regulations.
l) The respondents deny that the framework governing the transfer of milk quotas provided for in Regulations 2000 and in Regulation 3950/92 (as amended by Regulation 1256/1999) constituted an unjust attack on the applicants property rights under Article 40.3.1. and 2 and Article 43 of the Constitution of Ireland.
m) The respondents deny that a milk quota is a property right for the purpose of the provisions of the Constitution of Ireland. On the contrary, a milk quota is an instrument used as a market management mechanism as part of the common organisation of the market in the milk sector initially introduced by Council Regulation (E.E.C.) No. 856/84 of 31st March, 1984. The respondents contend that the right or entitlement to dispose for a profit of an advantage such as a milk quota allocated in the context of a common organisation of a market which does not derive from the assets or occupational activity of the person concerned does not constitute a property right under Article 40.3 and Article 43 of the Constitution of Ireland, under the law of the European Union or for the purposes of the European Convention on Human Rights and Fundamental Freedoms (the “European Convention”).
n) Further, or in the alternative if a milk quota is a property right as alleged (which is denied), the respondents deny that the measures governing the transfer of milk quotas contained in Regulations 2000 constitute an unjust attack on the applicants property rights in the manner alleged. On the contrary, the respondents contend that the said rights may be regulated in accordance with the principles of social adjustment and insofar as the applicants property rights have been restricted or delimited as alleged (which is denied), such restrictions and/or delimitation are justified by the exigencies of the common good in accordance with Article 43.2 of the Constitution. Furthermore the respondents contend that the alleged restrictions correspond to the objectives of the regime provided for by Regulation 3950/92 (as amended by Regulation 1256/1999).
3. The High Court
120. The application was heard in the High Court, judgment being delivered by Carroll J. on 15th December, 2000 as follows:-
“In my view the discretions which are left in the member states are all within the principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union. The regulations in S.I. 2000 do not go beyond what is required. There are no principles or policies to be determined as they are embodied in the various development of the scheme since 1984.
Article 6.1 is mandatory (temporary transfer of milk quotas for twelve months). Article 6.2 gives a discretion not to implement it. In my view the failure to exercise the discretion is not the exercise of a discretion. It is simply a case of ignoring the discretion and proceeding with the mandatory implementation of Article 6.1.
The choices given in the implementation of mandatory leasing in the second paragraph of Article 6.1 do not constitute any departure from the overall policies of the milk levy scheme. It is provided that regard can be had to the category of producer, the transfer operations can be limited at the level of the producer within regions and the extent which transfers can be renewed may be determined.
In the case of Article 7.1 this did involve the exercise of a discretion under Article 8(a) not to implement it. This broke the link between land and milk quotas (subject to exceptions) and is contained in Regulation 5.1 of S.I. 2000. But the discretion had to be exercised, as stated in Article 8(a) “ acting in compliance with the general principles of community law ” and “ with the aim of ensuring that reference quantities are solely attributed to active milk producers”.
121. The Minister was entitled to make the decision that quotas should go the (sic) active milk producers which was in accordance with the stated policy under the milk quota council Regulations.
122. The actions which could be taken under Article 8 of the council regulations were to be taken “with a view to restructuring of milk production or to environmental improvements” and “taking account of the legitimate interests of the parties”.
123. While the regulations are complicated they do take account of the legitimate interest of parties and they are framed with a view to completing the restructuring of milk production.
124. In my view, S.I. 2000 even though it involved the making of choices within the framework of the principles and policies of the milk quota scheme, was necessitated by the obligations of membership of the E.U. Precisely because those choices were within the principles and policies of the milk quota scheme, it can equally well be viewed as permitted secondary legislation which is not contrary to Article 15.2.1. of the Constitution.
125. As to the claim that the right to a milk quota is a property right within the meaning of Article 40.3.2 and Article 43 of the Constitution, regard must be had to the decision of the European Court of Justice in R. v. Ministry of Agriculture
Ex parte Bostok (sic) (1994) E.C.R. 1955 where it was held at p. 1984:
“the right to property safeguarded by the community legal order does not include the right to dispose for profit of an advantage such as the reference quantities allocated in the context of the common organisation of a market which does not derive from the assets or occupational activity of the person concerned.”
126. The Applicants seek to establish that they have greater protection under the Constitution than under community law. In my view the nature of the milk quota which is created by European Law must bear the same meaning in domestic law as in the legal order of the European Union. The purpose of the creation of the milk quota system was to regulate and restructure milk production within the union. It was not for the creation of a new form of landlordism which would allow the owner of a quota to live off the rent obtained there from without producing a single gallon of milk. In my view this ground also fails.”
4. Grounds of Appeal
127. Against the order and judgment of the High Court the applicants have appealed on a number of grounds. The most important of these being the grounds that the learned trial judge erred:
1. In holding that the discretions left to the Member States under Council Regulation No. 3950/92 as amended by Council Regulation No. 1256/1999 are all within the principles and policies determined by the Council of Ministers in the organisation of the milk market in the European Union.
2. In holding that Regulations 2000 do not go beyond what is required to implement Council Regulation No. 3950/92, as amended by Council Regulation No. 1256/1999.
3. In holding that there were no principles or policies to be determined in Regulations 2000 as they are embodied in the various developments of the milk quota scheme since 1984.
4. In holding that the failure to exercise the discretion given in article 6(2) of Council Regulation No. 3950/92 is not the exercise of a discretion, but is simply the case of ignoring the discretion and proceeding with the mandatory implementation of Article 6(1) of the said regulations.
5. In holding that the choices given in the implementation of temporary leasing in the second paragraph of article 6(1) of Council Regulation No. 3950/92 do not constitute any departure from the overall policies of the milk levy scheme.
6. In holding that the Minister was entitled to make the decision that quotas should go to active milk producers which was in accordance with the stated policy under the milk quota Council regulations.
7. In holding that Regulations 2000 do take account of the legitimate interests of parties.
8. In holding that Regulations 2000 were necessitated by the obligations of membership of the European Union even though they involve the making of choices within the framework of the principles and policies of the milk quota scheme.
9. In holding that the choices were within the principles and policies of the milk quota scheme.
10. In holding that Regulations 2000 can be viewed as permitted secondary legislation which is not contrary to Article 15.2.1 of the Constitution.
11. In failing to hold that the effect of article 7(1) and article 8a(b) of Council Regulation No. 3950/92 is to return and vest legislative competence in the Member States in respect of key aspects of the milk quota regime, including the rules governing the transfer of milk quotas.
12. In failing to hold that neither Article 7(1) nor Article 8a(b) of the said Council regulation contained sufficient principles and policies to justify the making of Regulations 2000.
13. In failing to hold that the exercise of the discretions contained in Council Regulation No. 3950/92, as amended by Council Regulation No. 1256/1999, is not necessitated by the obligations of membership of the European Union or of the Communities.
14. In failing to hold that the making of Regulations 2000 contravenes Articles 5, 6 and 15.2.1. of the Constitution.
15. In failing to hold that Regulations 2000 constitute a purported exercise of legislative power by the Minister which is not permitted under the Constitution.
16. In failing to hold that the provisions of Regulations 2000 are ultra vires the first-named respondent and are of no legal force or effect.
17. In holding that the nature of a milk quota must bear the same meaning under the Constitution as in the legal order of the European Union and that a right to a milk quota is not a property right within the meaning of Article 40.3.2 and Article 43 of the Constitution.
18. In failing to hold that Regulations 2000 constitute an unjust attack on the property rights of the applicants guaranteed by Article 40.3 and Article 43 of the Constitution.
5. Submissions of the Applicants
128. Comprehensive written submissions were filed on behalf of the applicants which were supplemented by oral argument from counsel. Mr. Gerard Hogan, S.C., counsel for the applicants, highlighted the relevant regulations, focused on the ‘necessitated point, considered the matter of permissible delegated legislation, touched on the issue of parliamentary debates and made submissions on the property rights dimension.
129. Counsel referred to Article 29.7 of the Constitution of Ireland and submitted that the word “necessitated” therein is a straightforward word meaning legally obliged, a clear legal provision. Counsel argued that Article 29.4.6 of the Constitution has to be read in harmony with Article 29.4.7. He submitted that the object was to protect a national legislature as far as possible. Counsel argued that 29.4.7 is the general rule, that it must be necessitated, and 29.4.6 is an exception.
130. Counsel referred to what he submitted were three key authorities. He referred to Lawlor v. Minister for Agriculture , [1990] 1 I.R. 356 , which he argued was either wrongly decided or not applicable to the present case; Greene v. Minister for Agriculture [1990] 2 IR 17, which he distinguished; and Meagher v. Minister for Agriculture [1994] 1 I.R. 329 . Insofar as Meagher is an authority for an interpretation of “necessitated” which also extends the constitutional immunity to domestic measures which are simply “convenient” or “desirable” then he submitted that the appellants did not resile from respectfully submitting that such reasoning ought not now to be followed. He argued that such a conclusion is at odds with the plain language of Article 29.4.7. He submitted that the word “necessitated” is not ambiguous and plainly implies a legal obligation only. Even if “necessitated” were not so unambiguous, the Meagher interpretation, he submitted, is at odds with the underlying purpose of Article 29.4.7 which is to allow for the transfer of legislative, executive and judicial sovereignty to the European Union only where this is legally obligated. But that where it is not so obligated, Article 29.4.7 makes it equally plain that the Constitution reigns supreme. He argued further that the Constitution must be read harmoniously and in light of all the interlocking provisions especially the interaction of Article 29.4.6 and Article 29.4.7. He submitted that it is generally accepted that Article 29.4.6 was formulated to deal with the increasing strain which the flexibility provisions of the Treaty of Amsterdam and the increasing variable geometry of European law, of which the 1999 Council Regulations are just a specialised example, were placing on the necessitated obligations wording contained in Article 29.4.7. He submitted that Article 29.4.6 is designated to allow the State to exercise certain specific options and discretions arising under the Treaty of the European Union and the treaties establishing the European Communities provided that the prior approval of both Houses of the Oireachtas is forthcoming. He stressed that the fact that Article 29.4.6 permits the State to exercise certain options and discretions subject to the key parliamentary safeguards reinforces the submission that Article 29.4.7 ought not to be given an interpretation which would permit the further reduction of legislative sovereignty to the European Union in the absence of an expressed Union or Community legal obligation to this effect. Counsel submitted that in Meagher the Supreme Court upheld the constitutionality of s.3 of the European Communities Act, 1972 as necessitated by the obligations of Community membership on the ground that it was part of the necessary machinery which became a duty of the State upon its joining the Community and therefore necessitated by that membership; that the Court had envisaged circumstances in which the exercise of that power would be unconstitutional; and that the present case involved a challenge to the Ministers powers to make regulations under s.3 of the Act of 1972. Counsel submitted that in this case the European Union legislation allowed a Member State significant choices in respect of fundamental principles and policies under the 1999 Council Regulations, and, accordingly, he submitted that the implementation of these provisions by means of a statutory instrument was not necessitated within the meaning of Article 29.4.7.
131. Counsel submitted that the 1999 Council Regulations confer such extensive concessions on Member States, together with a wide panoply of choices, that the exercise of the said discretions could not be said to be necessitated by the obligations of Community membership.
132. Thus counsel submitted that insofar as Meagher is an authority for the interpretation of the word ‘necessitated he submitted it was incorrect. However, he referred to the application of the double construction rule and the presumption that the Minister will not make regulations where the appropriate approach is legislation. Counsel argued that such is the case here. That the Minister in making this scheme by statutory instrument was exercising an unconstitutional power and hence in that way his argument comes within the Meagher decision as made.
133. Counsel submitted that there were no adequate principles and policies in European law to enable a statutory instrument to be made by the Minister. He submitted that it would be hard to describe Regulations 2000 by virtue of their size, range of decisions, range of choices, and range of policy aspects, as anything other than legislation. He submitted that it is clear from Regulations 2000, as far as land transfers and the operation of the restructuring scheme are concerned, the Minister had elected to make substantial and important policy choices. He gave the following examples:
a) The extent to which quotas would transfer with land upon a sale, lease or inheritance when deciding the category of cases in which the link between quota and land provided for in article 7(1) of the 1992 Regulations should not apply.
b) Whether or not to apply to provisions on the transfer of quotas in article 7(1) of the 1992 Council Regulations.
c) Whether or not to provide for a system under which all or part of the transferred quota reverts to the national reserve on the expiration of rural leases or other transactions involving comparable legal effects.
d) The extent to which inter family transfers of land and milk quota are exempt from the operation of the rule that (save in excepted cases) the quota is not reallocated with the sale of land.
e) The definition of an active milk producer and the extent to which such a person may transfer land with quota. He submitted that it is impossible to underestimate the practical significance of the first choice, the effective breaking of the link between land and quota save for family transactions.
134. Counsel also submitted that the Minister exercised substantial policy choices conferred by article 6(1) of the 1992 Regulations (as inserted by the 1999 Regulations) in that he had determined via article 27 of Regulations 2000: a) the category of persons entitled to lease quota on a temporary basis, b) the number of years for which they will be entitled to lease quota and c) the circumstances in which the Minister can derogate from the rules which he has prescribed. Counsel submitted that fundamental principles of Irish constitutional law require that policy decisions and choices must be made by the Oireachtas and not delegated to the Minister and his civil servants. He said that it was highly implausible that the drafters of Article 29.4.7 ever envisaged that the system of parliamentary democracy enshrined by Articles 5,6 and 15 of the Constitution would be undermined and that decisions of fundamental importance could be taken by the executive rather than the legislative branch of government.
135. At the core of counsels argument was the analysis that there is a renvoi back to national law. That if the State elects to take this action it must do so by legislation, as there is a renvoi back to the national state. Counsel submitted that the respondents had argued that in this situation the principles and policies are determined, that it is a Community policy. However, counsel argued that, it is clear from the language of article 8.a that this is not so. He referred to the use of the word “may”, and said that if the State wants to take the measures it can, but it is not an implementation of Community policy. Counsel argued that the Minister is legislating in this case, that the Minister is making far reaching radical changes, and that such changes may only be made by the Oireachtas. That here the Minister is making major policy decisions which may only be made by the Oireachtas.
136. Counsel for the applicants stressed that in this case what was for consideration was that European Union legislation had in reality transferred effective law making power back to the State. Counsel referred to the Meagher judgment and relied on the judgment of the Chief Justice where he pointed out that there could be cases where the appropriate mode to give effect to European legislation would not be a statutory instrument, on the East Donegal principle. He submitted that this is such a case.
137. Counsel submitted two representative examples of how there were no principles or policies and why the Minister is legislating. Firstly, he referred to articles 5 and 6 of the statutory instrument, the family transaction. He submitted that this is pure policy. On an analysis of the agricultural community he submitted that there is nothing similar in European law that speaks of that; he submitted that it was a policy judgment which in Ireland was reserved to the Oireachtas. Secondly, he referred to article 6 of the Council regulations, a mandatory system of temporary leasing. Here there is determination of the category of producer. A determination of how temporary leasing should run and for how long. He submitted that there was nothing in article 6 governing this.
138. Counsel made submissions on the extent to which a milk quota is a property right. Counsel submitted that a valuable permission is being effectively extinguished and that in a restructuring scheme there is a form of compulsory purchase where the Minister determines the price. He stated that the Minister is fixing the price substantially below the market price as of 1st April, 2000.
139. Counsel accepted that the European Court of Justice has generally taken a view that milk quotas do not constitute a property right so far as Community law is concerned. However, he submitted that the present case concerns a form of compulsory acquisition by the State of a quota at a price substantially less than the prevailing market value. In these circumstances a milk quota may qualify for protection as a property right which the Member States were obliged as a matter of Community law to protect and he referred to the comments of the Advocate General in Demand v. Hauptzollamt Trier (Case C-186/96) [1998] E.C.R. 1-8529, at p. 8541. Counsel argued that the decision in Bostock did not prevent such a right being regarded as a property right for the purposes of the Irish Constitution. He submitted that this was made clear by the opinion of Advocate General Cosmas in Duff v. Minister for Agriculture (Case C-63/93) [1996] E.C.R. 1-569. In Duff the European Court held that the plaintiffs legitimate expectations at Community law level had not been infringed by the actions of the Minister, but the Advocate General observed at para. 60 that this did not prevent “such a requirement from being founded on principles of national law which, in an appropriate case, may ensure greater protection in this respect than that afforded by the general principles applicable in the Community legal order”.
140. Counsel pointed out that when the case returned to the Supreme Court both OFlaherty J. and Barrington J. for the majority seized upon this passage to justify finding that the Minister had infringed the plaintiffs rights as a matter of Irish public law. Counsel submitted that it would be unrealistic not to regard a milk quota as a valuable asset in its own right, as land itself. If, for example, a chose in action can be regarded as property ( Iarnród Éireann v. Ireland [1996] 3 I.R. 321) there seems little reason by which another valuable and tangible right such as a milk quota should not be so regarded. If a milk quota is such a right then he respectfully submitted that it follows inexorably that Regulations 2000 infringes that right. For example, no matter how excellent the public policy reasons, the Minister could not prescribe a scheme for the forfeiture of unused agricultural land at a price significantly below market value or which seriously inhibited the right to lease such an asset. Yet this is what has been proposed by Regulations 2000 and it is submitted that these provisions are manifestly in conflict with Articles 40.3.2 and 43 of the Constitution.
141. Counsel concluded that:-
a) Neither the making of Regulations 2000 nor their contents are necessitated by the obligations of Community membership within the meaning of Article 29.4.7.
b) Regulations 2000 are ultra vires the provisions of s. 3 of the Act of 1972 inasmuch as the Minister has made policy decisions of the utmost importance regarding the operation of the milk quota regime in Ireland. In doing so the Minister has legislated in contravention of the provisions of Article 15.2.1 of the Constitution.
c) A milk quota is a property right for the purposes of both Community law and Irish constitutional law and Regulations 2000 represent an unjust and unconstitutional attack on these property rights.
142. Counsel submitted that fundamentally this case is not about milk quotas, it is about the separation of powers between the executive and the legislature. It is an example of the democratic deficit. He submitted that the executive has usurped the role of the legislature. He submitted that the case requires the Court to protect the integrity of the democratic system and that key decisions of policy should not be made by the executive. Article 29.4.7 transfers sovereignty to the European Union to the extent legally required. If it is not required it is not necessitated.
6. Submissions on behalf of the Respondents
143. Ms. Mary Finlay, S.C., counsel for the respondents, submitted that it was fundamental to the Ministers position that what is at issue is a European scheme which forms an integral part of the Common Organisation of the Market (C.O.M.) which is part of the Common Agricultural Policy (C.A.P.). She submitted that C.A.P. was created by treaty and that the C.O.M. in milk products is a European scheme created by regulation. Counsel submitted that the Court is required to look at what the Minister is authorised to do. The Minister was given choices as to details only. Counsel pointed out that the milk quota is exclusively within the Community province. There is no legislative function in Ireland.
144. Counsel submitted that insofar as the Supreme Court considers the method chosen by the State to provide detailed implementing rules it is governed by Irish law exclusively. This Court can only find what is the appropriate method by looking at the nature of the Community law that requires the details. Counsel submitted that the European Union regulations are part of the domestic law of Ireland and that they are similar to an enabling act of the Oireachtas. In this instance the regulations exist as part of Irish law and are analogous to an enabling act, that the principles and policies may be found in an enabling act or in regulations. Counsel relied on the principles and policy test. Counsel submitted that the question was whether as a matter of Irish public law the Minister had acted properly.
145. Counsel referred to the Meagher case and the reference therein to the fact that the East Donegal test applies. Counsel accepted that she had to satisfy the Court that the Minister was acting intra vires s.3 by making Regulations 2000 and that he could only do that if he was not invading the power of the Oireachtas under Article 15.2.1. of the Constitution.
146. Counsel submitted that the Minister was not breaching Article 15.2.1, the sole and exclusive power of making laws being vested in the Oireachtas, in this case. Counsel submitted that there was enabling legislation, being the relevant E.U. regulations and ss. 2 and 3 of the European Communities Act, 1972. Counsel submitted that the relevant provisions in considering the principles and policies are: 1) The Treaty provisions of Articles 32 to 38 inclusive, Article 10 (formerly Article 5), and the general obligation on the State to take measures to ensure fulfilment of obligations. 2) The Common Organisation of the Market, Council Regulation (E.C.) No. 1255/1999 of 17th May, 1999. 3) The milk quota regulations, especially Regulation (E.E.C.) No. 3950/92 of 28th December, 1992 and Council Regulation (E.C.) No. 1256/1999 of 17th May, 1999.
147. Ireland is obliged to have in place an effective detailed system for the application of the milk quota system in Ireland. The objective of the milk quota regulations is to put quotas into the hands of milk producers. That is an aim of the milk quota regulations. Therefore the Ministers decision to take measures under Article 8a is part of his obligation to do so, it represents the implementation of the scheme.
148. Counsel referred to Mr. Hogans suggestion that the European Union regulations had returned legislative powers to the Member States, especially the 1999 Regulation. Counsel for the respondents said that no such legislative competence was returned. European law was the origin of the milk quota system. The competence rests exclusively with the European Union to make policy choices to achieve a single market. From the outset the European Union delegated detailed rules to the State. This has continued to date. The State has the function of making detailed rules. The European Union has delegated choices to the Member States. Counsel submitted that when the State is implementing European Union provisions the State is bound by obligations including fundamental rights and to seek to achieve the objectives of the scheme. In this case the Minister has power to make choices. The question for the Court is whether the choices, given to the Minister in the context of the European scheme, are general policy choices.
149. Counsel submitted that the purpose of the milk quota system is part of price stability in C.O.M. and to achieve a fair standard of living for dairy producers. The inter-relationship between the price of a gallon of milk and the quantity of the quota is important.
150. Counsel pointed out that there is a real prospect of the milk quota scheme ending in 2006. It is referred to in the Regulations. Counsel stated that none of plaintiffs are producers. All the plaintiffs have given up milk production. They are outside the parameters of the regulations. Counsel submitted that it is part of the objective of the regulations that persons actively producing milk are persons in whose hands the quota should rest.
151. Counsel did not make the case that the Minister is obliged to make these rules by statutory instrument. Counsel submitted that it was permissible for the Minister to do it by statutory instrument as the principles and policies are clearly set out in the European Union regulations. Counsel did not rely on the necessitated form. If it is not necessitated under Article 29.4.7 the Minister can only make regulations if it does not encroach on the Oireachtas. Counsel for the respondents argued that it did not because the principles and policies are in the regulations. Further, that under Article 10 of the Treaty there is an obligation on Ireland to effectively implement European Union schemes.
152. In relation to the submission that the milk quotas are property rights within the meaning of Article 40.3.2 and Article 43 of the Constitution and that Regulations 2000 constitute an unjust attack on same contrary to such constitutional provisions, counsel submitted that the argument was unstateable. It was submitted that the applicants right to a milk quota is not a property right within the meaning of the Constitution. A milk quota under Irish law must have a similar characteristic to that under Community law as it has been exclusively created by Community law. It is common case that the European Court of Justice has determined that the right to a milk quota is not a property right under Community law and, accordingly, it was contended that it is not a property right within the meaning of the Constitution. It was submitted that even if a milk quota is to be given a separate characteristic under Irish law, it is in accordance with Irish law a licence created by law and subject to an implied condition that the law may change the licence scheme or conditions attaching to such licence. The changes to such a scheme made by Regulations 2000 do not conflict with Article 40.3.2 or Article 43 of the Constitution. Further, it was submitted, Regulations 2000 being necessitated by the obligations of membership of the European Union, Articles 40.3.2 and 43 cannot be relied upon to invalidate any of the provisions thereof, by reason of Article 29.4.7.
7. Decision
153. The kernel of this case is the delegated legislation by the Minister. The question is whether this was a breach of Article 15.2.1 of the Constitution of Ireland. A decision on this matter determines the major issue.
7.i. Nature of the Milk Quota Scheme.
154. This case concerns Regulations 2000, being the European Communities ( Milk Quota) Regulations, 2000 (S.I. No. 94 of 2000). These regulations form part of a scheme relating to milk quotas throughout the European Union. The Minister in making Regulations 2000 did so pursuant to section 3 of the European Communities Act, 1972 for the purpose of giving effect in Ireland to Council Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 establishing an additional levy on milk and milk products (as amended by Council Regulation (E.E.C.) No. 1256/1999 of the 17th May, 1999) and Commission Regulation (E.E.C.) No. 536/93 of the 9th March, 1993 which laid down additional rules on the application of the additional levy.
155. The milk quotas scheme originates in policy established over many decades. After World War II farmers in Western Europe were managing farms in a traditional fashion. There was a need to modernise. The European Economic Community introduced price levels for products, including milk. Europe developed the Common Agricultural Policy (C.A.P.), which involved annual review of common prices in the Community. With this policy there was a rise in production and a secure price for producers for the quota. This C.A.P. was a market policy. A policy for a single market, managed centrally. The E.C. Treaty, Art. 33(1) (formerly 39(1)) sets out the objectives of the C.A.P. as follows:
“(a) to increase agricultural productivity by promoting technical progress and by ensuring the national development of agricultural production and the optimum utilisation of the factors of production, in particular labour;
(b) thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
(c) to stabilise markets;
(d) to assure the availability of supplies;
(e) to ensure that supplies reach consumers at reasonable prices.”
156. In applying the C.A.P. account must be taken of, in accordance with Article 33(2) (formerly 39(2)):
“(a) The particular nature of agricultural activity, which results from the social structure of agriculture and from structural and natural disparities between the various agricultural regions;
(b) the need to effect the appropriate adjustments by degrees;
(c) the fact that in the Member States agriculture constitutes a sector closely linked with the economy as a whole.”
157. The E.C. Treaty provides that to attain objectives (a) to (e), as set out above, a common organisation of agricultural markets must be established. This may be done in a variety of ways. The Community having established a common organisation of the market, Member States are obliged not to undermine that which is established.
158. The C.A.P. fixes prices in some products. This is done in a variety of ways to achieve the objectives of Community policy. The Community institutions have a discretion in the method of achieving the objective. In Balkan-Import-Export GmbH v. Hauptzollamt Berlin- Packhof (Case 5/73) [1973] E.C.R. 1091, at p. 1112 this was described as follows:
“Article 39 of the Treaty sets out various objectives of the common agricultural policy. In pursuing these objectives, the Community Institutions must secure the permanent harmonization made necessary by any conflicts between these aims taken individually and, where necessary, allow only one of them temporary priority in order to satisfy the demands of the economic factors or conditions in view of which their decisions are made.”
159. The matters for determination on this appeal are issues of law – essentially the validity of Regulations 2000. However, the factual and legal background to the milk quota system is relevant and was before the High Court, and this Court, in the affidavit of Patrick Evans, Assistant Principal Officer in the Department of Agriculture, Food and Rural Development.
160. The context of the milk quota scheme was described by Patrick Evans, in his affidavit of 19th May, 2000, at paragraph 6:
“. . . The milk quota or super levy regime is an integral part of the common organisation of the market in the milk sector in the European Union.”
161. At paragraph 9 of his affidavit Mr. Evans describes the milk quota scheme:
162. “Each year the Commission carries out an analysis of the market situation and future outlook with regard to each of the agricultural products governed by a common organisation to the market. The Commissions report of this market analysis is followed by whatever proposals the Commission considers necessary to provide for changes to ensure that the objectives of the regime in individual sectors continue to be met. These proposals are known as the “Price Proposals”. If adopted by the Council the proposals lead to the introduction of new Council regulations or amendments to existing regulations. From time to time the Commission makes proposals for major reforms of the operation of the C.A.P. In 1992, the Council adopted proposals known as the MacSharry Proposals for the reform of the C.A.P. These proposals initially contained certain provisions for the reform of the common organisation of the market in the milk sector. However, these were not adopted by the Council. The proposals ultimately adopted at that time led to very little change in the provisions governing the operation of the market in the milk sector. In 1998 the Commission made further proposals for further major reforms in the operation of the C.A.P. These were known as the Agenda 2000 proposals. The primary influence on the Commission in framing these latter proposals was the likely impact on the operation of the C.A.P. resulting from the expected enlargement of the European Union and of further trade liberalisation arising from negotiations within the World Trade Organisation which were due to commence in 1999. The Agenda 2000 proposals contained proposals for significant changes in the operation of the common organisation of the market in the milk sector.”
163. It was his view that:
“It should be apparent from the foregoing paragraphs that the operation of the common organisation of the market in the milk sector is tightly managed to help achieve market balance and is subject to a constant review. The milk quota/super
levy system has, since its introduction in 1984 before (sic) the most important mechanism for ensuring that the objectives of the C.O.M. are achieved.”
164. He made reference to the agreement reached and implemented in Council Regulations Nos. 1255/1999 and 1256/1999. He referred to article 8a of Regulation 3950/92 (as inserted by Article 1(10) of Regulation 1256/1999) and stated that this is the clear policy of the Member States – the Regulation provided a framework whereby Member States were given choices to ensure that milk quotas would be attributed to active milk producers.
165. The standard practice of this aspect of C.O.M. was explained by Mr. Evans at paragraph 30 of his affidavit thus:
“Under the provisions of Article 8 of Commission Regulation (E.E.C.) No. 536/93 Member States are obliged to inform the Commission of measures adopted for the application of Regulation 3950/92 or any amendment thereto within one month following their adoption. It has become standard practice in these circumstances for Member States to consult with the Commission beforehand on the measures they might propose to adopt for the application of the regime in their respective territories so as to prevent any adverse consequences. The Commission are particularly vigilant in scrutinising implementing measures adopted in Member States in connection with a common organisation of the market established by E.U. regulation. They do this so as to ensure both that the implementing measures are authorised by the relevant E.U. regulations and are not in any way inconsistent with the overall aims and objectives of the particular Common Organisation of the Market. The method of implementation of the Common Organisation of the Market in milk and milk products in Ireland is also subject to review by the European Court of Auditors. Detailed consultations took place between the Department and the Commission concerning the implementation of the changes to milk quota or super levy regime as introduced by Regulation 1256/1999. . . . ”
166. I accept the description of the management and practice of the milk quota scheme as given by Mr. Evans. It illustrates the level of centralised control from the Community institutions.
167. The milk quota scheme is governed fundamentally by Community provisions. The scheme is part of the Common Agricultural Policy and the Common Organisation of the Market. In both broad policies and practical direction it is centrally controlled in Europe.
7.ii. European Regulations
168. Community regulations are binding on Member States and are directly applicable within Member States. They are of general application. They are norms created by the Community. They are used extensively in relation to agriculture. As they are directly applicable they are part of national domestic law automatically: see Variola v. Amministrazione delle Finanze (Case 34/73) [1973] E.C.R., 981 at p. 990 where it was noted by the European Court of Justice that:
“The direct application of a Regulation means that its entry into force and its application in favour of or against those subject to it are independent of any measure of reception into national law. By virtue of the obligations arising from the Treaty and assumed on ratification, Member States are under a duty not to obstruct the direct applicability inherent in Regulations and other rules of Community law. Strict compliance with this obligation is an indispensable condition of simultaneous and uniform application of Community Regulations throughout the Community. ”
169. Regulations, being part of domestic law of the State, may be treated as instruments setting out policies and principles for subordinate legislation. If the principles and policies are set out in the Community regulations then there may be no role for the national parliament to determine principles and policies. If the principles and policies are established in law in the State, albeit in Community regulations rather than domestic legislation, then it is open to the Minister to make the required and technically detailed statutory instruments.
7.iii. Choice
170. Community law does not determine the mode of implementation of the milk quota scheme within the national state. Ireland has the choice of mode of implementation. That choice falls to be made in accordance with Irish public law.
7.iv. Irish Public Law
171. The relevant Irish public law is to be found in the Constitution of Ireland. Article 15.2.1 of the Constitution gives to the national parliament the sole and exclusive power of making laws for the State. No other legislative authority has power to make laws for the State. To this Constitution, as part of the general scheme of national entry to the European Community, have been added Article 29.4.6 and Article 29.4.7. Article 29.4.6 states:
“The State may exercise the options or discretions provided by or under Articles 1.11, 2.5 and 2.15 [of the Amsterdam Treaty] and the second and fourth Protocols set out in the said Treaty but any such exercise shall be subject to the prior approval of both Houses of the Oireachtas.”
172. Article 29.4.7 provides:
“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or of the Communities, or prevents laws enacted, acts done or measures adopted by the European Union or by the Communities or by institutions thereof, or by bodies competent under the Treaties establishing the Communities, from having the force of law in the State.”
173. These matters were analysed in Meagher v. Minister for Agriculture [1994] 1 I.R. 329. In that case I stated at pp. 366-367:
“The separation of powers is a fundamental principle of Bunreacht na h Éireann. The power to legislate for the State is solely within the Oireachtas – save where that authority has been assigned under the Constitution to Community authorities and organs of the State to act in accordance with Community law as integrated into national law.
There was no question in this case that the principles and policies of the directives were not within the Treaties.
In the directives herein the policies and principles have been determined. Thus there is no role of determining policies or principles for the Oireachtas. While the directive must be implemented there is no policy or principle which can be altered by the Oireachtas, it is already binding as to the result to be achieved.
That being the case the role of the Oireachtas in such a situation would be sterile. To require the Oireachtas to legislate would be artificial. It would be able solely to have a debate as to what has already been decided, which debate would act as a source of information. Such a sterile debate would take up Daíl and Seanad time and act only as a window on Community directives for the members of the Oireachtas and the Nation. That is not a role envisaged for the Oireachtas in the Constitution.”
174. Applying the principles and policies test to this case, if the principles and policies are to be found in the European regulations then it is open to the Minister to proceed by way of statutory instrument. If there are choices to be made within a scheme then these choices may not be policy decisions. The exercise of a choice governed fully by a structure established in a policy document (such as a European regulation) is not the determination of a policy.
7.v. Milk Quota Regulations
175. The organisation of the milk market by regulations began decades ago and is continuing. In Regulations 2000 the Minister, purporting to exercise powers conferred on him by section 3 of the European Communities Act, 1972 and for the purpose of giving effect to Council Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 and Commission Regulation (E.E.C.) No. 536/93 of the 9th March, 1993 made Regulations 2000, being a statutory instrument. This followed on Council Regulation (E.C.) No. 1256/1999 of 17th May, 1999 amending Regulation (E.E.C.) No. 3950/92 of the 28th December, 1992 establishing an additional levy in the milk and milk products sector. The policies may be seen therein. For example, recital (2) states:
“Whereas the level of price support in the dairy sector will be gradually reduced by 15% in total over three marketing years from 1 July 2005; whereas the effects of this measure on internal consumption and export of milk and milk products justify a well balanced increase in the total reference quantity for milk in the Community following the respective price cuts on the one hand and targeting certain structural problems at an earlier stage on the other …”
176. Further principles and policies are set out in recital (4):
“(4) Whereas the underuse of reference quantities by producers can prevent the sector of milk production from developing properly; whereas in order to avoid such practices Member States should have the possibility to decide in accordance with the general principles of Community law that, in cases of substantial underuse over a significant period of time, the unused reference quantities will revert to the national reserve with a view to their reallocation to other producers;
(5) Whereas in order to strengthen the possibilities for decentralised management of reference quantities for restructuring of milk production or environmental improvement Member States should be given the power to implement certain provisions in that context at the appropriate territorial level or in collection areas;
(6) Whereas the experience with the additional levy scheme has shown that the transfer of reference quantities through legal constructions such as leases which do not necessarily lead to a permanent allocation of the reference quantities concerned to the transferee, can be an additional cost factor for milk production hampering the improvement of production structures; whereas, in order to strengthen the reference quantities’ character as a means of regulating the market of milk and milk products, the Member States should be authorised to allocate reference quantities, which have been transferred through leases or comparable legal means, to the national reserve for re-distribution, on the basis of
objective criteria, to active producers in particular to those who have used them before; whereas Member States should also have the right to organise the transfer of reference quantities in a different way than by the means of individual transactions between producers; whereas it should be explicitly provided, in particular with a view to taking account adequately of existing legal rights, that, when using these authorisations, Member States are to take the necessary measures to comply with the general principles of Community law …”
177. These regulations have over the decades set out the policies of the milk quota scheme. They stress, as above, that the States make decisions “in accordance with the general principles of Community law.”
178. The regulations, the European provisions, relating to the milk quota scheme were referred to in written and oral submissions by the parties and copies provided to the Court. The European provisions contain extensive principles and policies. They are analysed fully by Fennelly J., with which analysis I agree.
179. The principles and policies of the milk quota scheme have been determined in the European provisions. The Minister in making Regulations 2000 was not determining principles and policies. The Minister was implementing the policies and principles in accordance with the general principles of Community law. The Minister was not purporting to legislate. Consequently, there was no breach of Article 15.2.1 of the Constitution of Ireland.
7.vi. Property Rights
180. The submissions of counsel in relation to this aspect of the case have been set out earlier. Whilst there were submissions that milk quota may qualify for protection as a property right which Member States are obliged as a matter of Community law to protect the stress put on this aspect of the submissions was that the dicta in Bostock did not prevent such right being regarded as a property right for the purposes of Irish Constitutional law.
181. The Community law was stated in R v. Ministry of Agriculture, ex parte Bostock (Case C-2/92) [1994] E.C.R . 1-955 where it was held at p. 984 that:
“The right to property safeguarded by the Community legal order does not include the right to dispose, for profit, of an advantage, such as the reference quantities allocated in the context of the common organisation of a market, which does not derive from the assets or occupational activity of the person concerned (judgment in Case C-44/89 Von Deetzen v. Hampzollant Oldenburg (Von Deetzen II) [1991] E.C.R. 1-5119, paragraph 27).
It follows that the protection of the right to property guaranteed by the Community legal order does not require a Member State to introduce a scheme for payment of compensation by a landlord to an outgoing tenant and does not confer a right to such compensation directly on the tenant.”
182. I am satisfied that this is a clear statement of law, which I apply. Milk quotas do not confer property rights under Community law. This was generally accepted by the applicants.
183. However, it was argued that while Bostock concerned the right to dispose of a quota for profit, the applicants case concerns a form of compulsory acquisition by the State of a quota at a price substantially less than the prevailing market price. In such circumstances, it was submitted, a milk quota may qualify for protection as a property right which States are obliged under Community law to protect. Reference was made to comments of the Advocate General in Demand v. Hauptzollamt Trier (Case C-186/96) [1998] E.C.R. 1-8529 at p. 8539 et seq. The Advocate General stated, inter alia :
“36. We have come a long way since classical Roman times, when property signified a power over a thing that was so direct and complete as to be indistinguishable from the thing itself. Nowadays a large proportion of transactions relate to things which, strictly speaking, are not things at all. They have been created in order to satisfy a specific socio-economic function and, more than any other good, depend on the legislative framework within which they are created and sustained. Take, for example, industrial patents. In order to protect industrial products and thus encourage invention, the legislature creates a new legal instrument and defines its content primarily according to its aims. In doing so the legislature is fully aware that economic dynamism will be sure to bring to light legal aspects of the new instrument which were not foreseen and probably not foreseeable. It will again be for the legislature or, as the case may be, the courts to define its limits and to adapt this foreign body to the workings of the law.
37. To my mind that is the situation as regards the so-called milk quotas. The Community legislature must have believed that it could simply regulate these instruments according to their purpose, namely to control milk production within the Community, and leave it to each Member State to resolve the complex private-law issues which the introduction of the new scheme would inevitably raise. Mindful of the significance of the new arrangement, however, it laid down two important conditions: the quota scheme was introduced on a temporary basis and the quotas were linked with dairy holdings. Both of these conditions have been gradually weakened, the first because the quota scheme has been consistently extended between 1984 and the present time and the second because the Member States have been given increasingly wider opportunities to authorise the transfer of reference quantities independently of the holding. Since 1 April 1993 Member States have even been able to authorise, subject to certain conditions, ‘the transfer of reference quantities between certain producer categories without transfer of the corresponding land (see point 20 above).
38. The national legislatures have used those opportunities in very different ways. While in England a veritable ‘quota market has flourished since the introduction of the scheme, the French rules do not even permit the temporary transfers provided for in Article 6 of Regulation 3950/92. In the absence of a coherent and stable legislative approach, it comes as no surprise that the characterisation of milk quotas by national courts has ranged from ‘valuable intangible asset, or even ‘intangible asset susceptible of being leased or transferred, ownership of which constitutes a subjective right, to the more modest ‘administrative restriction of production or ‘fiscal advantage akin to a subsidy. Legal writers have already expressed doubts as to whether the quota is an immovable asset or a movable asset or whether it is possible to provide real securities over the actual quota rather than the milk production effected thereunder.
184. The justification for the indecisive and case-by-case approach which the Court of Justice tends to take in defining the criteria for protecting property interests is based, at least in part, on this wide range of views which the Community legislation has spawned within the legal orders of the Member States, in particular in the field of private law.
39. While the relative stability of the quota scheme over a given period helps to create a degree of legal certainty, the relaxation of the conditions governing the transfer of quotas reinforces the concept which traders legitimately have of the quota as an autonomous valuable asset. In those circumstances, and in spite of the great differences in regard to this matter between the individual national legal orders, I believe that milk quotas must currently be regarded as authentic intangible assets. However, since they were introduced for the purpose of regulating the market in milk, their content should be defined according to that purpose, which continues to be their raison d être.
40. For those reasons I consider that examination of the validity of the measures adopted within the framework of the regulation of the market in milk must be centred on their necessity and proportionality in the light of the aim which they were intended to pursue. The conclusions drawn from that examination will have to be applied to every holder of a reference quantity, irrespective of the means whereby those quantities were allocated (or, if one prefers, acquired).
41. Put another way, although the fact that milk quotas are in the nature of property may enhance their role in transactions to the point of protecting the subjective rights of those holding them, that aspect must not prevail over the paramount objective of regulating the market. Traders who deal in quotas (by means of the various transactions permitted under national law) must never lose sight of the fact that in the final analysis quotas are, in their essence and by virtue of their purpose, instruments for regulating the market on a temporary basis and that that this entails risks and uncertainty. That clearly does not mean that the legislature is completely free to dispose of those reference quantities as it pleases. It does mean, however, than when analysing the validity of any regulatory measure, such as the 4.5% reduction of the quantities free from levy, one must take into account the inherently regulatory nature of milk quotas before classifying those measures as expropriations. In economic terms, one might perhaps say that for a trader who holds a quota the intervention measures which affect that quota represent one more operating risk, closely linked with the situation on the market. That is a risk which the operator will have to bear, although only in consideration of the protection which the system affords him by guaranteeing a minimum price.
42. Milk quotas thus constitute instruments of market intervention which, through the process of the law, have become an item of property. The content of that item of property/instrument will clearly vary according to the various national legal systems. Some will require a closer link between the quota and a holding or will subject the transfer of the quota to various conditions. The quota is not thereby deprived of its character as an item or property, just as firearms or enriched uranium are not deprived of their character as items of property by the restrictions on transferring them. Those conditions will only provide a means of preventing, to some extent, the creation of ‘quota markets.
43. The solution which I propose is, to my mind, not only the one which best reflects economic reality; it is the one which permits a more satisfactory protection of subjective rights. It is now less true than ever that ‘the right to property thus safeguarded within the Community legal order does not comprehend the right to dispose, for profit, of an advantage, such as the reference quantities allocated in the framework of the common organisation of a market, which does not derive from the assets or occupational activity of the person concerned. That is what the Court appears to have meant by omitting that passage from the more recent Irish Farmers judgment. Unlike the approach it took in earlier cases, in that judgment the Court did not reject the allegation of violation of the right to property on the ground that quotas did not constitute assets. On the other hand, the Court stated that ‘conversion into a definitive reduction without compensation does not affect the actual substance of that right [to property] inasmuch as the Irish producers were able to continue to pursue their trade as milk producers. That statement shows that the Court decided to approach the legal impact of intervention measures – which is what milk quotas are – on their own particular ground, that of the right to property. It only remains, therefore, to say so clearly.”
185. In spite of his eloquence the Court did not develop the right to a right to property but held:
“40. With regard more particularly to the right to property, which, according to the plaintiff in the main proceedings, has been infringed, the Court held, in paragraphs 28 and 29 of Irish Farmers Association, cited above, that the regulations in question form part of a body of legislation intended to remedy the surpluses on the milk market and therefore correspond to aims pursued by the Community in the general interest and that the conversion into a definitive reduction without compensation does not affect the actual substance of that right.
41. It must be added that, regardless of the legal nature to be attributed to an additional reference quantity, but having regard to the persistence of surpluses, a definitive withdrawal of 4.74% of an additional reference quantity appears to be appropriate and necessary to achieve the aim of that measure, namely an enduring reduction of the surpluses.
42. The Community legislature has not thus exceeded the bounds of the latitude available to it, the definitive reduction of 4.74% both of the initial quantity and of the additional quantity not being disproportionate to the aim pursued.”
186. Thus the Court did not follow the approach of the Advocate General on the property right issue. The Courts judgment is based on to the intention grounding the milk quota, the aims of the Community in the general interest. The Court stressed the fact that such steps are necessary to achieve the aim, in the general interest.
187. Counsel for the applicant did not stress this aspect of the appeal. This was a correct approach. I am satisfied that a milk quota is not per se a property right under Community law.
188. However, the applicants submitted that milk quota is a property right under Irish constitutional law. The applicants have relied upon the opinion of Advocate General Cosmas in Duff v. Minister for Agriculture (Case C-63/93) [1996] E.C.R. 1-569 where he stated:
“60. It is, I think, useful to add that, although the above mentioned general principles of Community law can provide no basis for a requirement on the part of Member States to provide for the grant of special reference quantities to the producers referred to in the first indent of Article 3(1) of Regulation No. 857/84, there is nothing to prevent such a requirement from being founded on principles of national law which, in an appropriate case, may ensure greater protection in this respect than that afforded by the general principles applicable in the Community legal order.
61. That possibility in no way jeopardises the uniform application of Community legislation since the first indent of Article 3(1) of Regulation No. 857/84 specifically gave the Member States the possibility of adopting different solutions as regards the grant or otherwise of special reference quantities. It should, however, be emphasized that the application of a principle of national law in order to found such an obligation on the part of the relevant Member State is subject to exactly the same restrictions as those to which national law is in any event subject when it gives effect to provisions of Community law. Thus, that principle will have to be applied in exactly the same manner as it is applied in areas unconnected with Community law, whilst, furthermore, the application thereof must not lead to any substantive alteration of the rules governing the additional levy scheme on milk, jeopardize the effectiveness of the scheme or compromise the successful attainment of its objectives. It goes without saying that it is not for the Court [that is the European Court], but for the national court to examine whether there are any principles of national law capable of imposing on the relevant Member State an obligation to grant special reference quantities to the producers to whom the contested provision of Regulation No. 857/84 refers.”
189. Reference was made also to Deutsche Milchkontor v. Germany (Cases 205 to 215/82) [1983] ECR 2633 and in particular to paragraphs 30 to 33:
“30. The first point to be made in this regard is that the principles of the protection of legitimate expectation and assurance of legal certainty are part of the legal order of the Community. The fact that national legislation provides for the same principles to be observed in a matter such as the recovery of unduly paid Community aids cannot, therefore, be considered contrary to that same legal order. Moreover, it is clear from a study of the national laws of the Member States regarding the revocation of administrative decisions and the recovery of financial benefits which have been unduly paid by public authorities that the concern to strike a balance, albeit in different ways, between the principle of legality on the one hand and the principles of legal certainty and the protection of legitimate expectation on the other is common [to] the laws of the Member States.
31. Where the rules and procedures applied by the national authorities in the recovery of Community aids are the same as those which they apply in comparable cases concerning purely national financial benefits, there is in principle no reason to assume that those rules and procedures are contrary to the national authorities duty under Article 8 of Regulation No. 729/70 to recover sums irregularly granted and that consequently they reduce the effectiveness of Community law. This applies in particular to grounds for excluding recovery where these are related to the administrations own conduct and it can therefore prevent them from occurring.
32. It should be added, however, that the principle that national legislation must be applied without discrimination compared to purely national procedures of the same kind requires the interest of the Community to be taken fully into consideration in the application of a provision which . . . requires the various interests in question, namely on the one hand the public interest in the revocation of the measure and on the other hand the protection of the legitimate expectation of the person to whom it is addressed, to be weighed up against one another before the decision is revoked.
33. The answer to the seventh question must therefore be that Community law does not prevent national law from having regard, in excluding the recovery of unduly-paid aids, to such considerations as the protection of legitimate expectation, the loss of unjustified enrichment, the passing of a time-limit or the fact that the administration knew, or was unaware owing to gross negligence on its part, that it was wrong in granting the aids in question, provided however that the conditions laid down are the same as for the recovery of purely national financial benefits and that the interests of the Community are taken fully into account.”
190. Of these paragraphs, Barrington J. held in Duff v. Minister for Agriculture (No.2) [1997] 2 I.R. 22 at p. 81 that:
“It appears to me that in these passages the Advocate-General has gone out of his way not to exclude the possibility that the plaintiffs may have a remedy in national law. Neither has he excluded the possibility that principles of Community law, such as legitimate expectation, may be invoked by the plaintiffs so long as there is no discrimination against Community funds (as compared to national funds) and so long as the interest of the Community are kept in sight.”
191. In that case the Supreme Court (OFlaherty, Blayney and Barrington JJ., Hamilton C.J. and Keane J. dissenting) held that on the evidence the Minister had in fact decided to make provision for development farmers such as the plaintiffs, young farmers and disease-herd farmers. However, the Minister had made a mistake of law in seeking to provide for these categories of farmers other than by establishing a reserve under Article 5. The decision was accordingly illegal, and therefore it was not a question of reviewing the manner in which the Minister had reached his decision. The majority held that the plaintiffs were entitled to compensation for the Ministers mistake of law. Thus the case may be distinguished as being grounded on the Ministers mistake of law.
192. I am satisfied that in certain circumstances persons may have a greater protection of property rights at national law than under Community law. As to whether such a situation exists depends on the facts, circumstances and laws of each case.
193. The property rights under the Constitution of Ireland are enshrined in Article 40.3.2 and
194. Article 43. They provide:
Article 40.3.2
“The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.”
Article 43
“1. 1º The State acknowledges that man, in virtue of his rational being,
has the natural right, antecedent to positive law, to the private
ownership of external goods.
2º The State accordingly guarantees to pass no law attempting to
abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1º The State recognises, however, that the exercise of the rights
mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2º The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.”
195. To determine the precise right in issue under Irish law it is necessary to analyse the nature of milk quota in relation to constitutional property rights. There are a number of relevant factors to this analysis.
(a) The nature of milk quota scheme
196. The nature of the right conferred by a milk quota is to permit the holder to produce milk up to the quantity of the quota without the payment of a levy. Milk quotas form part of the levy scheme which is constantly subject to changes, including reduction in the amount of quota without compensation: Irish Farmers Association & Ors. V. Minister for Agriculture [1997] E.C.R. 1-1809. In that case, in relation to the issue of legitimate expectation, the nature of the constant adjustments of the scheme were addressed:
“According to the consistent case-law of the Court, in the sphere of the common organization of the markets, whose purpose involves constant adjustments to meet changes in the economic situation, economic operators cannot legitimately expect that they will not be subject to restrictions arising out of future rules of market or structural policy. The principle of the protection of legitimate expectations may be invoked as against Community rules only to the extent that the Community itself has previously created a situation which can give rise to a legitimate expectation (see Case C-177/90 Kühn v Landwirtschaftskammer Weser-Ems [1992] ECR I-35, paragraphs 13 and 14, and Case C-63/93 Duff and Others v Minister for Agriculture and Food, Ireland, and the Attorney General [1996] ECR I-569, paragraph 20).”
197. In relation to property rights the Court again stressed the nature of the scheme, referring to social function and to aims pursued by the Community in the general interest. It stated:
“Right to property
26. The plaintiffs in the main proceedings argue that the permanent withdrawal of 4.5% of their reference quantities without compensation infringes the right to property.
27. That argument cannot be upheld, either. The right to property is certainly one of the fundamental rights whose observance is ensured by the Court. Such rights are not, however, absolute rights but must be considered in relation to their social function. Consequently, restrictions may be imposed on the exercise of those rights, in particular in the context of a common organization of the markets, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute, with regard to the aim pursued, a disproportionate and intolerable interference, impairing the very substance of those rights ( Kühn, cited above, paragraph 16).
28. Having regard to those criteria, it must be held that, first, the regulations in question form part of a body of legislation intended to remedy the surpluses on the milk and milk products market and that they therefore correspond to aims pursued by the Community in the general interest.
29. Secondly, conversion into a definitive reduction without compensation does not affect the actual substance of that right inasmuch as the Irish producers were able to continue to pursue their trade or profession as milk producers. Moreover, the reduction in milk production led to an increase in the price of milk, thus compensating, at least in part, the loss suffered.”
(The applicants in this case are not producers, as is stressed later.)
(b) Genesis of milk quota scheme.
198. It is also appropriate to consider the genesis of the milk quota. The foundation of that right is in Community law. A milk quota is quintessentially a Community creation. It was created and is updated regularly by Community laws. On any analysis a milk quota is grounded in Community law. Community policy governs the development of milk quotas, indications of future policy have already been given. Because of this the fundamental principles of milk quotas will continue to be governed Community wide by Community law. Insofar as domestic law on milk quota exists, it is subject to the principles and policies established in Community law.
(c) Producers are a key factor.
199. It is of the essence of the milk quota scheme that quota is released by those ceasing to produce and reallocated to a producer. The facts of this case relating to the applicants are relevant. The applicants are not producers. They have earned monies from the quota, however. There are a number of options opened to each of them. They are not seeking to use the quota as producers themselves.
200. General principles of Community law do not prohibit the State treating a milk quota as a property right provided such approach is consistent with Community law. It must be in compliance with Community law. The domestic right in this case, however, is itself grounded in Community law, on the facts, circumstances and law. In analysing the rights under the milk quota scheme in Ireland the same characterisations should apply as under Community law. The essence of the right in this jurisdiction is not severable from the concept of the right under Community law. The right in issue arises in a scheme created with a view to the aims of the Community in the general interest. The nature of the right stemming as it does exclusively from the C.O.M. does not change. Any “right” which the applicants have is solely because of the milk quota regulations which enable them to produce a milk quota to a certain level with monetary consequences. It is a right created by Community law subject to a change in the scheme.
201. Insofar as it may be analysed as similar to a property right it is analogous to a licence and to Irish law in relation to such schemes. An analogy may be seen in Hempenstall v. Minister for the Environment [1994] 2 I.R. 20. The applicants were holders of taxi licences who claimed that certain regulations made by the Minister for the Environment under the Road Traffic Act, 1961 had had the effect of reducing the value of their taxi licences and that this constituted an unjust attack on their property rights. Costello J., in rejecting the applicants arguments, primarily on the ground that no diminution in the value of their licences had actually occurred, observed, at p. 28:
“. . . even if it were established that the making of the Regulations of 1992 resulted in a diminution in the value of the applicants taxi-plates this would not as a matter of law amount, in my opinion, to an attack on the applicants property rights. Property rights arising in licences created by law (enacted or delegated) are subject to the conditions created by law and to an implied condition that the law may change those conditions. Changes brought about by law may enhance the value of those property rights (as the Regulations of 1978 enhanced the value of taxi-plates by limiting the numbers to be issued and permitting their transfer) or they may diminish them (as the applicants say was the effect of the Regulations of 1992). But an amendment of the law which by changing the conditions under which a licence is held, reduces the commercial value of the licence cannot be regarded as an attack on the property right in the licence-it is the consequence of the implied condition which is an inherent part of the property right in the licence. [emphasis added]”
202. The learned High Court judge examined the issue of whether a change in the law can be said
to have been an “unjust attack”:
“Thirdly, a change in the law which has the effect of reducing property values cannot in itself amount to an infringement of constitutionally protected property rights. There are many instances in which legal changes may adversely affect property values (for example, new zoning regulations in the planning code and new legislation relating to the issue of intoxicating liquor licences) and such changes cannot be impugned as being constitutionally invalid unless some invalidity can be shown to exist apart from the resulting property value diminution. In this case no such invalidity can be shown. The object of the exercise of the Ministerial regulatory power is to benefit users of small public service vehicles. It has not been shown or even suggested that the Minister acted otherwise than in accordance with his statutory powers. Once he did so then it cannot be said that he has thereby “attacked” the applicants property rights because a diminution in the value may have resulted. [emphasis added]”
203. A similar approach was taken in a consideration of the liquor licensing scheme. In State (Pheasantry) v. Donnelly [1982] I.L.R.M. 512, the Court emphasised that the licence was granted subject to certain limitations and conditions. Carroll J. stated:
“The licence is a privilege granted by statute and regulated for the public good.”
204. The learned judge then continued, at p. 516:
“It is ab initio subject to various conditions … There is no constitutional right to a liquor licence or a renewal thereof. There are only such rights as are given by statute subject to the limitations and conditions prescribed by statute. [emphasis added]”
205. Resonances of this line of reasoning may also be detected in cases such as Hand v. Dublin Corporation [1991] 1 IR 409 and Private Motorists Provident Society Ltd. v. Attorney General [1983] I.R. 339.
206. Thus in domestic law the right in a licence is subject to conditions created by law. This is an inherent aspect of the right in a licence. It is a right subject to the policies implemented by
provisions at national level. It is a scheme, a policy, in the general interest. By analogy in this case the Community provisions stand in the place of national legislation. The principles and policies of the milk quota scheme are therein provided. It is subject to the same analysis as to a licence created by statute. There are inherent aspects. It is subject to change. It is a scheme in the general interest.
207. The nature of a domestic right such as a licence is dependent on the law, usually statutory, which creates and develops the specific scheme. Behind the stated scheme is a policy being implemented through the legislation by the legislature. Such a scheme is in the public interest. It may be viewed through the concepts of the exigencies of the common good and proportionality.
208. The milk quota scheme at Community level is based on policy related to the market and to aims of the Community, which policies have been stated in treaties, regulations and cases. Policy changes and develops. Conditions and terms of the milk quota scheme change from year to year. Indeed, this is a scheme with a very ‘hands on supervision from central institutions. It is a policy with the general aim of the common good. The applicants have an advantage, a right, as a consequence of this policy. It is a right created in the public interest and subject to the public interest. It is a right to which the applicants know the terms and conditions and know of their variability. On this analysis the scheme is constitutionally permissible.
8. Conclusion
209. The mode of implementation of the detailed milk quota scheme in Ireland pursuant to European provisions is a matter of choice for Ireland. The choice is governed by Irish public law. It was not necessary that the State chose implementation by statutory instrument. However, that choice is valid under Irish public law as the European regulations are part of Irish law and may be regarded in the same way as an enabling statute of the Irish legislature.
210. Once the principles and policies are set out in the European regulations then Irish public law permits implementation by way of a statutory instrument of the principles and policies of the European regulations. The statutory instrument is not laying down principles and policies so it is not ultra vires . Further, as no principles or policies are being determined there is no requirement for the national legislature to legislate. Article 15.2.1 is not being defeated as the decisions of principles and policies have been made in the European regulations. The detailed implementation must be in accordance with the regulations. Indeed, the practice is that the implementation of the principles and policies of the milk quota scheme is overseen tightly from Europe.
211. This case is not about any democratic deficit in Ireland. If there is a democratic deficit it should be met prior to the making of the Community regulations. If any such deficit exists it cannot be addressed after the policies and principles have been established by the Community regulations. This is not a case of the executive usurping the role of the legislature. Once principles and policies have been established by Community regulations there is no role, certainly no meaningful role, for the national legislature.
212. The democratic system in Ireland functions through three branches of government. However, in addition, the State is subject to European institutions and provisions made therein. These regulations are directly applicable. These regulations are part of Irish law as a consequence of Irelands membership of the European Union. They are part of Irish law without any input from the three branches of government.
213. The principles and policies in relation to the milk quota were set down in the European provisions. These regulations are directly applicable in Ireland. They set out the principles and policies of the milk quota scheme. This scheme is a creation of the European Union and an important part of the Common Agricultural Policy and the Common Organisation of the Market. It is quintessentially a market device run from central institutions.
214. There was no necessity for legislation in the national parliament of Ireland as the principles
and policies are established in the regulations. Indeed, such an enactment might have caused an impediment of the common organisation of the market if it had strayed from the principles and policies in the regulations. Also, such an approach might have created the illusion that there were policies to be decided in the national parliament when in fact there were not. There was no renvoi to the national legislature.
215. There are choices to be made within the regulations. However, these choices are the exercise of a discretion within the principles and policies established. The fact that there is a discretion does not take it outside the principles and policies established – which have been established at European level. The discretion exercised is a limited one within the principles and policies established.
216. Thus the method chosen to implement Regulations 2000 was constitutional and not a breach of Article 15.2.1. It was not a violation of the separation of powers as the decisions had all been taken at European level. Indeed, to hold that the choice left to Ireland required legislation might well diminish the status of the national legislature; to require it to act as a body in decision making where the decisions as to principles and policies have been made,
and furthermore are carefully monitored, in European institutions.
217. The nature of the milk quota was established at European level, it is a creation of the European Union. The applicants have submitted that it is a property right under Irish constitutional law, that they are entitled to the protection of the Irish Constitution. I am satisfied that this is not so in this case. The nature of a milk quota is similar under Community and Irish law. Milk quota arises as a scheme under C.A.P. and C.O.M. to regulate the European market. It is a right to produce and sell milk to the amount of their quota. In fact none of the applicants are producers. It is a scheme the terms and conditions of which are constantly changing. Restructuring is an important aspect under Community principles and policies. It is a scheme in the general interest. Even if it is a property pursuant to the Articles of the Constitution of Ireland, it is subject to the exigencies of the common good and principles of proportionality, consequently also to the general aim of this scheme. Either way the applicants have not made out a case as claimed.
218. For the reasons stated I would dismiss the appeal.
THE SUPREME COURT
340/00
Keane, C.J.
Denham, J.
Murphy, J.
Murray, J
Fennelly, J.
BETWEEN
NICHOLAS PHILIP (OTHERWISE MARTIN) MAHER
MALACHY BRETT AND RITA RYAN
Applicants
AND
THE MINISTER FOR AGRICULTURE FOOD AND RURAL DEVELOPMENT
IRELAND AND THE ATTORNEY GENERAL
Respondents
Judgment delivered the 30th day of March, 2001, by Murray, J.
219. I have had the advantage of reading the judgment of Fennelly, J. and I agree with his reasoning and conclusions on the issue as to whether the national rules contained in the European Communities (milk quota) Regulations 2000 (S.I. No. 94/2000) (“The 2000 Regulations”), implemented for the purpose of community regulations ought to have been introduced by way of primary legislation in order to comply with the provisions of the Constitution in lieu of the statutory instrument adopted by the Minister.
220. Fennelly, J. has very clearly set out all the factual elements and applicable law , in particular the legal measures adopted at both community level and national level governing the milk quota system. Therefore, it is not necessary for me to make detailed reference to those matters and I do so only so far as it is necessary for the purpose of addressing the particular issues with which this judgment in concerned. Those issues are the claim made on behalf of each of the Applicants that the 2000 regulations infringed the property rights of the Applicants as guaranteed by the Constitution and, or alternatively, their property rights as protected by European Community law.
221. In this respect it was submitted on behalf of the Applicants that a milk quota should be treated as just as valuable an asset in its own right as land itself. In effect the Applicants were being required to sell their milk quota under the 2000 restructuring scheme to the Minister at a price fixed by him at a fraction of its market value. It was submitted that this was equivalent to the forfeiture of unused agriculture land at a price significantly below its market value and was in conflict with Article 40.3.2 and Article 43 of the Constitution.
222. Since the basis on which the milk quota could be sold into the restructuring scheme pursuant to the 2000 Regulations was a matter within the discretion of the national authorities it fell to be exercised in accordance with national law , the Minister was bound in so doing to respect the property rights of the Applicants as guaranteed by the Constitution.
223. It was also submitted that, even if a right derived from community law does not fall to be considered as a fundamental right within the meaning of that law, it does not follow that such a right cannot enjoy protection of the Constitution where it is expressly or implicitly recognised as a fundamental right.
224. As regards European community law, it was submitted that the right to property is one of the fundamental rights protected by community law. While it was accepted that the Court of Justice has generally taken the view that milk quotas do not constitute a property right so far as community law is concerned, as in the case of R -v- Ministry of Agriculture, ex-parte Bostock (C-2/92 [1994] ECR 1-955) it was submitted that Bostock concerned the right to dispose of a quota for profit whereas the present case concerns a form of compulsory acquisition by the state of a quota at a price substantially less than the prevailing market value. In this context a quota may qualify for protection as a property right which the member states in turn are obliged, as a matter of community law to protect. In support for this submission the Applicants relied on the opinion of the Advocate General in Demand -v- Hauptzollampt Trier (C-186/96 [1998] ECR 1-8529 at 8541). That opinion included the following statement at paragraph 42 “ Milk quotas thus constitute instruments of market intervention which through the process of the law, have become an item of property. The content of that item of property/instrument will clearly vary according to the various national legal systems. Some will require a closer link between the quota and the holding or will subject the transfer of the quota to various conditions. The quota is not thereby deprived of its character as an item of property, just as fire arms are enriched uranium or not deprived of their character as items of property by the restrictions on transferring them. These conditions will only provide a means of preventing, to some extent, the creation of ‘quota markets .”
225. For the Respondents it was submitted that the nature of rights conferred by the milk quota on the Applicants can be no different under Irish law than under Community law. The Respondents rely on the judgment of the Court of Justice in R -v- Ministry of Agriculture, ex-parte Bostock for the submission that so far as Community law is concerned a milk quota it is not a property right. It follows, in their submission, that it cannot be a property right under national law. Furthermore, on the facts of the case the Applicants are seeking no more than to earn a greater profit from the milk quota currently held by them than is allowed for by the 2000 Regulations. These milk quotas form part of the additional levy scheme which has been introduced for a limited period only and which has been the subject of constant changes including reductions in the amount of quota without compensation which has been upheld as permissible by the Court of Justice. It is not a property right in Community law.
226. In the alternative the Respondents argue that if the Applicants are to be considered as having a property right in their milk quota, it can be no greater than a property right and a licence to produce and deliver milk in the amount of their quota. The changes made by the 2000 Regulation does not interfere with this right since the quota must be regarded in Irish law as a licence or permit created by law and subject to an implied condition that the law may legitimately change the licence scheme or conditions attaching to such licence. Accordingly, the 2000 Regulations do not conflict with either Article 40.3.2 or 43 of the Constitution.
Decision:-
227. It is appropriate first of all to consider the submission on behalf of the Applicants that the State is entitled and indeed bound to respect constitutional guarantees for the respect of fundamental rights even where that right is derived from Community law in circumstances where the degree of protection to be afforded to such a right is left to the discretion of the member state. In support of that contention, the Appellants relied on the views expressed in an opinion of Advocate General Cosmas in Duff -v- Minister for Agriculture (C-63/93 [1996] ECR 1/569) where he held that the Plaintiffs legitimate expectations at Community law level had not been infringed by the actions of the Minister, but this did not prevent “… such a requirement from been founded on principles of national law which, in an appropriate case, may ensure greater protection in this respect than that afforded by the general principles applicable in the community legal order .”
228. I do not consider that the proposition as framed and advanced on behalf of the Appellants needs to find its source in Community law. It seems to me that the view expressed by Advocate General Cosmas is no more than a reflection of the position in national law when member states exercise their legislative powers in a matter in which they have competence and a discretion as to the legal protection to be afforded to fundamental personal rights. In such circumstances the Member States have the power, or as the case may be, the duty to legislate in accordance with national law including constitutional law. One of the primary duties of the organs of government under our Constitution including the judicial organ of government is to ensure due observance of the Constitution, respect for the fundamental rights which it protects and where appropriate to defend and vindicate them, always with due regard to the precedence which the Constitution in effect accords to Community law and its fundamental principles by virtue of the relevant provisions of
Article 29.
229. Of course it is the case that a Member State when introducing legal measures at national level, which fall within the scope of community law, such as giving effect to a directive or regulation, must comply with community requirements with regard to the protection of fundamental rights which is an integral part of the community legal order. (C-222/84 Johnston -v- Chief Constable of the RUC [1986] ECR 1651 para. 18). This is so even if the measures taken are within the ambit of a discretion left to the member state. Whether such a measure respects the community protection of fundamental rights must be determined by community law alone.
230. However, where the State enacts a legislative measure in the exercise of a discretion conferred by community law it is not ipso facto absolved from ensuring that such legislation is compatible with the Constitution. This is self-evident from the terms of Article 29.4 which, inter alia , provides that no provision of the Constitution invalidates laws enacted or measures adopted by the State which are “necessitated” by the obligations of membership of the European Union or of the Communities. The discretion allowed to the Member State maybe so circumscribed by community law that the entire of any legislative measure taken by it or the exercise of such discretion is “necessitated”. This could arise where the exercise of a discretion conferred by community law was required to be exercised exclusively having regard to the policy considerations and objectives of the community measure and where considerations of national law would distort the proper exercise of such a discretion.
231. On the other hand, the discretion conferred by community law on the State when implementing legislative measures maybe sufficiently wide to permit the State to have full regard to the constitutional protection afforded to fundamental rights without impinging on the full effect and uniform application of community law. In such circumstances the State, in the exercise of such discretion, would be bound to respect personal and fundamental rights as guaranteed by the Constitution.
232. In this particular case it may well be that the discretion conferred on the Minister to cease to apply Article 7 (1) of Regulation (EEC) 3950/92 as amended by the insertion of Article 1 (10) of Regulation (EC) 1256 /99 of Article 8 a (b) is so circumscribed to be considered “necessitated” within the meaning of Article 29 of the Constitution. These concern the rules on the transfer of quotas. The position may be otherwise in respect of the power conferred on the Minister by the national regulations, the 2000 Regulations, to fix the maximum price per litre/gallon for which the price of milk quotas may be calculated.
233. However, it is not necessary to venture further into these issues unless the Applicants have established that they have a property right and that the constitutional guarantees have been infringed as they allege.
Property Rights – national law:-
234. The next question which arises is whether a right being asserted by the Appellants in these proceedings is a property right, and if so whether it has been infringed contrary to Article 40.3.2 or Article 43 of the Constitution.
235. First of all regard must be had to the general context in which the milk quota or super levy system has functioned and been regulated. It is an integral part of the Common Agriculture Policy the objectives of which are set out in Article 33 of the E.C. Treaty namely:-
(a) To increase agricultural productivity by promoting technical progress and by ensuring the rational development agricultural production and the optimum utilisation or the factors of production, in particular, labour;
(b) Thus to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture;
(c) To stabilise markets;
(d) To ensure the availability of supplies;
(e) To ensure that supplies reach consumers at reasonable prices.
236. Article 34 of the Treaty authorises the community to take all measures required to attain the above objectives and in particular measures concerning the “ regulation of prices, aids for the production and marketing of the various products, storage and carry over arrangements and common machinery for stabilising imports or exports. ”
237. The milk quota system is an integral part of the common organisation of the market in the milk sector. This common organisation of the milk sector market was introduced initially by council Regulation (EEC) No. 804/68 with a view to guaranteeing to producers a common target price with the support of certain intervention measures.
238. The basic common organisation of the market in the milk sector from its inception on the adoption of Council Regulation (EEC) no. 804/68 and its evolution to the present regime to which the 2000 Regulations apply has been clearly set out in the judgment of Fennelly, J. From a general point of view it is clear that the milk quota system as successively varied and amended was intended to achieve the objectives of the common organisation of the market in the milk sector and those of the Common Agricultural Policy. In particular it had among its primary objectives that of maintaining market balance and producers income. In a real sense it created an artificial market for milk products since the regime was designed at all times to counteract the negative effects of prevailing market forces in open unregulated national markets. A stable milk sector market has benefits for the consumer and thus for society for a whole but it can be fairly said that at least equal benefactors of the regulation of the market are those farmers who participate in the milk quota regime. This is highlighted by the recital in Council Regulation (EC) 1255/99 which recites as one of its fundamental objectives “to ensure a fair standard of living for the agricultural community.”
239. Thus by the various measures and mechanisms authorised by the Treaty, a particular and common organisation of the market of milk as a product was constructed. The market can be said to be particular in so far as that the conditions of trade, including the price of milk, are fashioned by the regulatory regime to the direct benefit of producers. The history of the establishment and evolution of the common organisation of the market in the milk sector, as outlined in the judgment of Fennelly, J. and elsewhere, demonstrates that the regulatory regime did not always achieve the objectives anticipated either because it did not have the full effect expected or because of intervening factors such as over production of milk. The common organisation of this market successively over the years has been subject to variations, refinements and amendments with a view to achieving the basic objectives of the Common Agricultural Policy. These changes have included reductions in the amount of quota without compensation (the legality of which was upheld by the Court of Justice in the Irish Farmers Association and Ors -v- Minister for Agriculture (C-22/94 [1997] ECR 1 1809 ). Such constant changes are an inherent feature of the common organisation of the market in the agricultural sector. As Mr Patrick Evans, official at the Department of Agriculture, Food and Rural Development, points out in paragraph 9 of his affidavit “ each year the commission carries out an analysis of the market situation and a future outlook with regard to each of the agricultural products governed by the common organisation to the market. The Commissions report of this market analysis is followed by any proposals the Commission considers necessary to provide for changes to ensure that the objectives of the regime in individual sectors continued to be met .” Neither the organisation nor the market which it governs can be assumed to remain static.
240. It seems to me that when changes are effected to a regime regulating the organisation of a product market, such as that which we have here, which are internally rational to the regime and the objectives to be achieved by it, those who participate as economic operators in that market must, in principle, accept such changes as an inherent element in that market in which they participate provided, at least, those changes do not affect other substantive rights independent of the regime and do not offend against fundamental principles such as non- discrimination.
241. If a persons rights or activities under such a regulatory regime were to be abridged or limited for purposes external or extraneous to those of the regulatory regime, any question of compensation which might arise would have to be approached from a different perspective. Such could arise, for example, where a state authority compulsory acquired portion of a farmers lands for public road or public housing to the extent that his entitlement to be attributed or ability to use a quota was reduced or eliminated altogether. Obviously this does not arise in this case
242. The substantive independent right which has been put in issue in this case is what is claimed to be the Appellants fundamental right to the ownership of property. No issue has arisen concerning the breach of fundamental principles such as non-discrimination.
243. Whether the Applicants property rights as guaranteed by the Constitution have been breached falls to be considered in the light of the impact of the 2000 regulations on their position as persons who have been allocated a quota under the system and the disadvantage which they claim to suffer as a result of that impact.
The position of the Applicants :-
244. It is not contested, and it indeed it is part of their case, that each of the Applicants participated for a significant number of years in the milk quota regime and profited therefrom. It is also the case that each have profited, in varying degrees, from a leasing of their quota in respect of milk quantities of which they were not the actual producers.
245. As regards Mr Maher, the options now available to him in the light of the 2000 Regulations are as follows: –
(a) He can resume milk production and benefit fully from the milk quota regime;
(b) He can transfer the quota with land to a relative as defined in the 2000 Regulations. The quota which he leased to Mr Maurice Ryan since 1996 to March 31, 2000 can be sold to Mr Ryan, with or without the leased land;
(c) He can sell the quota under the 2000 milk quota restructuring scheme;
246. This would involve selling at the maximum price fixed by the Minister which is less than he would obtain on the market without a capped prices restraint.
(d) If he sells the quota under the restructuring scheme, his son or daughter will have priority to buy up an equivalent level of quota from future restructuring schemes provided that sufficient quota is available.
247. Mr Maher submits that the only real option to him are either to resume milk production or to sell his milk quota under the 2000 milk quota restructuring scheme. It was submitted that at present he is not in a position to resume milk production as this would be very expensive. Selling the quota to Mr Ryan is not a realistic option as he and Mr Ryan have not been able to agree on terms. In practice, it is claimed, he cannot keep the quota for any of his children and that the option of his children to buy an equivalent level of quota from a future restructuring scheme is subject not only to the availability of quota at that time but also subject to the operation of a restructuring scheme being in place. His only option therefore is to sell the quota under the 2000 milk quota restructuring scheme at a price less than the ‘market value.
248. Mr Brett and his wife are an elderly couple depending on income from their quota. The options open to Mr Brett are:-
(a) Resume milk production
(b) Sell the quota under the 2000 milk quota restructuring scheme.
249. Because of their age it is not a realistic option for them to resume milk production and the only realistic option open to them is to sell under the restructuring scheme at a price less than the market value of the milk quota.
250. Ms Ryan it is contended is in much the same position. She could not afford at this stage, it is stated, to return to milk production and selling into the restructuring scheme is her only option leading again to a loss by comparison to what she could obtain if she was allowed to sell on the open market.
251. The common elements in the position of the three applicants is that none of them are active producers, all have the option of resuming production of milk on their respective farms and benefiting in full from the milk quota regime, but because of their personal circumstances the resumption of working their farm to produce milk is not a realistic option for them personally. In each case it is claimed that they are realistically only left with one option to sell into the restructuring scheme. This would involve selling at the capped price fixed by the Minister of £1.36 per gallon. In support of the first Applicants claim, evidence was tendered on his behalf by way of the affidavit of Mr Noel Corcoran, an auctioneer, to the effect that his milk quota had a value of £3.00 per gallon “on a sale on the open market”. It is not in dispute that, at least at the time of the High Court proceedings, the capped price fixed by the Minister was significantly less than what would be obtainable on the “open market.”
252. In their written and oral submissions the Applicants contended that it would be unrealistic not to regard a milk quota as valuable an asset in its own right as land itself, and that the resulting effect of the price fixed by the Minister was analogous to “to the forfeiture of unused agricultural land at a price significantly below market values or which seriously inhibited the right to lease such an asset. Such a consequence was manifestly in conflict with Articles 40.3.2 and 43 of the Constitution.”
253. First of all it should be said that the 2000 Regulations apply to all persons who were holders of a milk quota so to speak at the time of their entry into force and it is not in issue that they apply to all that class of persons in accordance with objective criteria.
254. Pursuant to those regulations, each of the Applicants is entitled, in common with all other holders of quotas, to retain the quotas attributed to them on resuming production of milk. It is for reasons wholly personal to them that they will not do so.
255. Their quotas are not being forfeited. That the Minister was entitled to make detailed rules concerning restrictions on transfer of quota with land with a view to implementing the community regulations is not in dispute (save obviously as to whether it ought to have been done by way of primary legislation or secondary legislation). In making such rules and in exercising the discretion provided for in Article 8a(b) of Regulation 3950/92 (as inserted by Article 1.10 of Regulation 1256/1999, the Minister was constrained by the objective of “ ensuring that reference quantities are solely attributed to active milk producers ”. As Fennelly, J. points out in his judgment, member state discretionary action is circumscribed by the objectives of the scheme authorising it and that “ in the instant circumstances, Member States are authorised to act only to achieve the aim of ensuring that reference quantities are attributed to producers ”.
256. In my view the adjustments implemented by the 2000 Regulations are internally rational to the objectives to be achieved by the regulatory regime. There is no forfeiture. There is no interference with a substantive right, such as property right.
257. The foregoing measures are no more than regulatory adjustments which are an inherent part of a particular organisation of any market. Clearly no economic operator who participates in such a market can legitimately expect it to remain in a static or frozen form and must accept the consequences of such inherent internal adjustment as governing his or her participation in that market.
258. It seems to me that on any view the interest of the Applicants in their quotas, however it is characterised, have not been substantively diminished subject only to the remaining question which has arisen with regard to sale under the 2000 restructuring scheme. In reality it is that question which has been the focal point of the Applicants complaint regarding infringement of their property rights. In doing so they have contrasted the price available in the restructuring scheme by virtue of the capped price fixed by the Minister and that which would be available on what, the first Applicants auctioneer referred to as, “ the open market ”. It may be said that “open market” is hardly an apt term since the market in milk and hence its price is a creature of the particular market conditions created by the regulatory regime itself. In reality it is the price which the sale of a quota, based on the maximum fixed price per gallon, (or litres), would obtain on that particular market as a construct of the regulatory regime, which is contested.
259. Article 26 (5) of the 2000 regulations is the provision which authorises the Minister to fix the capped or maximum payment for a quota surrendered in the 2000 Restructuring Scheme. It is also the provision which authorises the Minister to set the reallocation price. It is not this provision which is in issue with regard to the infringement of the Applicants property rights but rather the price fixed by the Minister pursuant to that provision and which he announced by way of departmental notice no. 94/1, namely that the maximum price for quota to be offered under the restructuring scheme is fixed at 30p per litre or approximately £1.36 per gallon. The uncontested evidence before the High Court, as set out in paragraph 39 of the affidavit of Mr Evans is that the maximum price was fixed having regard to the objectives contained in Article 8, (the allocation of quotas to active milk producers). In this regard Mr Evans added “ I say and believe that this was a fair price taking into account the interest of milk producers requiring additional quota and those person disposing of their quota. Most of quota surrendered and reallocated in accordance with the scheme will be reallocated to small and medium size producers. In most cases, producers finance the purchase of additional quota by raising loans from lending institutions. Many of the producers will have required quota in previous years, similarly financed. On the other hand, persons selling their quota under the restructuring scheme are likely to have benefited significantly from leasing their quota over a number of years with land or under temporary leasing schemes”
260. It is clear that the price fixed by the Minister is internally and rationally related to the functioning and the continuing existence of the common organisation of the milk market with a view to achieving its objectives. Non-active milk producers, such as the Applicants who have a quota and who for reasons personal to them do not wish to or cannot resume actual production of milk are allowed an opportunity to sell at a maximum price which takes account on the one hand of the needs of such persons and on the others of persons who wish to enter the system, acquire a quota or an additional quota and actively produce milk. The so called ‘market value relied upon by the Applicants is also an artificial product of the organised market in milk. The potential opportunity to sell at the “market price” generated by the functioning of the quota system to the exclusion of the regime now established by the 2000 regulations (including the price fixed by the Minister under those regulations) is not a property right. Property rights generates notions of proprietorship and dominion. In the context of this scheme I do not consider that the Applicants had a proprietary interest in the selling at the particular “market price” which they seek to rely on. For the reasons stated I consider that the Minister, in fixing the price which he did, has acted within the ambit of the common organisation of the milk market and a quota regime and if there can be said to be a market price it is that governed by the maximum price fixed by the Minister. To hold otherwise it would be to deny the Minister his right and duty to exercise his lawful regulatory powers to ensure the proper functioning of the system. It would also wrongfully attribute to the Applicants some proprietorial right to determine how the regulatory system in which they have participated should be operated.
261. For these reasons I am of the view that the property rights of the Applicants have not been infringed under national law.
Property Rights – community law: –
262. It is well established that the protection of fundamental rights is an integral part of the community legal order which Member States must respect. The right to property is one of those rights (C-4/73 Nold -v- Commission [1974] ECR 491, para 14 and C-4/79 Hauer -v- Land Rhinland Pfalz [1979] ECR 3727 , paras 17-30). Action on the part of Member States taken within the scope of community law has to comply with community requirements with regards to the protection of fundamental rights (C-22/84 Johnston-v- Chief Constable of the RUC [1986] ECR 1651 , para 18). In the Wachauf case the Court of Justice held that “ since those requirements are also binding on the Member States when they implement community rules, the Member States must, as far as possible, apply those rules in accordance with those requirements ” (C-5/88 Washauf [1989] ECR 2609 para19). The Hauer case made it clear that the compatibility of such measures with the fundamental rights as protected by the community must be determined autonomously in the light of community law alone. [at p.3744].
263. In this context the issue is whether the 2000 regulation made by the Minister infringes community law guarantees on the right to property.
264. Counsel for the Applicants have freely acknowledged that in the Bostock case (cited above) the Court of Justice held, in reaffirming an earlier decision, that “the right to property safeguarded by the community legal order does not include the right to dispose, for profit, of an advantage, such as the reference quantities allocated in the context of the common organisation of a market, which does not derive from the assets or occupational activity of the person concerned …” (at p. 984)
265. That statement of the law still stands and nothing in the subsequent case law of the Court of Justice including its decision in Demand -v- Hauptzollampt Trier (cited above) has qualified it notwithstanding the views expressed by the Advocate General in that case.
266. The Applicants have argued that Bostock concerned the right to dispose of a quota for profit whereas this case is concerned with what is in effect a compulsory acquisition of the State of a quota at a price substantially less than the prevailing market price. As I have already held there is no forfeiture of the quota. It is the personal circumstances of the Applicants which prevent them from utilising the quota attributed to them. What they are concerned with is the price limitation on which they may sell that quota. In my view the situation of the Applicants is governed by the Court of Justice in the Bostock case.
267. There is in any case parallel jurisprudence of the Court of Justice in its approach to the assertion of property rights in the context of the common organisation of the market in the agricultural sector. In this approach the Court of Justice, without declaring that the rights in question are in fact property rights, has dealt with the issue by defining the proper restrictions which in any event maybe placed on the exercise of property rights in the context of a common organisation of the market. In Schrader (C-265/87 [1989] ECR 2237 , the Court stated “ both the right to property and the freedom to pursue a trade or profession … do not constitute an unfettered prerogative, but must be viewed in the light of the social function of the activities protected thereunder. Consequently, the right to property and the freedom to pursue a trade or profession may be restricted, particularly in the context of a common organisation of the market, provided that those restrictions in fact correspond to objectives of general interest pursued by the community and that they do not constitute a disproportionate and intolerable interference which infringes upon the very substance of the rights guarantee ”.
268. This approach has been followed in successive cases and repeated in the Demand case where the Court stated, at paragraph 40, “ with regard to more particularly to right to property, which according to the Plaintiff in the main proceedings has been infringed, the Court held, in paragraphs 28 and 29 of Irish Farmers Associations , cited above, that the regulations in question form part of a body of legislation intended to remedy the surpluses on the milk market and therefore correspond to aims pursued by the community in the general interest and that the conversion into a definitive reduction without compensation does not affect the actual substance of that right ”.
269. In the ensuing paragraph it stated “ it must be added, regardless of the legal nature to be attributed to an additional reference quantity, but having regard to the persistence of surpluses, a definitive withdrawal of 4.74% of an additional reference quantity appears to be appropriate and necessary to achieve the aim of that measure, namely an enduring reduction of surpluses ”.
270. Having regard to the position of the Applicants as I have already outlined this case law also applies to their situation however their interest is regarded.
271. Accordingly I conclude that there are no property rights of the Applicants which have been infringed under community law.
272. The issue being clearly governed by decisions of the Court of Justice, there is no obligation to make a reference under the third paragraph of Article 234 of the E.C. Treaty (C-283/81 CILFIT -v- Ministry of Health [1982] ECR 3415, paras. 14,15).
273. Having regard to the conclusions which I have reached and those of Fennelly, J. in his judgment I would dismiss the appeal.
THE SUPREME COURT
Keane C.J.
Denham J
Murphy J.
Murray J.
Fennelly J.
340/2000
BETWEEN
NICHOLAS PHILIP (OTHERWISE MARTIN) MAHER
MALACHY BRETT AND RITA RYAN
APPLICANTS
AND
THE MINISTER FOR AGRICULTURE FOOD AND RURAL DEVELOPMENT IRELAND AND THE ATTORNEY GENERAL
RESPONDENTS
JUDGMENT delivered the 30th day of March, 2001 by FENNELLY J.
274. Each of the three applicants is a farmer in County Tipperary. Each is entitled to a reference quantity, commonly called a milk quota, for the production of milk on his or her holding. Each of the applicants has for a number of years, by reason of personal circumstances, leased either the relevant holding together with the milk quota or temporarily leased the milk quota itself. These arrangements permitted the applicants to continue to benefit from the milk quota entitlement without actively engaging in milk production. They were carried out in accordance with the milk-quota regulations in force.
275. The situation of the applicants was changed in the year 2000. The first respondent, the Minister for Agriculture Food and Rural Development (“the Minister”), made new regulations. The applicants may either have to resume active production or have their milk quotas sold for restructuring at a price determined by the Minister. They claim that this could not be done in the way the Minister did it, namely by regulations and without any act of the Oireachtas. Furthermore, the applicants say that their fundamental rights in respect of property have been infringed.
276. This case raises in a different form one of the issues which was decided by this Court in Meagher v Minister for Agriculture and Food and others [1994] 1 I.R. 329 ( “ Meagher” ) . It is necessary to consider further the relationship between European Community law and the constitutional prerogative of the Oireachtas as the sole law-making authority for the State.
Common Organisations of the Market
277. The Common Agricultural Policy of the European Community (“CAP”) is one of the foundations of the European Community. Although it is becoming normal to refer to the European Union, all the legal issues in the present case arise under the Treaty Establishing the European Community ( The EC Treaty). I will use the new numbering and form of numbering introduced by the Treaty of Amsterdam. Article 33EC states the objectives of the CAP, which include improved conditions of production, fair standards of living, stable markets and reasonable prices for consumers. It also provides that account should be taken of: “the particular nature of agricultural activity, which results from the social structure of agriculture and natural disparities between the various agricultural regions.”
278. The preferred mechanism for attainment of the objectives of the CAP is, as envisaged by Article 34EC, the common organisation of the market in individual product categories. A common organisation of the market “may include all measures required to attain the objectives set out in Article 33, in particular regulation of prices, aids for the production and marketing of the various products, storage and carryover arrangements and common machinery for stabilising imports and exports.” Article 37EC reserves the power to establish a common organisation of the market to the Council acting on a proposal from the Commission.
279. The basic common organisation of the market in milk products was laid down by Council Regulation (EEC) No 804/68 of 27 June 1968 (OJ English Special Edition 1968 (I), p. 176.) on the common organisation of the market in milk and milk products. Its aim was to guarantee to producers a common target price, supported by certain intervention measures.
280. This system failed, however, to resolve the more or less permanent market imbalance amounting to structural over-supply. The Community responded , inter alia, by introducing the so-called co-responsibility levy, via Council Regulation 1079/99 of 17 May 1977 (OJ 1977, L 131, p.60.) The levy was payable by producers at rates varying from 1.5% to 4% of the target price on all milk sold. (See Case 179/84 Bozzetti v Invernizzi [1985] ECR 2301.) Still the surpluses persisted.
281. This very serious situation furnished the setting for the introduction of what is commonly called either the super-levy or the milk quota system. Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) 804/68 …… of 31 March 1984 ( Regulation 856/84 ) commences by reciting that the “market in milk products in the Community is suffering from structural surpluses as a result of an imbalance between supply and demand…” In particular, it records in the third recital in the preamble that:
“..despite application of [the] co-responsibility levy, quantities of milk delivered are increasing at a rate such that disposal of surpluses is imposing financial burdens and market difficulties which are jeopardising the very future of the common agricultural policy.”
282. The essentials of the new regime, as it existed up to 1987, are succinctly summarised, and described as “revolutionary,” in the judgment of Murphy J in Lawlor v Minister for Agriculture [1990] 1 I.R. 356, at page 362 ( “Lawlor”). Regulation 856/84 contains the basic elements of the scheme and Council Regulation (EEC) No 857/84 of 31 March 1984 adopts, as its title states “general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector.” The core of the new system was the establishment of a structure of reference quantities at Community, national and producer level. The additional levy or super-levy was designed to penalise excess production by requiring the producer to pay an amount per gallon, the “super-levy” on any excess such that he would incur a loss. Hence the need to relate milk quota to landholding. In the result, the so-called milk quota came to be perceived, rightly or wrongly, as a species of property right enjoyed by those producers who met the initial conditions, or some later adjustments, to be awarded one. The regime was originally introduced for a five-year period, but has been renewed for successive periods. At present it is due to expire on 31 March 2008, but subject to a specific undertaking by the Council to conduct a mid-term review with a view to allowing it to run out after 2006.
283. What is in controversy in the present case is the aspect of the regime that regulates the relationship between the ownership of agricultural land and the milk quota derived from it. The applicants complain of changes to the rules regarding the transfer of holdings with milk quota attached and the rules regarding temporary transfer of milk quotas. These changes followed the adoption of Council Regulation (EEC) No 3950/92 of 28 December 1992 but especially of Council Regulation (EC) No 1256/99 of 17th May 1999. I will consider these changes in detail later in this judgment.
284. The present case centres essentially on the exercise by the State, by means of secondary legislation, of a number of options or discretions conferred by the Community rules. It is important to note from the outset that it is not suggested, in any respect, that the State has committed any infringement of Community law by exceeding the scope of the discretion conferred by those rules. The national rules are contained in the European Communities (Milk Quota) Regulations 2000 ( S. I. No. 94 of 2000) (the “2000 Regulations”) made in exercise of the powers conferred by section 3 of the European Communities Act 1972. The 2000 Regulations make changes in the existing regime insofar as it attaches milk quota to land, make provision for the adding of milk quota so detached from land to the national reserve and provide for the phasing out of the system of temporary transfers.
How the applicants are affected
285. The first-named applicant owns 130 acres of land, of which 36.17 acres have a milk quota of 28,170 gallons. The latter was awarded to him in 1990 under the so-called “Mulder” arrangements. The latter point in no way affects his legal position, except that the “Mulder” quotas were awarded to milk producers who had gone out of production temporarily under a Community scheme and this may explain why this applicant has not for some years been actively engaged in milk production.
286. This applicant leased his land to one Maurice Ryan from 1996 to 2000 at £83 per acre and 25p per gallon. He complains that his options are now limited to :
– renewal of the lease to Maurice Ryan, but nobody else;
– sale of his milk quota to Maurice Ryan only;
– resumption of milk production (which, due to his personal circumstances he is unable or unwilling to do);
– temporary transfer of his milk quota for one year only.
– sale into restructuring, but at a price to be fixed by the Minister.
287. He wishes to keep his land with milk quota until one or more of his children, now aged 14 and 16, are of an age to enter dairy farming if they so wish. He objects to being compelled, as he sees it to sell his milk quota to the Minister at “a pittance” i.e. the price likely to be fixed by the Minister.
288. It may be added that this applicant, if he resumed active milk production, would be entitled, after an interval of three years to sell his land with milk quota just as before.
289. The second-named applicant jointly owns with his wife 77 acres with a milk quota of 24,404 gallons. He is 76 years of age. For reasons of ill-health he has for some years, in part leased his lands with milk quota and, for the remainder (9404 gallons), has temporarily leased the milk quota to the local co-operative creamery.
290. Since he is deprived of the right to continue the practice of temporary transfer and may not lease land and milk quota on the open market, he says his only options are:
– to resume production;
– to sell into the restructuring scheme.
291. The third-named applicant is the owner of twenty acres of land with milk quota of 11,844 gallons. She has for a number of years availed of the right of temporary transfer of the entire of this milk quota to the local co-op. She cannot continue the temporary transfer without the consent of the Minister. She sees her only options as being the resumption of milk production or sale into restructuring on the Ministers terms.
292. The applicants say that they are placed at a disadvantage by being prevented from leasing land and milk quota and/or temporarily leasing milk quota (where relevant) at open market rates. In particular the Minister has indicated a price for the sale of milk quota into restructuring of £1.36 (said to be about to descend to £1.00) per gallon as against an open-market price of £3.00. This, they claim, amounts to a regime of compulsory purchase of their milk quota.
The Proceedings
293. The applicants applied for judicial review of the 2000 Regulations. Mr Patrick Evans, of the Milk Policy Division of the Department of Agriculture gave on affidavit a very comprehensive account of the milk quota system. The matter was heard by Miss Justice Carroll, in the High Court. The applicants argued that the aspects of the 2000 Regulations complained of, to the extent that they consisted of the exercise by the State of options, represented the making of policy choices and could not, therefore, be considered to be necessitated by membership of the European Communities for the purpose of Article 29.4.7 of the Constitution. Consequently, they could be enacted only by primary legislation. The right of a holder of milk quota to sell his land with quota attached could not be restricted or abolished by secondary legislation. Accordingly, the 2000 Regulations were introduced in contravention of Article 15.2.1 of the Constitution.
294. Miss Justice Carroll dismissed the claim of the applicants. She held that “the Minister was entitled to make the decision that quotas should go to active milk producers which was in accordance with the stated policy under the milk quota council Regulations.”
295. She explained her conclusion as follows:
” In my view , SI 2000 even though it involved the making of choices within the framework of the principles and policies of the milk quota scheme, was necessitated by the obligations of membership of the EU. Precisely because those choices were within the principles and policies of the milk quota scheme, it can equally well be viewed as permitted secondary legislation which is not contrary to Article 15.2.1 of the Constitution.”
296. The applicants have appealed to this Court. The say principally that the learned trial judge erred in law in holding that the Minister was merely executing principles and policies laid down in Community regulations. They state rather that, in making the choices which he did, he made decisions which themselves involved policy choices which could be made only by primary legislation passed by the Oireachtas. They also state that the 2000 Regulations infringe their property rights as guaranteed by the Constitution and/or by Community law.
The applicants submissions
297. The applicants claim that the 2000 Regulations are not necessitated, principally because they consist of the exercise of choice, by the obligations of membership of the Community and secondly that they are not within the ambit of principles and policies laid down in the Community regulations.
298. It seems to me more logical to approach these two questions in the reverse order. Firstly, do the 2000 Regulations represent a valid exercise by the Minister of the powers delegated to him considering the Constitution, the European Communities Acts and the Community regulations? If they do, they are permitted and valid and the question of whether they are necessitated does not arise.
299. The applicants submitted that Regulation 1256/99 allowed Member States such broad discretion that it involved for this State the making of significant choices in respect of fundamental principles and policies. It amounted to the return of broad measures of legislative power to the Member States. Wherever Community law does not lay down common rules as part of the common organisation of the market in milk and milk products, the recent case-law of the Court of Justice shows that the national authorities “act in accordance with the procedural and substantive rules of their own national law…” ( Case C- 285/93 Dominikanerinnen-Kloster Altenhohenau v Hauptzollamt Rosenheim [1995] ECR I- 4069, paragraph 26; Case C-292/97 Kjell Karlsson and others v [2000] ECR I-2737). In any event, at a general level, national measures implementing a regulation provided for by the regulation itself are “governed by the public law of the Member State in question.” (Case 230/78 Eridania v Minister for Agriculture and Forestry [1979] ECR 2749, paragraph 33).
300. In such a situation and, in the light of the decision in Meagher, Article 15.2.1 of the Constitution requires that delegated legislation should not stray beyond the principles and policies laid down in the parent act. The constitutional constraints on secondary legislation could not be dispensed with. The applicants also relied on a range of decisions of the High Court and of this Court.
301. Insofar as land transfers and the operation of the restructuring scheme is concerned the Minister has made important policy choices in the 2000 Regulations:
– deciding whether to maintain the link between land and milk quota and on the cases in which the link would cease to apply;
– adopting rules to exempt inter-family transfers from the changes made;
– deciding on the reversion of milk quota to the national reserve in the case of expiring leases;
– deciding on the extent to which active milk producers could transfer land with quota;
– making choices between the five permitted methods of transfer of milk quota set out in Article 8 of Regulation 3950/92 as amended by Regulation 1256/99;
– determining the maximum payment for the surrender of milk quota;
302. The applicants lay special emphasis on the important policy choices made by the Minister in breaking the link between land and milk quota. They contest the existence of any Community policy to favour active milk producers. Article 8a confers a discretionary power only. The exercise of the latter must be subjected to the test laid down by this court in Cityview Press v An Comhairle Oiliuna [1980] I.R. 381. The relevant principles and policies must be set out in the governing statute. In the present instance, they are not set out in the Community Regulations so that the 2000 Regulations represent an impermissible exercise by the executive of legislative power and are, for that reason, invalid.
303. Moreover, the 2000 Regulations consist of the exercise of options or the making of choices of a fundamental kind. Even though the occasion for their making derives from Community legislation, they are not mandatory or obligatory. Hence, they are not “necessitated by the obligations of membership of the European Union or of the Communities.” Consequently, they do not benefit from the exemption conferred by Article 29.4.7 of the Constitution from scrutiny for any infringement of its other provisions, in particular Article 15.2.1. In this context, the Court was invited to consider the change made in the course of the legislative process leading to the passing by the people of the necessary constitutional amendment to permit accession by the State to membership of the Community from “consequent upon” to “necessitated” in the wording now found in Article 29.4.7 of the Constitution.
304. Although the Court in Meagher upheld the constitutionality of the European Communities Act, 1972, in conferring wide power on the State to implement provisions of Community law by using the forms of delegated legislation, the judgment of the Court in that case clearly envisaged circumstances in which an exercise of that power could be held to be unconstitutional. The applicants took issue with the judgments in Meagher and certain High Court judgments, as well as the judgment of the learned trial judge insofar as they gave a broad meaning to the expression, “necessitated.”
305. If the applicants fail in all of their arguments aimed at impugning the validity of the 2000 Regulations, they say that the latter constitute an improper invasion of their rights of property, specifically in their rights in respect of milk quota. As they represent the exercise of discretion, they are not “necessitated” and not protected by Article 29.4.7 from other provisions of the Constitution. They fairly concede that the case-law, specifically Case 2/92 R v Ministry of Agriculture, ex p. Bostock [1994] ECR I- 995, (“Bostock”) is against them. Milk quota is not considered by the Court of Justice to be a property right. They cite a recent opinion of Advocate General Ruiz-Jarabo Colomer (Case C-186/96 Demand v Hauptzollamt Trier [1998] ECR I-8529) to suggest that change is possible. They also say that Community law does not prevent national law from offering a higher level of protection (Case C-63/93 Duff v Minister for Agriculture [1996] ECR I-569, Advocate General Cosmas Opinion, paragraph 60, and Duff v Minister for Agriculture [1997] I.R. 22.)
The respondents submissions
306. The respondents take issue with the applicants in respect both of the permissibility of the 2000 Regulations and their necessity.
307. The sole purpose of the 2000 Regulations was to give effect to Regulation 3950/92 and Regulation 1256/99. These have general application in Irish law by virtue of Article 249EC. Their role is analogous to an act of the Oireachtas and all relevant principles and policies are to be found in this basic enabling legislation. The 2000 Regulations are thus intra vires the powers conferred by section 3 of the European Communities Act, 1972 (“the act of 1972″). They were, in any event, necessitated by the obligations of membership of the European Community.
308. The respondents contend, in particular, that Regulation 3950/92 and Regulation 1256/99 disclose the existence of Community policies :
– favouring the putting of milk quota in the hands of active milk producers;
– reducing the costs of production;
– improving the structure of milk production.
309. The respondents contest, in particular, the applicants claim that a large body of legislative power has been returned to the Member States. All national rules must be approved by the Commission. In practice, they are always discussed in advance. The national rules at issue in this case are detailed rules and make limited permissible variations in the common organisation of the market.
310. Significant exceptions to the rule of the transfer of land with milk quota existed from 1984 and have been progressively extended. The changes made by Regulation 1256/99 were only the last in a series of exceptions. The Minister was constrained by the very precise objective set out in Article 8a, i.e., “the aim of ensuring that reference quantities are solely attributed to milk producers” as well as the general principles of Community law. Furthermore, the Minister has no power to determine the destiny of milk quota which he permits not to be transferred with land. It must, in accordance with Article 7(1), be added to the national reserve.
311. Similarly, restructuring has long been expressed as an objective of the Community regulations, as can be seen, in particular, from Article 8 of Regulation 3950/92 Restructuring has existed before and independently of changes in the rules regarding the transfer of quota.
312. This State has not exercised the option not to implement temporary transfer, as permitted by Article 6(2) of Regulation 3950/92 . It is accordingly implementing the mandatory obligation expressed in Article 6(1) to introduce a temporary leasing scheme within the scope of very limited options. Reliance is placed on the definition of producers to show that the Minister , in Regulation 27(3) was implementing Community policy. The Applicants are not producers.
313. In accordance with the case-law of the Court of Justice, in particular Bostock, the enjoyment of a reference quantity or milk quota does not amount to a property right.
The Constitution: the Oireachtas as Sole Legislator
314. The main issue is whether the 2000 Regulations represent impermissible and invalid legislation, taking the form of a statutory instrument, in circumstances where primary legislation is required. The Constitution, the act of 1972 and the EC Treaty all have a bearing on the issue. It is also necessary to consider the principal authorities, especially Meagher.
Article 15.2.1 of the Constitution provides:
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has power to make laws for the State.”
315. An enormous body of subordinate laws is, nonetheless, constantly passed by means of statutory instruments, regulations and orders. This type of delegated legislation is, by common accord, indispensable for the functioning of the modern state. The necessary regulation of many branches of social and economic activity involves the framing of rules at a level of detail that would inappropriately burden the capacity of the legislature. The evaluation of complex technical problems is better left to the implementing rules. They are not, in their nature such as to involve the concerns and take up the time of the legislature. Furthermore, there is frequently a need for a measure of flexibility and capacity for rapid adjustment to meet changing circumstances. Without suggesting that a different approach is required for the present case, by reason of the fact that it concerns the implementation of European Community legislation, it is obvious that the adoption of detailed rules regulating production and trade in agricultural products is a particularly notable example of the exigencies of this type of law-making. There is, for example, an obvious need to be able to react rapidly and often severely to sudden trading problems or so as to protect human and animal health in the face of the outbreak of disease.
316. On the other hand, it is obvious that secondary legislation largely by-passes parliamentary scrutiny and the democratic process. Thus, the courts have found it necessary to strike an appropriate balance between the protection of the exclusive law-making domain of the Oireachtas and the proper function of the executive. The distinction is a functional one, aimed at designating the proper bounds of legislative and executive power. Delegated legislation is permitted and does not infringe Article 15.2.1, provided that the principles and policies which it is the objective of the law to pursue can be discerned from the act passed by the Oireachtas so that the delegated power can only be exercised within the four walls of the law. This serves the double purpose of preserving the legislative prerogatives of the Oireachtas and assuring those affected by orders or regulations that the courts may be asked to police the bounds set by the law and, if necessary, to declare them to be ultra vires the powers of the Minister or other delegated authority.
Cityview Press remains the leading authority on the permissible bounds of delegation of legislative power. It concerned powers to impose a levy to finance ANC, the industrial training authority. ANC could, inter alia , fix the amount of the levy as well as the categories of persons who were bound to pay it. The judgment of the Court, given in response to a claim that the empowering statute was unconstitutional, was delivered by OHiggins C.J.. The leading passage reads as follows:
“…the ultimate responsibility rests with the Courts to ensure that constitutional safeguards remain, and that the exclusive authority of the National Parliament in the field of law-making is not eroded by a delegation of power which is neither contemplated nor permitted by the Constitution. In discharging that responsibility, the Courts will have regard to where and by what authority the law in question purports to have been made. In the view of this Court, the test is whether that which is challenged as an unauthorised delegation of parliamentary power is more than a mere giving of effect to principles and policies which are contained in the statute itself. If it be, then it is not authorised; for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so by the Constitution. On the other hand, if it be within the permitted limits- if the law is laid down in the statute and details only are filled in or completed by the designated Minister or subordinate body – there is no unauthorised delegation of legislative power.”
317. In the event, the Court held that the act in question contained “clear declarations of policies and aims” and that there had been no “unconstitutional delegation of authority.”
Apart from Meagher, the principal recent authority of this Court is Laurentiu v Minister for Justice [2000] I.L.R.M. 1. That case is notable for the discussion in the leading majority judgments of Denham and Keane JJ of the antecedents of the test based on principles and policies in the common law countries and its place in the constitutional scheme of separation of powers. Denham J stated at page 22:
“There are limits to permissible delegation by the organs created by the Constitution . The Oireachtas may not abdicate its power to legislate. To abdicate would be to impugn the constitutional scheme. The scheme envisages the powers (legislative, executive, judicial) being exercised by the three branches of government-not any other body. The framework of the Constitution, the separation of powers, the division of power, retains a system which divides by function the powers of government to enable checks and balances to benefit democratic government. Also, in accordance with the democratic basis of the Constitution, it is the peoples representatives who make the law, who determine the principles and policies. The checks and balances work as between the three branches of government- not elsewhere. Thus Article 15.2 must not be analysed in isolation but as part of the scheme of the separation of powers in the Constitution.”
318. This passage contains a proper emphasis on the essential part of the Oireachtas in preserving and assuring the democratic nature of the State. Article 15.2 also performs the function, recalled by Barrington J in his dissenting judgement of striking “a balance between the rights of individual citizens and the exigencies of the common good.”
319. As to the application of the test of principles and policies, Denham J went on to point out that: “Each case depends on its own facts and requires that the principles and policies ….be set out in the legislation.”
320. In the case in question, it was held that the Aliens Act, 1935 failed the test, since it contained no discernible principles or policies at all. The test, however, remains intact. It provides the basis for deciding whether a given legislative act abdicates the exclusive authority of the Oireachtas. It is intrinsic to the test, and is important in the present case, that the named executor of delegated authority has power and discretion to make decisions within the four walls of the governing statute. For example, The State (Sheehan v Government of Ireland [1987] I.R. 555 shows that a discretionary power may, in certain circumstances, be so expressed that the decision whether to exercise it at all may be postponed indefinitely .
Delegated legislation: Community Law
321. The case which is most material to the present discussion is Meagher and not merely because it concerned the implementation in Irish law of a directive adopted by the Community legislature.
322. Before embarking on a consideration of the relevance of Meagher to the present case, it is necessary to recall the changes to the constitutional and legal structure of this State resulting from membership of the European Communities and later the European Union and to refer to the provisions of the EC Treaty which are principally concerned. The import of Meagher cannot be considered in isolation.
323. The first important constitutional provision is Article 29.4.3 introduced by the Third Amendment to the Constitution in 1972 under which it was provided that “The State [might] become a member of the ………European Economic Community.” Article 29.4, paragraphs 3, 4, and 5, respectively authorised the State by means of successive constitutional amendments to ratify the Single European Act in 1987, the Treaty on European Union (the Maastricht Treaty) in 1992 and the Treaty of Amsterdam in 1997. It emerges clearly from the judgment of this Court in Crotty v An Taoiseach [1987] IR 713 that the legislative capacity of the Council (and, since then, increasingly the European Parliament as co-legislator) seriously encroaches on the legislative sovereignty of the State.
324. Article 29.4.7 provides in addition that:
“No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State which are necessitated by the obligations of membership of the European Union or the Communities, or prevents laws enacted, acts done or measures adopted by the European Union or by the Communities or by the institutions thereof, or by the bodies competent under the Treaties establishing the Communities, from having the full force of law in the State.”
325. The Community regulations giving effect to the common organisation of the market in milk and milk products are “first pillar Community measures, i.e. they were adopted under the EC Treaty. Accordingly, it is unnecessary, in the present case, to have regard to any acts or measures adopted under the Treaty on European Union. Furthermore, it is probable that the authority to ratify the respective Treaties, in particular, the EC Treaty provide sufficient basis, in Community law terms, for the full effect in Irish law of directly applicable Community measures, even without the additional protection provided by Article 29.4.7.
326. The first two paragraphs of Article 249EC provide:
“In order to carry out their task and in accordance with the provisions of this Treaty, the European Parliament acting jointly with the Council, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or deliver opinions.
“A regulation shall have general application. It shall be binding in its entirety and directly applicable in all the Member States.”
327. The first paragraph of Article 10EC (formerly Article 5), which is also relevant, provides:
“ Member States shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Communitys tasks.”
328. Community regulations are directly applicable; their entry into force and their application are “independent of any measure adopting [them] into national law.” ( Case 94/77 Zerbone v Amministrazione delle Finanze dello Stato [1978] ECR 99, paragraph 23.) As Denham J. explains, in different words, they do not require any national act of implementation for their binding effect. Indeed, where they are, in their own terms, capable of being directly applied, it has been said that: “ Member States must not adopt or allow national institutions with a legislative power to adopt a measure by which the Community nature of a legal rule and the consequences which arise from it are obscured.” ( ibid. paragraph 26.)
329. Where, however, as frequently happens especially in the case of a common organisation of the market, regulations, in addition to being directly applicable, allow Member States discretion in their implementation, some national act of implementation or transposition will be required. Then the principle cited by the applicants from the judgment of the Court of Justice in Eridania comes in. The Court there, at paragraph 34 of the judgment, said:
“The fact that a regulation is directly applicable does not prevent the provisions of that regulation from empowering a Community institution or a Member State to take implementing measures. In the latter case the detailed rules for the exercise of that power are governed by the public law of the Member State in question; however, the direct applicability of the measure empowering the Member State to take the national measures in question will mean that the national courts may ascertain whether such national measures are in accordance with the content of the Community regulation.” .
330. Clearly, the last sentence refers to the right of the courts of the Member States to refer questions of interpretation to the Court of Justice pursuant to Article 234EC (then Article 177 of the Treaty).
331. Counsel for the applicants drew attention specifically to the remark of Advocate General, at page 2787:
“But where a provision in Community legislation confers a discretion on a Member State it is open to that Member State to enact legislation for the purpose of implementing that provision. To what extent such legislation may be necessary , o r administrative action may suffice, is a matter to be determined by that Member State s own law, including where appropriate its constitutional law. ”
332. As was observed succinctly by Lord Hoffman, “Community law is indifferent to the internal arrangements of power within a member state.” (R v Secretary of State for Heath [2001] 1 All ER, 850 at 860) .
333. These passages must be read with those, also cited by the applicant, from the more recent case-law on milk quotas. It will suffice to quote the following from the judgment in Dominikanerinnen-Kloster (paragraph 26):
“It should, first, be recalled that …….. the Court [has held] that according to the general principles on which Community law is based and which govern the relations between the Community and the Member States , it is for the Member States, by virtue of Article 5 of the Treaty, to ensure that Community regulations are implemented within their territory. In so far as Community law , including its general principles, does not include common rules to this effect, the national authorities when implementing Community regulations act in accordance with the procedural and substantive rules of their own national law; however, these national rules must be reconciled with the need to apply Community law uniformly so as to avoid unequal treatment of producers and traders. Furthermore, such rules must not have the effect of making it virtually impossible to implement Community regulations……”
334. The applicants claim that a broad measure of competence has been returned to the Member States will be examined on its merits by reference to Regulation 3950/92 and Regulation 1256/99. However, Member States have limited scope for independent action when dealing with milk quotas. They cannot take action to grant them to fill a gap left by the amendment of a Community Regulation (Case C-127/94 R v MAFF esp. Eckroyd [1996] ELR I – 2741.) I believe it is possible to say that the passages just quoted do not give any support to the applicants’ claim that Member States act autonomously in making choices when implementing Community rules. They establish the following propositions.
335. Firstly, in the absence of common rules, or where Community law authorises such action, Member States may adopt their own national rules. Secondly, by virtue, inter alia, of Article 10EC (formerly Article 5 of the Treaty), Member States must ensure the implementation of Community regulations and take no action to undermine them. Thirdly, in doing so, they are implementing Community law, with the result that general principles of Community law, notably the principle of equal treatment but also the fundamental rights protected in the Community legal order must be respected. Fourthly, Community law is indifferent as to the national method of implementation ( subject to the principle of effectiveness as explained in the passage from Dominikanerinnen-Kloster as well as the principle of equivalence, i.e., that rights under Community law are treated no less favourably than those granted by national law). For present purposes, that indifference relates to the choice between legislation and regulation.
336. In summary, Member States, acting within the framework of Community regulations, exercise powers or discretions which are conferred on them for the furtherance of the objectives of the scheme in question. Community law does not require any particular form of implementation. That is a matter for the legal system of the Member State concerned, except that the implementation must not have the effect of impeding the effectiveness of Community law.
337. The European Communities Act, 1972 contains the following provisions:
“2. From the 1 st day of January, 1973, the treaties governing the European Communities and the existing and future acts adopted by the institutions of those Communities shall be binding on the State and shall be part of the domestic law thereof under the conditions laid down in those treaties.”
“3.(1) A Minister of State may make regulations for enabling section 2 of this act to have full effect.
(2) Regulations under this section may contain such incidental, supplementary and consequential provisions as appear to the Minister making the regulations to be necessary for the purposes of the regulations (including provisions for the repealing, amending or applying, with or without modification, other law, exclusive of this Act.”
338. Whatever view might be taken by the Court of Justice regarding the direct effect of treaty provisions or acts of secondary legislation, section 2 was clearly an essential part of the machinery for giving effect to those provisions as a matter of Irish law, in view of
339. Article 29.6 of the Constitution. For the purposes of the present case, it has the effect of making Articles 10EC and 249EC part of the law of the State.
340. It is the effect of section 3(1) which is in issue. The applicants accept, as they must, that the act of 1972, as was found in Meagher is compatible with the Constitution. However, they rely on the reiteration in the judgment of the Court, on that issue, of the principle that legislation must be so interpreted as not to be in conflict with the Constitution, in particular that an act cannot be interpreted so as to invade the exclusive legislative domain of the Oireachtas. Finlay C. J., delivering the judgment of the court stated at page 352:
“In so far as it may be possible to point to hypothetical instances of certain types of laws, measure or acts of the Community or Union which in their implementation or application within the national law might not, as to the method of implementation or application, be necessarily carried out by ministerial regulation, but rather should have been carried out by enactment of law by the Oireachtas, the Court is satisfied, without deciding that such instances do occur, that the principles laid down by this Court in the decision of East Donegal Co-Operative Livestock Marts Ltd. v. Attorney General [1970] I.R. 317, must be applied to the construction of the impugned subsection in the manner in which it was applied by the decision of this Court in Harvey v. The Minister for Social Welfare [1990] 2 I.R.. 232 to the construction of the section of the statute impugned in that case, namely, s. 75 of the Social Welfare Act, 1952. That principle is that it must be implied that the making of regulations by the Minister, as is permitted by the section, is intended by the Oireachtas to be conducted in accordance with the principles of constitutional justice, and therefore that it is to be implied that the Minister shall not in exercising the power of making regulations pursuant to the section, contravene any provision of the Constitution.
“If therefore in such an instance challenge were to be made to the validity of a ministerial regulation having regard to the absence of necessity for it to be carried out by regulation instead of legislation and having regard to the nature of the content of such regulation it would have to be a challenge made on the basis that the regulation was invalid as ultra vires being an unconstitutional exercise by the Minister of the power constitutionally conferred upon him by the section.”
341. The early part of this passage might be read as implying that, in some circumstances, the implementation of Community law is necessarily, by reasons of the demands of Community law itself, carried out by regulation. It is clear, however, from the second quoted paragraph that this reading is not what was intended; in any event, as shown above, Community law makes no such demands. The issue of “necessity” is appropriately considered by reference to the content, not the form, of the instrument.
342. Consequently, it is perfectly possible for the courts, at least at the level of general principle, to apply the principles and policies test laid down in the case-law on Article 15.2.1 without any conflict with Community law. That test is designed, as is clear from the judgment of Denham J in Laurentiu, to protect the democratic basis of government, a principle which finds expression in the EC Treaty and in the judgments of the Court of Justice. Article 6 of the Treaty on European Union records that:
“The Union is founded on the principles of liberty, democracy , respect for human rights and fundamental freedoms, and the rule of law, principles which are common to the Member States.”
343. The second part of the decision in Meagher deals with the application of the principles and policies test to the implementation by means of a regulation made under the act of 1972 of Community law in the form of a Council directive. Blayney and Denham JJ delivered individual judgments, with which Finlay C. J. and OFlaherty and Egan JJ agreed.
344. The two directives at issue concerned the prohibition of use of certain animal-growth hormonal substances. The State had included respectively a power to search farms and an extension of the time fixed by statute for commencing prosecutions of offences in ministerial implementing regulations. Blayney J decided that the directives could not be implemented without the first provision and that an extension of the time for prosecution was necessary. He reiterated the principle of the supremacy of Community law over national law and held that the national measures in controversy were “necessitated by the directive.” His determination of the issue followed from an analysis of Community law provisions . The respondents argued in this case that, on a true analysis of the Community directives, Ireland as a Member State had discretion and was not bound to adopt the particular implementing measures and that the Court still found them to be “necessitated”. That is, in my view, to miss the point and to confuse the interpretation of Article 29.4.7 of the Constitution with the interpretation of Community law. The fact is that, rightly or wrongly, Blayney J held that the provisions in question were required by Community law . Denham J shortly expressed the same opinion (page 363). This result is the same as would have followed if questions of interpretation of the relevant provisions had been referred to the Court of Justice and the latter had ruled that the adoption of the two provisions in controversy constituted Community-law obligations of the State.
345. Denham J made it clear, however, that this was not the end of the matter. She said:
“If the directive left to the national authority matters of principle or policy to be determined then the “choice” of the Minister would require legislation by the Oireachtas. But where there is no case made that principles or policies have to be determined by the national authority, where the situation is that the principles and policies were determined in the directive, then legislation by a delegated form, by regulation, is a valid choice. The fact that an act of the Oireachtas has been affected by the policy in a directive, is a “result to be achieved” wherein there is now no choice between the policy and the national act . The policy of the directive must succeed. Thus where there is in fact no choice on a policy or a principle it is a matter appropriate for delegated legislation. If the directive or the minister envisaged any choice of principle or policy then it would require legislation by the Oireachtas.”
Meagher is clear authority for the proposition that, where a provision of Community law imposes obligations on the State, leaving no room (or perhaps no significant room) for choice, then Article 15.2.1 of the Constitution is not infringed by the use of ministerial regulation to implement it. Both the judgment of the Court and that of Denham J expressly preserve the force of that provision, as it has been interpreted, for cases where such an obligation does not exist. The “principles and policies” test applies mutatis mutandis where the delegated legislation represents an exercise of a power or discretion arising from Community-law secondary legislation. It applies with particular clarity to the case of directives where Article 249EC leaves the choice of forms and methods to the Member States. The question will not arise so frequently in the case of regulations since they are directly applicable without the need for national implementing measures. Where a regulation leaves open a range of choice, the test will apply. Each case will have to be decided on its own merits. The mere existence of a Community regulation implies some sort of Community policy. Article 253EC obliges the Community legislature to state in such acts “the reasons on which they are based.” Member State implementing measures come inherently within the scope of such a stated policy. However, the principle of the applicability of the test is a recognition of the possibility that the choices left to the Member States may be of such significance in their nature or scope or so unconnected with Community policies and aims that they require legislation and that resort to regulations in such cases would infringe Article 15.2.1. On its facts, Greene v Minister for Agriculture [1990] 2 I.L.R.M. could have been such a case, though Article 15.21 was not in issue. The Community rules allowed Member States to “lay down additional or restrictive conditions” one of which was held by Murphy J. to infringe Article 41 of the Constitution.
346. I should say that I fully agree with the judgment of the Chief Justice in his analysis of Meagher and with his conclusion that none of the measures impugned in this case was “necessitated by the obligations of membership.” I also agree, consequently, that the essential question is whether the Minister was in breach of Article 15.2.1 of the Constitution. If he was, the 2000 Regulations will be invalid, since, unlike those involved in Meagher, they are not “necessitated”.
Applying the test
347. I will deal, firstly, with the change in the rules linking land and milk quota. From the outset, the Community rules envisaged that, in general, agricultural land used for milk production would be transferred only with the relevant milk quota attached. The original provision was Article 7(1) of Regulation 857/84, which provided:
“Where an undertaking is sold, leased or transferred by inheritance, all or part of the corresponding reference quantity shall be transferred to the purchaser, tenant or heir according to procedures to be determined.”
348. There were differences between Formula A (where the milk quota is allocated to producers) and Formula B, adopted in Ireland, (where it is allocated to purchasers). However, rules were formulated to ensure that the same rules would apply where Formula B was adopted. (See Commission Regulation (EEC) No 1374/84, Article 5 and Murphy J in Lawlor, page 3640).
349. It may be noted that this provision was not founded on any explicit reasoning to be found in any of the recitals in the preamble to the regulation. The respondents argument that there were significant exceptions from the beginning to the rule of transfer of land with milk quota is not convincing. Article 7(3) merely provided part of the reference quantities might be added to the national reserve. Article 4, which was also invoked, authorised Member States to compensate milk “producers undertaking to discontinue milk production definitively” and to add the amounts so freed to the national reserve. Ireland did not, in fact, exercise these options. I am similarly unconvinced by a number of other examples of special exceptions which were cited from the years 1985 to 1987. It seems clear that the Community, as of 1984, opted firmly for a policy that land could be transferred only with the milk quota attached.
350. Regulation 857/84 was repealed by Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector. The fourteenth introductory recital to that Regulation states:
“Whereas when the additional levy system was brought in in 1984, the principle was established that when an undertaking was sold, leased or transferred by inheritance, the corresponding reference quantity was transferred to the purchaser, tenant or heir;
whereas this original decision should not be changed; whereas, however, national provisions to safeguard the legitimate interests of the parties should be implemented in all cases of transfer, where the parties are not in agreement;”
351. In the event, Article 7 was re-enacted by Regulation 3950/92 with some changes which are immaterial to the present case. Article 8 of Regulation 3950/92 provide for some other limited exceptions such as transfer to the national reserve when land is transferred for improvement of the environment. It also authorised Member States, with a view to restructuring of milk production, to permit transfer of reference quantities without the corresponding land “with the aim of improving the structure of milk production at the level of the holding.” Generally, however, the link between land and milk quota was maintained.
352. This prohibition on sale or transfer of land without milk quota, because it was effected by a regulation was, of course, directly applicable in Irish law and needed no further enactment to give it effect. It was, nonetheless, reinforced, as the applicants point out, by penal provisions in Regulation 12(1) of the European Communities (Milk Levy) Regulations, 1985 (S. I. No. 416 0f 1985) and by Regulation 4 of the European Communities (Milk Quota) Regulations , 1995 (S. I. No 266 of 1995)( the “1995 S.I.”)
353. Council Regulation (EC) No 1256/99 of 17 May 1999 amending Regulation (EEC) No Regulation 3950/92 ……. authorised radical change in the rules regarding the maintenance of the link between land and milk quota on sale or transfer.
354. Article 8 of Regulation 1256/99 replaces Article 7(1) of Regulation 3950/92 as follows:
“Reference quantities available on a holding shall be transferred with the holding in the case of sale, lease or transfer by inheritance to the producers taking it over in accordance with detailed rules to be determined by the Member States….”
355. At the same time, Article 1(10) of Regulation 1256/99 inserts a new Article 8a into Regulation 3950/92, which provides:
“Acting in compliance with the general principles of Community law, Member States may take the following measures, with the aim of ensuring that reference quantities are solely attributed to active milk producers:
(a)…..
(b) Member States may decide not to apply the provisions on transfer of reference quantities in Article 7(1).”
356. The changes in the rules made by the Minister, the 2000 Regulations, regarding attachment of land to milk quota commence with Regulation 5(1) which provides, in relevant part:
“(1) Subject to the exceptions provided for in Regulations 6, 7, 8, 9, 10, and 11, where any holding, or part thereof, is transferred the milk quota attached to that holding or part thereof shall not be transferred to the person to whom the transfer is made;
“(2) Where there is a transfer of land to which milk quota attaches then, such milk quota shall be added to the national reserve unless Regulation 6, 7, 8, 9, 10, 11, 19, 20, 21, or 22 have been availed of …”
357. This amounts to a clear and explicit decision by the State to avail of the power given by Community law to break the link between land and milk quota. There are a number of exceptions. The applicants say that both by deciding to exercise that option and in choosing the exceptions, the Minister was impermissibly legislating.
358. It is crucial to this issue to discern whether, in making this decision, the State is pursuing a Community objective or, recalling the applicants contention that power has been returned to the Member States, a purely national one. The power not to apply the provisions of Article 7(1) is given by Article 8a, inserted by Article 1(10) of Regulation 1256/99. That Article permits Member States to take such action “with the aim of ensuring that reference quantities are solely attributed to active milk producers…” This reflects policy expressed in the fourth recital in the preamble:
“Whereas the experience with the additional levy has shown that the transfer of reference quantities through legal constructions such as leases which do not necessarily lead to a permanent allocation of the reference quantities concerned to the transferee, can be an additional cost factor for milk production hampering the improvement of production structures; whereas, in order to strengthen the reference quantities character as a means of regulating the market of milk and milk products, the Member States should be authorised to allocate reference quantities, which have been transferred through leases or comparable legal means, to the national reserve for re-distribution, on the basis of objective criteria to active producers in particular to those who have used them before; whereas Member States should also have the right to organise the transfer of reference quantities in a different way than by the means of individual transactions between producers; whereas it should be explicitly provided, in particular with a view to taking account adequately of existing legal rights, that, when using these authorisations, Member States are to take the necessary measures to comply with the general principles of Community law;..”
359. I believe that this recital and the general scheme of the milk quota regime demonstrate that the State is acting as a delegate of the Community in making the choice to separate land and milk quota. As is shown by the case-law, the fact that Community regulations authorise the Member States to exercise discretion does not take action of the latter kind outside the scope of the Community regime. Member State discretionary action is circumscribed by the objectives of the scheme authorising it. The milk quota is itself a creature entirely of Community law. Member States are bound, by virtue of Article 10EC (formerly Article 5 of the Treaty), to ensure that Community law is implemented; national rules must comply with the general principles of Community law and the particular rules which apply. In the instant circumstances, Member States are authorised to act only to achieve the aim of ensuring that reference quantities are attributed to producers. Any action by the State in pursuit of a an unauthorised objective would be susceptible of challenge, by means of an infringement action pursuant to Article 226EC in the Court of Justice as being contrary to the terms of Regulation 1256/99.
360. Thus, applying the principles and policies test on the basis that Regulation 1256/99 stands in the place of an act of the Oireachtas, I believe that the State, in adopting Regulation 5 of the 2000 Regulations was exercising a power expressly conferred and for the purpose for which it was given.
361. In the light of that conclusion, it is probably not necessary to give separate consideration to the exceptions. They consist of modifications to the departure from the link of land and milk quota. However, they were argued as constituting distinct legislative choices.
362. The principal exceptions which have been canvassed in argument before the Court are those in Regulations 6, 7, 9 and 10. It will be sufficient to refer to these for the purpose of evaluating the extent and the nature of the legislative power exercised by the Minister in making the 2000 Regulations.
363. Regulation 6 provides that the “ milk quota attached to a holding shall be transferred” in the case of “sale, lease, gift or inheritance by a person to a relative of that person…,” a term defined in Regulation 6(2). It includes spouses, parents, children, brothers, sisters, grandparents, grandchildren, uncles and aunts. It is suggested that this also involves the making of a legislative choice not contemplated by Community law. It is not clear that the applicants have any independent interest in challenging this provision. It would not benefit them if it were annulled. Their claim is in reality that the Minister did not have the power, by regulation, to end the link of land to milk quota in the event of sale or transfer. For what it is worth, however, I believe that this exception would be held to fall comfortably within the power conferred on the Member States by the regulation. I have already referred to the inclusion of “the social structure of agriculture” among the considerations relevant to the common agricultural policy. If it is correct to say that Member States are authorised by Community law to restrict or end the rule that milk quota transfers with land, there is no basis – and none has been suggested – for saying that Community law would regard it as impermissible to make an exception for certain defined family transactions. The wording of Article 7(1) has at all times included “transfer by inheritance” among the cases where the link would apply. There is enough evidence in the case-law cited to the Court ( Case C-313/89 Rauh [1991] ECR I- 1647; Case C-44/89 von Deetzen v Hauptzollamt Oldenberg [1991] ECR I-5119 “von Deetzen” ) to show, not surprisingly, that the Court of Justice interprets provisions of Community law so as to favour family transactions. As already noted, Article 33EC requires account to be taken of “the social structure of agriculture,” which unarguably includes the family basis of farm ownership. The relaxation of the new rule to favour family transactions accords with that aim.
364. By virtue of Regulation 7, where a producer (or his legal personal representative) can obtain a certificate from the Minister, inter alia, that he has produced milk on the holding for a period of three years prior to the milk quota year in which the transfer is proposed, he may continue to transfer land with quota. This patently favours the active milk producer and accords with the objective of Article 8a and the sixth recital. This provision also demonstrates that removal of the land/milk-quota link is by no means as draconian as has been suggested. It remains open to each of the applicants, as they acknowledge, to resume production of milk on their own land and by this means and to regain the right to sell their land with milk quota.
365. Regulation 9 permits the purchase of land by a lessee of land and quota to be made with or without milk quota on the expiry or earlier determination of a lease. The lessee must, himself be a producer. This also favours the active milk producer.
366. Regulation 10 permits the renewal of an existing lease on its expiry, in which case the milk quota is transferred to the lessee for the term of the renewal. This provision cannot be the subject of complaint. Apart form favouring milk production, it represents the sort of fine regulatory choice which fits easily within the scope of action which can be taken without infringing Article 15.2.1 of the Constitution.
367. For these reasons, I do not think that the 2000 Regulations infringe Article 15.2.1 of the Constitution, in respect of the changes regarding the transfer of land with milk quota.
368. I should explain the purpose of the detailed consideration I have given to the Community provisions. It has never been contested that the 2000 Regulations were, in Community law terms, within the scope of the discretion available to the State. Therefore, I am not considering an issue of Community law. If I were, the court might be obliged to refer to the Court of Justice. I am judging, rather, whether the scope of the discretion conferred by Community law in regulations which become part of national law was so independent of principles and policies laid down by those Community regulations, as to place the State in conflict with Article 15.2.1 of the Constitution.
369. At this point, it is also necessary to consider the Communit y rules regarding temporary transfer of milk quotas. They, to some extent, also involve separation of land and milk quota. Temporary transfers were first authorised by Council Regulation (EEC) No 2998/87 of 5 October 1987 amending Council Regulation 804/68 … This recites that “experience has shown that certain producers do not intend, over a 12-month period, using up all their individual reference quantities [and that] … Member States should be authorised to place at the disposal of other producers for the 12-month period in question, the quantities which are not going to be used by other producers who are entitled thereto;” On this premise, Article 1 inserted a new Article 1a in Regulation 804/68 as follows:
“1a. Member States may authorise, at the beginning of each 12-month period and for the duration thereof temporary transfers of that part of the individual reference quantity which the producer who is entitled thereto does not intend to use .
Member State s may limit the transfer operations to certain categories of producers and on the basis of the milk production structure in the regions or collecting areas concerned.”
Regulation 3950/92 recited that “ ….the temporary transfer of parts of individual reference quantities in Member State s which authorised this ha [d] proven to be an improvement to the scheme [and that] this facility should therefore be extended to all producers [though its] implementation ……….. should not stand in the way of further structural change and adjustment , nor fail to take account of the resulting administrative difficulties;”
370. Consequently, Article 6 of Regulation 3950/92 renewed the power to permit temporary transfer, transforming it, however, into an obligation, and adding that Member States might “determine to what extent transfer operations may be renewed.” Furthermore, Article 6(2) provided:
“Any Member State may decide not to implement paragraph 1 on the basis of one or both of the following criteria:
– the need to facilitate structural developments and adjustments,
– overriding administrative needs.”
The temporary transfer provisions were implemented in the State by Regulation 16 of the 1995 S.I. This delegated to the Minister the power to determine the categories of producers who might benefit and, more relevant to the present case, “the extent to which temporary transfers ……… [might] be renewed.” The public were to be informed by notices in a National newspaper.
371. Regulation 1256/99 made no significant change in the temporary transfer rules. It did, however, restate Article 6(1) of Regulation 3950/92 as follows:
“Before a date that they shall determine and by 31 March at the latest, Member States shall authorise, for the 12-month period concerned, temporary transfers of individual reference quantities which producers who are entitled thereto do not intend to use.”
372. Important restrictions are imposed, by Regulation 27 of the 2000 Regulations, on the system of temporary transfers as it has hitherto operated in the State.
373. Paragraphs (1) and (2) ostensibly preserve the right of a milk quota holder to make a temporary transfer of “such part of his or her milk quota as he or she does not intend to use during that milk quota year.” Paragraph (3), however, denies this right where the holder has “neither made milk deliveries to a purchaser, or sold milk or milk products directly for consumption, during any three successive milk quota years since 1 April 1997 and who made a temporary transfer of his quota under Regulation 16 of the Regulations of 1995 or under paragraph (2) during each of the 3 milk quota years in question..”
374. Paragraph (4), on the other hand permits a person who, likewise, has “neither made milk deliveries to a purchaser, or sold milk or milk products directly for consumption,” but has leased the land and milk quota for the same period to make a temporary transfer but for one year only.
375. Paragraph (5) enables the Minister, on application, to approve a temporary transfer for one further milk quota year only by a person affected by paragraph (3) or (4), where exceptional circumstances have caused the failure to deliver milk.
376. The respondents have made it clear that the State has not exercised the option granted by Article 6(2) of Regulation 3950/92 not to implement Article 6(1). Consequently, it is said, the State was obliged by Article 6(1) to “authorise … temporary transfers of individual reference quantities which producers who are entitled thereto do not intend to use.” However, it is further argued that the applicants do not come within the definition of producer. That term is defined in Article 9 of Regulation 3950/92 as a “natural or legal person …… farming a holding within the geographical territory of the Community :
– selling milk or milk products directly to the consumer,
– and/or supplying the purchaser.”
377. The respondents rely on the decision of the Court of Justice in Case C-152/95 Macon v Préfet de lAisne [1997] ECR I-5429. That case dealt with the identical definition in Article 12(c) of Regulation 857/84, where farmers, who had ceased milk production, (no explanation for this cessation appears in the report) sought compensation under a Community scheme for producers undertaking to discontinue production definitively. The Court of Justice held that the “term had not been given an independent meaning for the purposes of the rules on discontinuation of milk production.” (Paragraph 21). It held (paragraph 23):
“Only farmers actually selling milk or other milk products can … be considered to be producers. By contrast farmers who have spontaneously ceased milk production are no longer producers for the purposes of Article 12(c) of Regulation 857/84.”
378. The Court, in that judgment recalled its judgment in Case C-341 Ballmann [1991] ECR I-25, where it had said: “the status of producer is accorded to any person who manages a holding, that is to say a set of production units … and sells or delivers milk or milk products.”
379. Since consideration of this issue involves the interpretation of a provision of a Community regulation, the issue of the obligation of this Court to refer questions to the Court of Justice can arise. For the moment, I will say only that, in my view, the meaning of the term “producer” is quite clear. None of the applicants come within that definition. Therefore, they cannot rely on Article 6(1) of Regulation 3950/92 to claim the right to continue to make temporary transfers of their milk quotas. Accordingly, the Minister, in denying them that right by the terms of Regulation 27 was not making a choice between different options conferred by Regulation 3950/92. He was not entitled in Community law to grant the right to make temporary transfers to persons who were not producers. That is, of course, a conclusion of Community law which might have to be referred for preliminary ruling.
380. However, this Court, as a “court …. against whose decisions there is no judicial remedy under national law” is not obliged by Article 234EC to refer a question of interpretation to the Court of Justice, unless “a decision on that question is necessary to enable it to give judgment.” That is the situation which pertains in the present case, as I will explain.
381. As has been seen, Article 6 of Regulation 3950/92 authorises Member States to “determine to what extent transfer operations may be renewed.” The State was, on any view, entitled to determine that the right to make temporary transfers should be permitted for one further year only, unless exceptional circumstances were demonstrated. In making this decision, the Minister acting on behalf of the State was exercising a discretion conferred by Community regulations and for one of the policy reasons clearly stated by Community law. This is supported by the fourth recital in the preamble to Regulation 1256/99. It expresses the view that Member States “should have the possibility to decide in accordance with the general principles of Community law that, in cases of substantial under use [of milk quota ] over a significant period of time, the under used reference quantities will revert to the national reserve with a view to their reallocation to other producers;”
382. In my view, the Minister was entitled to decide, in the light of the general policy of favouring active producers that persons entitled to milk quotas, not in active production, but having used the facility of temporary transfer for three years past should be entitled to renew such temporary transfer for one further year only. In so doing, he was acting in accordance with principles and policies set out in the Community regulations.
383. The result of the foregoing is that:
1. The changes made in the rules regarding the link of milk quota to land on transfer constitute an exercise of discretions so closely linked to principles and policies laid down in Community law as not to require legislation for the purposes of Article 15.2.1 of the Constitution.
2. Although the applicants ability to make temporary transfers of their milk quotas is severely restricted by the 2000 Regulations, they have no right under Community law, from which such a right exclusively derives, to make such transfers. Although this involves a question of Community law, it is not necessary for this Court to decide the case on that basis, since, in this case also, the State was pursuing principles and policies laid down in Community law.
Property Rights
384. It is only in respect of the first of these issues that the applicants are in a position to maintain that their property rights have been infringed. It has been established since at least as early as the judgment of the Court of Justice in Case 11/70 Internationale Handellsgesellaschaft [1970] ECR 1125, that fundamental rights and in particular rights to property are protected in the Community legal order. In Case 44/79 Hauer v Land Rheinland-Pfalz [1979] ECR 3727, that court explained that such protection was inspired by the common constitutional traditions of the Member States and the European Convention for the Protection of Human Rights and Fundamental Freedoms. The court drew attention specifically to the German and Italian Constitutions and to Article 43 of the Constitution of Ireland. However, it is equally clear from this judgment that “the question of a possible infringement of fundamental rights by a measure of the Community institutions can only be judged in the light of Community law itself.” (paragraph 14). The other named sources of fundamental-rights protection are integrated into the Community legal order. In Bostock, the Court of Justice said, citing its earlier decision to the same effect in Case C-44/89 Von Deetzen :
“The right to property safeguarded by the Community legal order does not include the right to dispose, for profit, of an advantage, such as the reference quantities allocated in the context of the common organisation of a market, which does not derive from the assets or occupational activity of the person concerned…”
385. In its judgment in Demand, the Court of Justice used the expression, “regardless of the legal nature to be attributed to an additional reference quantity,” when assessing and then rejecting a claim that Community provisions had infringed rights of property. As Murray J. explains in his judgment, when Member States exercise discretions conferred on them by Community law, as in this case, it is for Community law to decide whether they have infringed fundamental rights. The Court of Justice stated in Duff, at paragraph 29 that “the protection of fundamental rights in the Community legal order are also binding on the Member States when implementing Community rules.” (emphasis added). In that case, the Court of Justice considered both Community rules and the exercise of discretion at national level. It did not refer in its judgment to the point made by the Advocate General, in his Opinion, that national law might “in appropriate cases … ensure greater protection … than that afforded by the general principles applicable in the Community legal order.”
386. In my opinion, the applicants’ complaint that their fundamental rights, whether or not described as property rights, have been infringed by the 2000 Regulations is unsustainable as a matter clearly decided in the constant case-law of the Court of Justice. Specifically, I cannot accept that their said rights were infringed by the State in exercising the discretion conferred on it to cease to apply Article 7(1) of Regulation 3950/92 (as amended) as introduced by the insertion by Article 1(10) of Regulation 1256/99 of Article 8a(b). I agree with the judgments of Denham and Murray JJ. on the issue of protection of property rights in milk quotas in Community law. I think that the position of the Court of Justice regarding claims based on infringements of property rights in milk quotas is clear beyond argument to the extent of being acte clair . On that basis – which was not seriously contested on behalf of the applicants – I do not think the Court is under an obligation to refer any question for preliminary ruling to the Court of Justice of the European Communities pursuant to Article 234EC.
387. In the present case the alleged infringements flow from the exercise of Member States’ discretion within the framework and in pursuit of Community policies. In my view, the principle enunciated in Hauer applies to such a situation. It is not a case of the exercise of an autonomous power to impose restrictions permitted by Community law but in furtherance of national policies. If this was such a case, of course, Article 15.2.1 of the Constitution would apply and it would also follow that any law so enacted would be amenable to scrutiny by reference to other articles of the Constitution, specifically Article 43.
388. It need not follow that in every case an exercise of a power delegated by Community law which is valid in the sense of being within principles and policies laid down by the latter will survive scrutiny vis à vis other articles of the Constitution. It is difficult to envisage circumstances in which the exercise of a discretion would violate a provision of the Constitution protecting, for example, property rights without at the same time involving the invasion of the exclusive legislative role of the Oireachtas, but in principle that must be possible. I agree with Murray J. in his treatment of the issue of property rights.
389. In any event, in the circumstances, I would dismiss this appeal.
Brady v Haughton
, unreported, High Court, Ó Caoimh J., July 22, 2003
Judgment of Mr. Justice Aindrias Ó Caoimh delivered 22nd July, 2003.
This is an application for an order quashing the order of the first respondent of the 25th March, 2002 sitting at the District Court No. 50 in purported compliance with the terms of s.51 of the Criminal Justice Act, 1994 concerning certain items of clothing, the property of the applicant, and ancillary relief. The matter comes before this Court pursuant to an order of this Court (White J.) made the 2nd December 2002 whereby the applicant was given leave to seek the following relief:
1. Leave to seek judicial review by way of certiorari quashing the order of the first named respondent herein made on the 25th March, 2002 sitting at District Court No. 50 in purported compliance with the terms of s.51 of the Criminal Justice Act 1994 concerning certain items of clothing the sole property of the applicant herein, photographs, fingerprints and confidential medical records, of the applicant.
2. An order by way of interim relief restraining the second named and third named respondents their servants and agents from dealing in any way with the said property, photographs, fingerprints and confidential medical records of the applicant now in the possession of both or either of them that might result in the said property being removed from or made [] unamenable to the jurisdiction of the District Court pending further order of this Court.
3. Leave to seek by way of further interim relief an order directing the second named and third named respondents their servants and agents to refrain from interference with and to retain safely and in their care and custody and without any interference whatsoever the said photographs, fingerprints and confidential medical records of the applicant, clothing, the property of the applicant and the subject matter of the said order of the first named respondent herein made the 25th March, 2002.
4. An order providing for the costs of these proceedings.
5. Judicial review by way of a declaration that s.51 of the Criminal Justice Act 1994 is repugnant to the Constitution.
6. Judicial review by way of a declaration that the order of the first named respondent herein made on the 25th March, 2002 sitting at District Court No. 50 in purported compliance with the terms of s.51 of the Criminal Justice Act 1994 failed to respect personal rights of the Applicant guaranteed by Article 40 of this Constitution.
7. Judicial review by way of declaration that proceedings before the District Court pursuant to s.51 of the Criminal Justice Act are judicial proceedings and accordingly subject to the constitutional imperatives and safeguards which inhere thereby.
8. Judicial review by way of a declaration that the seeking and procuring of the said order in the circumstances that obtained by the second and third named respondents, in so far as they acted in concert, failed to respect the constitutional rights of the applicant.
9. Judicial review by way of an order prohibiting further conduct of the said proceedings until further order of the Court.
10. Damages.
The grounds upon which this relief is sought are as follows:
1. The first named respondent’s order was made in the absence of the applicant and without any or any due notice to him or his legal advisers.
2. The said order was made in respect of items of clothing which the respondents each well knew were the subject of a Police Property [] application pursuant to the Police Property Act, 1897 to be made to the District Court on the 26th March, 2002, due notice of the said application having been given by the applicant to the second named respondent and the relevant District Court Clerk on or about the 5th March, 2002.
3. The first named respondent’s order was made in the absence of the applicant, the requirement of fair procedures and in particular the absence of any due notice to the applicant or his legal representatives.
4. In the circumstances the order made was a deliberate and conscious violation of the applicant’s constitutional rights to fair procedures and constitutional rights in relation to private property and to fair procedures.
5. The first named respondent did not act in a judicial manner, although purporting to do so, in permitting the application to proceed in the absence of notice to the applicant.
6. The said order was sought by or on behalf of the second or third named respondents or either of them when both of them or one of them had previously been put on express notice that the applicant was in the course of applying to the District Court for a remedy provided to him by statute in relation to the said clothing and when both of them or one of them were aware that the grant of the said order would inhibit the applicant and frustrate him in his approach to the District Court the said respondent failed to respect the constitutional rights of the applicant and was a perversion of the course of justice.
7. The proceedings and subsequent order of the first named respondent herein made on the 25th March, 2002 sitting at District Court No.50 pursuant to s.51 of the Criminal Justice Act 1994 are breaches of the rules of natural and constitutional justice and the principles of Audi alterem partem and Nemo tenetur se ipsum accusatare.
8. The proceedings and subsequent order of the first named respondent herein made on the 25th March, 2002 sitting at District Court No. 50 pursuant to s. 51 of the Criminal Justice Act 1994 are breaches of the applicant’s right to private property, to privacy, to bodily integrity, to trial in due course of law, the right to prior notice and legal advice and representation in relation to judicial proceedings, to his liberty and to justice and fair procedures. []
9. In so far as the said s.51 provides a means to alienate in whole or in part to other States the conduct or control of security and home affairs, namely the maintenance and promotion of criminal justice, it is inconsistent the Constitution.
10. In all the circumstances, the said investigation is in breach of the applicant’s constitutional rights.
The applicant complains that the order of the first respondent was made in his absence and without any notice to him or his legal advisors. The applicant also complains that the order was made in circumstances where he had pending in the District Court a Police Property Act application due to be made on the following date, the 26th March, 2002 in circumstances where it is stated that notice of this application was given to the second respondent and the District Court on or about the 5th March, 2002.
In these circumstances it is pleaded that the impugned order was made in deliberate and conscious violation of the applicant’s constitutional rights to fair procedures and contrary to his rights to private property and to fair procedures. It is complained that the second respondent did not act in a judicial manner, although purporting to do so, in permitting the application to proceed in the absence of notice to the applicant.
The application is grounded upon an affidavit of the applicant’s solicitor who deposes to the fact that the applicant is currently serving a prison sentence at Mountjoy Prison. It is stated that certain items of the plaintiff’s clothing were seized and retained at Ballymun Garda Station when he was detained there in the month of December, 2001, apparently in the context of a criminal investigation within the State. It is stated by the applicant’s solicitor that he is instructed that the applicant had been in England prior to that date and returned voluntarily to Ireland in December, 2001.
The case is made that on the 25th January, 2002 the applicant was asked whether he agreed to give items of his clothing and other samples of forensic material, including a DNA sample, fingerprints, and a blood sample together with permission for photographs to be taken and he was asked whether he wished to speak to members of the West Midlands Police Force. It appears that the applicant pleaded guilty in the District Court and was remanded in custody to the 15th April, 2002 for sentence and that at that time he indicated his intention to make a Police Property Application in [] relation to his clothing. He apparently completed an application form on the 28th January, 2002 and it appears that a written notice of application was served on the Gardaí at Ballymun on or about the 5th March, 2002. This was served on the District Court Clerk on the following day and was listed for hearing on the 26th March, 2002.
It appears that the applicant’s sister and brother in law were summoned to appear at District Court 50 on the 25th March, 2002 to answer questions concerning the applicant.
It appears on that day that an application was made before the first respondent under s. 51 of the Criminal Justice Act, 1994. The applicant contends that an order was made at that time by the first respondent.
The applicant’s solicitor has exhibited the witness summons served on Anthony McDonagh showing that the investigation in question being carried out by officers of the West Midlands Police is in respect of the offence of murder, causing grievous bodily harm and burglary suspected of having been committed by the applicant. This summons is entitled ‘The District Court’ and in the matter of the Criminal Justice Act, 1994 Part VII and s.51 thereof and indicates that the respondent Minister has nominated a judge of the District Court to receive evidence to which a request made by the Crown Prosecution Service, West Midlands, Birmingham.
The applicant’s solicitor has sworn a supplemental affidavit in which he indicates that on the 11th April, 2002 on the adjourned date of the applicant’s Police Property Application the President of the District Court was informed that a Mutual Assistance Order which was an oral order had been made and which had not been reduced to writing. In light of this the President directed that pending further order the clothing in question was to remain with the Gardaí.
A Statement of Grounds of Opposition has been filed on behalf of the second and third respondents in which the following grounds are advanced:
1. Part VII of the Criminal Justice Act, 1994 implements into national law the principles of international mutual assistance in criminal matters.
2. S. 51 of the Criminal Justice Act, 1994 incorporates into national law procedure for receipt of evidence in respect of either criminal investigation or a criminal prosecution being carried on outside the State. Section 51 of the Criminal Justice Act, 1994 permits the Minister, subject to the conditions set out in s.51 sub-paras. 1(a) and (b) subject to being satisfied to the matters set [] out at s.51 sub-paras 2(a) and (b) to nominate a judge of the District Court to receive evidence to which the letter of request received from a foreign state relates as may appear to the judge of the District Court to be appropriate for the purpose of giving effect to the request.
3. The second schedule to the Act of 1994 sets out in some greater detail powers of the District Judge nominated to hear such evidence to which the request relates, the protection of witnesses and the transmission of evidence.
4. The receipt of evidence by a Judge of the District Court pursuant to s.51 of the Criminal Justice Act, 1994 does not constitute the administration of justice and is an administrative act.
5. The second and third named respondents deny that the applicant was entitled to notice of the application made pursuant to s.51 of the Criminal Justice Act, 1994 in the above matter on the 25th March, 2002.
6. The second and third named respondents deny that the order of the first named respondent was made and delivered in conscious violation of the applicant’s constitutional rights to fair procedures and constitutional rights relating to private property and fair procedures.
7. The second and third named respondents deny that the first named respondent failed to act in a judicial manner.
8. The second and third named respondents assert that the decision to proceed with the application pursuant to s.51 of the Criminal Justice Act, 1994 on the 25th March, 2002 was made in accordance with the principles of international comity and in pursuance with their obligations thereto.
9. In making the order for the transfer of articles of clothing of the applicant herein, the first named respondent took into account both the provisions of s. 51 of the Criminal Justice Act, 1994 and the Police Property Act, 1897.
[]
10. The second and third respondents deny that the application made to the first respondent frustrated and or inhibited the applicant’s application pursuant to the Police Property Act, 1897.
11. The second and third respondents deny that the application made by the third respondent to the first respondent pursuant to s.51 of the Criminal Justice Act, 1994 constituted an obstruction or perversion of the course of justice.
12. The second and third respondents assert that the application made by the third respondent to the first respondent pursuant to s.51 of the Criminal Justice Act, 1994 was made pursuant to a properly constituted Request for Mutual Assistance made by the appropriate United Kingdom authority and the said application was carried out in accordance with the provisions of Part VII of the Criminal Justice Act, 1994.
An affidavit sworn by James Clerkin, a civil servant in the Department of Justice, Equality and Law Reform, has been filed on behalf of the second and third respondents. Mr. Clerkin refers to the fact that the Department is the central authority for the receipt of requests in respect of International & Mutual Assistance in criminal matters. He indicates that on or about the 24th December, 2001, he received a letter of request dated the 21st December, 2001 for assistance from the Crown Prosecution Service, West Midlands, Birmingham in the United Kingdom, which he exhibits. He indicates that this request was forwarded to the respondent Minister by the National Crime Intelligence Service, Interpol. He indicates that the Minister sought the advices of the offices of the Attorney General and the Chief State Solicitor in respect of the request which were given on the 31st December, 2001. He says that as of the 2nd January, 2002 the following had occurred:
(a) The Minister had received from the Crown Prosecution Service an authority which appeared to him to have the function of making requests for mutual assistance in criminal matters a request for assistance in obtaining evidence in the State in connection with a criminal investigation that was being carried out in the United Kingdom, and []
(b) The Minister was satisfied that there existed reasonable grounds for suspecting that an offence(s) under the law of the United Kingdom had been committed and an investigation into that offence(s) was being carried out in the United Kingdom.
Mr. Clerkin indicates that in or around early February, 2002 the Minister formed the view that items 3, 4, 6, 8 and 9 in the request could be proceeded with by way of application pursuant to s. 51 of the Criminal Justice Act, 1994 (‘the Act of 1994’) and he so informed the Judicial Co-operation United of the United Kingdom Central Authority in Criminal Matters. He indicates that on the 21st February, 2002 the Crown Prosecution Service expanded upon its earlier request of the 21st December, 2001. He sought further clarification from the Crown Prosecution Service and indicated on or about the 26th February, 2002 that the application pursuant to s. 51 of the Act of 1994 was anticipated to go ahead on the 25th March, 2002. He indicates that between the 15th and 25th February, 2002 he obtained a date for the hearing of the s.51 application for the 25th March, 2002. He indicates that the first respondent was nominated by the Minister to hear the evidence requested by the United Kingdom authorities on the 14th March, 2002.
Mr. Clerkin indicates that Part VII of the Act of 1994 provides for co-operation between different states in the investigation and prosecution of serious crime. He indicates his belief that it incorporates into Irish law the provisions of the European Convention on Mutual Assistance in Criminal Matters done at Strasbourg in 1959 together with two further international conventions providing for mutual assistance.
He indicates his understanding that Ireland is bound by international convention to execute such requests for assistance to the fullest extent possible. He indicates that both Ireland and the United Kingdom included in their legislation incorporating international mutual assistance provisions that articles gathered in such request can only be used for the purposes specified unless the Minister consents otherwise and that the items gathered would be returned when they are no longer required for the purposes of the request. He says that he became aware of the applicant’s application pursuant to the Police Property Act, 1897 on the 19th March, 2002. []
Mr. Clerkin makes reference to the transcript of the hearing before the second respondent and indicates by reference to same that at the time of the s. 51 application the Garda Commissioner had been furnished with a copy of the request from the United Kingdom authorities and the fact of the Police Property Act application to be made on the 26th March, 2002 was brought specifically to the attention of Judge Haughton.
By order of the 2nd December, 2002 the applicant was given liberty to amend his statement grounding his application herein.
Submissions:
On behalf of the applicant it is submitted by Mr. Maurice Gaffney S.C. that the matters addressed by the respondent fall within the concept of the administration of justice and concern more than a mere administrative procedure. It is submitted that the procedures in any event attract the requirements of natural and constitutional justice, involving as they do the concept of fair procedures.
It is submitted that insofar as the application in question to the respondent was made in the absence of notice to the applicant and as the decision of the respondent had a profound effect on important interests and rights of the applicant, it was in breach of the fair procedures required.
It is further submitted that as the procedure adopted under s.51 operated to frustrate the applicant’s application under the Police Property Act, 1897 it amounted to an abuse of process. Further it is submitted that the proceedings were in violation of the applicant’s rights to private property, bodily integrity, trial in due course of law and notice of the right to obtain legal representation.
Counsel queries why the application under s.51 should pre-empt the application under the Police Property Act.
Counsel also takes issue with the categorisation of the instant proceedings as administrative. In this regard counsel refers to the judgment of Kenny J. in McDonald v. Bord na gCon [1965] I.R. 217 at p. 230 where the learned trial judge stated:
“It seems to me that the administration of justice has these characteristic features:
1, a dispute or controversy as to the existence of legal rights or a violation of the law; [0]
2, The determination or ascertainment of the rights of parties or the imposition of liabilities or the infliction of a penalty;
3, The final determination (subject to appeal) of legal rights or liabilities or the imposition of penalties;
4, The enforcement of those rights or liabilities or the imposition of a penalty by the Court or by the executive power of the State which is called in by the Court to enforce its judgment;
5, The making of an order by the Court which as a matter of history is an order characteristic of Courts in this country.”
With regard to the provisions of s.51 of the Act of 1994, counsel points out that there is no obligation that there be correspondence of offences under Irish law and that of the requesting state. It is submitted that an examination of the Act shows that there is no provision of a sanction for failure to comply with the Act and there is no provision for the matter being dealt with if in contempt of court.
In regard to whether the proceedings are to be considered as judicial as opposed to administrative proceedings, counsel refers to the fact that they are before a judge of the District Court in a courtroom of the District Court in the presence of a clerk of the District Court. It is submitted that a witness may be threatened if he or she refuses to comply with a request to give evidence. It is thus submitted that the proceedings have all the hallmarks of judicial proceedings.
With regard to the procedures followed, counsel refers to the terms of the request from the English authorities which conclude with a statement that the applicant may only be invited to co-operate in the procedures set out and that he should be given an opportunity of seeking legal advice from a lawyer of his choice who can advise him of the position in both English and Irish criminal jurisdictions insofar as they are applicable.
Counsel refers to the case of Salinas de Gortari v. Smithwick (No.2)[2000] 2 IR 553 where at p. 566 McGuinness J. stated, inter alia, as follows:
“As I have already said, I have no doubt that the intention of the Oireachtas was that a witness appearing before the nominated judge of the District Court under this statutory scheme should be compelled to answer the questions put to him save in the exceptional circumstances set out in para. 3. However, no explicit provision has been made either to create an offence or to provide a [1] penalty in the event of failure to answer. Counsel for the notice party argues that these lacunae may be overcome through the purposive interpretation of the statute. This court has previously accepted the principle of purposive interpretation, see for example Quinlivan v. Governor of Portlaoise Prison [1998] 2 IR 113 and Mullins v. Harnett [1998] 4 IR 426, but the principle that any statute which imposes or may impose penal sanctions must be strictly interpreted is also well established. This latter principle must always have high priority in the interpretation of any statute.
Pararaph 1 of the second schedule provides that the judge shall have the like powers for securing the attendance of a witness as the District Court has for the purpose of any other proceedings before that court. This may be equated with the first subs. set out in s.13 of the Petty Sessions (Ireland) Act, 1851. It is notable however, that in that section separate and distinct provision is made under subs. 5 for the situation where a witness actually present in court refuses to answer a question. That situation is not covered by the general provision on compelling the attendance of a witness. Section 13(1) deals with compelling attendance; subs. 5 deals with compelling a witness to answer. It seems to me, therefore, that in the statutory scheme set out in s.51 of the Act of 1994, para. 1 of the second schedule cannot of itself be held to import a serious criminal offence and a concomitant penal sanction where no specific provision is made for either such offence or such sanction in the Act itself or in the schedule.”
Counsel stresses that under the terms of the Act of 1994 there is no need for correspondence of offences and the Minister is at large in relation to acceding to a request as the words of the Act “if he thinks fit” give a complete discretion to the Minister. It is submitted that an essential requirement is that where depositions are to be taken, that the accused be present. It is submitted that if the European Convention on Mutual Assistance in Criminal Matters done at Strasbourg 20th April, 1959 (hereinafter referred to as ‘the Convention’) were made part of the domestic law that provision might be made in respect of the suspect. Counsel submits that the law should provide for notice and an opportunity for the suspect to be in court and points out that while the Act is silent, it does not preclude the suspect being given notice. [2]
Counsel indicates that the application is to deal with the applicant’s property without notice to him. Counsel submits that there is a perception of compellability in the procedures.
It is submitted that the Act of 1994 is contrary to the Constitution as there is no restraint on the exercise of the powers under the Act and there is no mutuality required and no opportunity for the applicant to object to the procedures being followed.
While counsel contends that the powers are judicial in nature, it is submitted that even if they are to be held to be administrative in nature that they are nevertheless flawed.
In light of the entitlement of a suspect who is detained to have the right of access to a lawyer as recognised in The People (Director of Public Prosecutions) v. Healy [1990] 2 I.R. 73, it is submitted that a suspect in the position of the applicant should have the right to have access to a lawyer. In this regard counsel refers to a purported certified copy order in the matter dated the 16th May, 2002.
It is submitted that the unconstitutionality arises on a closer examination of the section at issue. It is submitted that at first it might appear that the application under s. 51 may ostensibly take place in accordance with law. It is submitted that if a power is given without any restraint it is entitled to be exercised as such. It is submitted that where the Act is silent it is defective. It is submitted that the evidence sought may be used in a third state in circumstances where the rights of the suspect might be infringed.
Counsel submits that a number of the protections to be found in s. 55 (3) and s. 55 (10) are not present in the context of an application made under s. 51.
On behalf of the Minister and the Attorney General it is submitted that the applicant’s case has proceeded on the basis of a fundamental misconception as to the procedure under the Act of 1994. It is submitted that the procedures under s.51 are sui generis to enable the State to comply with its international obligations. Counsel submits that Part VII of the Act of 1994 provides for procedures in this jurisdiction to permit the State to implement its obligations pursuant to the Convention and the additional protocol on Mutual Assistance in Criminal Matters done at Strasbourg in 1978.
Counsel indicates that pursuant to the scheme of mutual assistance and s.51 of the Act of 1994, a request is made by a foreign authority to the respondent Minister to [3] seek assistance and/or evidence in Ireland in connection either with criminal proceedings which have been instituted or a criminal investigation being carried out in the requesting state. It is submitted that once the Minister has satisfied himself in this regard he has a discretion pursuant to s.51 to nominate a judge of the District Court to receive such evidence to which the request relates.
It is submitted that the Minister must be satisfied that evidence transferred will only be used for the purpose specified in the request and that when evidence is no longer required it will be returned to this jurisdiction.
It is submitted that the intention of the Convention is indicated at Article 1 of the Convention whereby the contracting parties undertook to afford to each other “the widest measure of mutual assistance in proceedings in respect of offences, the punishment of which, at the time of request for assistance falls within the jurisdiction of the judicial authorities of the requesting party.”
Counsel refers to Salinas de Gortari v. Smithwick (No.2) [2000] 2 IR 553 in support of his submission that the application under s. 51 is not a trial and is not the administration of justice. As held by McGuinness J. in that case, the procedure under s. 51 is sui generis. It is neither a trial nor a police investigation procedure prior to charge under the Criminal Justice Act, 1984 nor is it the taking of depositions under the Criminal Procedure Act, 1967. The procedure is one governed by statute and must be considered within the bounds of the statute.
It is submitted that as a criminal investigation has taken place and as the requesting state seeks evidence for the purpose of that investigation, the Act of 1994 does not provide that a person in the position of the applicant has a right to notice of the hearing of such evidence and the transmission of such evidence. It is accepted that if the requesting authority were to seek viva voce evidence from the applicant himself he would not be compellable.
Counsel refers to the evidence of Detective Garda Kevin Daly to the effect that the applicant consented to hand over his clothing and mobile phone at a time when he was at Ballymun Garda Station on the 19th December, 2001. It is submitted that the affidavit of the applicant’s solicitor Patrick Daly indicates that the applicant was not prepared to co-operate fully and refused to speak to members of the West Midlands Police Force.
With regard to the Police Property Act application it is submitted that the same is not the administration of justice but provides a protection to dispose of property. It [4] is submitted that there is a fundamental misconception inherent in the attempt on behalf of the applicant to rely upon the provisions of the Police Property Act, 1897 as it is in no way designed to provide that a judge of the District Court is to determine rights and liabilities on the basis of an application pursuant to s.1. That provision provides inter alia:
(1) “Where any property has come into the possession of the police in connexion [with their investigation of a suspected offence] . . . , a court of summary jurisdiction may, on application, either by an officer of police or by a claimant of the property, make an order for the delivery of the property to the person appearing to the magistrate or court to be the owner thereof, or, if the owner cannot be ascertained, make such order with respect to the property as to the magistrate or court may seem meet.
(2) An order under this section shall not affect the right of any person to take within six months from the date of the order legal proceedings against any person in possession of property delivered by virtue of the order for the recovery of the property, but on the expiration of those six months the right shall cease.”
It is submitted that from a reading of the section it is evident that the purpose of the section is to facilitate the disposal of property which the Garda Síochána does not require or need and in relation to which there is either a dispute as to the ownership or in relation to which no owner has come forward. It is submitted that any order made by a judge of the District Court pursuant to s.1 is not determinative of ownership since it is only pursuant to civil proceedings taken within six months from the date of any such order that such issue has to be determined. It is submitted that an application under the Act cannot permit a judge to cause property to be removed from the possession of the Gardaí if they require same for the purposes of criminal investigation. [5]
It is submitted that as it has not been disputed that the items at issue in these proceedings were in the possession of the Gardaí for the purpose of the criminal investigation and which they did not object to being placed in the possession of the West Midlands Police Force in pursuance of the State’s obligations under the Convention.
It is submitted that if the application under the Police Property Act had come on for hearing prior to the 25th March, 2002 the judge before whom the application came would have been bound to have adjourned the matter unless and until it was confirmed by the Gardaí that they no longer had an interest in retaining the items for the purposes of fulfilling their duties, including those of International Mutual Assistance.
Dealing with the procedure under s.51, it is submitted that the applicant has misconceived same insofar as it is contended that the same constitutes the administration of justice. Counsel refers to the judgment of McGuinness J. in Salinas de Gortari v. Smithwick (No.2) [2000] 2 IR 553 where at p. 562 of the report she stated, inter alia, under the heading ‘Law and conclusions’ as follows:
“Firstly, it is necessary to keep in mind that the proceedings before the respondent in the District Court under s. 51 of the Act of 1994 were not a trial and were not the administration of justice. Secondly, the applicant is not an accused person, either in this jurisdiction or in France.
The procedure in question is indeed, as submitted by counsel for the notice party, sui generis. It is not, I think, valid to compare it either with an actual trial or with the police investigative procedure prior to charge under the Criminal Justice Act, 1984, or indeed with the taking of depositions in the District Court prior to sending an accused person forward for trial on indictment. The s.51 procedure is a procedure governed by statute and must be considered within the bounds of that statute. The rights of the applicant are the rights of a witness, not of an accused, and his position cannot be compared to that of an accused person at a trial who is under no compulsion to give evidence at all. His position is much closer to that of the defendant in the case of Keegan v. De Burca [1973] I.R. 223, which was opened to me by counsel in the course of argument, but even that case deals with the common law applied in the context of the High Court, whereas in the instant case the question is of a specific statutory procedure in the context of the District Court.” [6]
Counsel lays stress on the words ” a judge of the District Court” appearing in s. 51 as it is submitted that the application is not in fact made to the District Court but to a persona designate who is a designated judge of the District Court. It is submitted that despite the appearances the application in question was not made to the District Court.
Counsel further relies upon the judgment of Denham J. in Salinas de Gortari v. Smithwick [1999] 4 IR 223 where at p. 227 she stated:
“The hearing before Judge Smithwick is a gathering of evidence for a juge d’instruction in France. It is not the administration of justice nor is it any part of any criminal trial in Ireland. It is not the administration of justice in Ireland.”
Counsel refers to the evidence whereby the fact of the forthcoming Police Property Act application was on the date of the application before Judge Haughton made known to him and in circumstances where he was disposed to act under s. 51 on the basis that the items sought were reasonably required for the investigation in the United Kingdom.
With regard to the property in question, counsel refers to the judgment of Palles C.B. in Dillon v. O’Brien and Davies (1887) 20 L.R.Ir. 300 where he stated:
“But in the interest of the State in the person charged being brought to trial in due course necessarily extends as well to the preservation of material evidence of his guilt or innocence as to his custody for the purpose of trial.”
Counsel refers to the judgment of Lynch J. in Murphy v. Director of Public Prosecutions [1989] I.L.R.M. 71 where it was indicated that the ‘interest of the State’ amounts also to the duty to preserve ‘material’ evidence.
Counsel further refers to the judgment of O’Keeffe J. in the Supreme Court decision in Jennings v. Quinn [1968] I.R. 305 where he stated at pp. 310-311, inter alia, as follows:
“The question as to the extent to which property, coming into the hands of the police at the time of a lawful arrest, may be sent out of the jurisdiction of this Court and into another jurisdiction appears not to have arisen for consideration either in this country or in England in any case to which reference was made, and [7] accordingly it becomes necessary to determine the matter as one arising now for the first time. It appears to me that the public interest also requires that property, which the police might lawfully retain for use as material evidence in a charge against a person arrested if that charge were brought against him within the jurisdiction, may also be retained lawfully by them for the purpose of sending it, and that they may send it, into another jurisdiction where a charge on which that property is material evidence has been laid against the person arrested, at least in cases where the lawful arrest of the person within the jurisdiction was made in aid of the jurisdiction of the country in which the charge is laid. For this reason I would be prepared to hold that the defendants might lawfully retain in their possession any of the property which has come into their possession at the time of, or shortly after, the arrest of the plaintiff and which is required as material evidence on a charge laid against the plaintiff in the United Kingdom.”
Counsel concedes that the facts of the instant case are not the same as those in that case, but it is submitted that the Supreme Court accepted in that case in similar circumstances the legitimacy of the transfer of property of an individual to the authorities in the United Kingdom.
Later in the course of his judgment in Jennings v. Quinn, O’Keeffe J. stated:
“In my opinion this Court ought not to permit the property to be removed out of the jurisdiction of the Court, except at the instance of the plaintiff, until his claim to possession of it is determined or until it is established that the property is required as material evidence on a charge brought against the plaintiff, or some other person, in the United Kingdom.”
It is further submitted by counsel that in light of the enactment of the Act of 1994 subsequent to the decision in Jennings v. Quinn that the reasoning contained therein should properly be extended to the circumstances, such as the instant case where the police in the United Kingdom have established to the satisfaction of the Central Authority for Mutual Assistance that the substantial case against the applicant in respect of charges including murder is being prepared.
Counsel points out that as regards the material in question the authorities in the United Kingdom will require the consent of the Minister to use same in evidence. Accordingly, it is submitted that the concerns on behalf of the applicant [8] that the material could be used in evidence against him without further application are groundless.
Counsel submits that the respondent judge is a person nominated by the Minister. His determination was that the evidence was appropriate to give effect to the request.
With regard to the submissions of counsel for the applicant that fair procedures have to be grafted onto the procedures set forth in s.51, counsel submits that it is necessary to examine the procedures in question which are limited to determining whether it is appropriate that the material requested be provided.
Counsel refers to the fact that the applicant may be a putative accused who wishes to filter information being given to the investigating authorities in England.
Counsel refers to the fact that the judge of the District Court designated under the Act of 1994 has no power to compel a witness to answer questions put to the witness. It is submitted that even outside the terms of the Act of 1994 police in various states may co-operate and exchange information.
In reply, counsel for the applicant submits that the submissions advanced on behalf of the second and third respondents have failed to address the central point, namely whether the applicant is entitled to be heard. It is submitted that the clothing in question given by the applicant was given on the basis of an understanding that the same was wanted in connection with the investigation of crime in this jurisdiction. It is submitted that all the applicant required was a right to be heard in relation to his own property. It is submitted that his application to the District Court under the Police Property Act has been frustrated. It is submitted that the first respondent made an order rendering useless the application to be made the following day. It is submitted that as a matter of fact the property in question could have been transmitted before the application was made to the District Court.
While counsel for the respondents purports to rely upon the decision in McDonald v. Bord na gCon [1965] I.R. 217 it is submitted that not all the incidents of the administration of justice referred to by Kenny J. in that case are necessary before a matter may fall to be considered as the administration of justice.
With regard to the existence of a ‘dispute or controversy’, the only basis upon which there may have been no dispute before the respondent judge was that the applicant was not heard. With regard to ‘the determination or ascertainment of the rights of parties’, it is submitted that had the applicant been present he could [9] have asked that certain evidence not be used. With reference to ‘the final determination subject to appeal of legal rights and liabilities’ it is submitted there is no appeal provided for in the Act of 1994 and accordingly the determination was one of a final nature that the evidence in question be transmitted. With regard to the enforceability of the decision, the Minister is given the power to enforce same. With regard to whether an order was made, it is submitted that as a matter of fact an order was made in the matter which has the appearance of any order of the District Court. On this basis it is submitted that the proceedings in question have the characteristics of the administration of justice.
While McGuinness J. observed in Salinas de Gortari v. Smithwick (No.2)[2000] 2 IR 553 at p. 559:
“It is common case that the procedure under s. 51 of the Act of 1994, is not ‘the administration of justice’ as referred to in Article 34 of the Constitution.”
It is submitted that the conclusion at the end of p. 562 to the effect that the proceedings before the respondent under s. 51 were not the administration of justice must, in the circumstances be considered to be an obiter dictum.
Counsel submits that he accepts the decision in Jennings v. Quinn [1968] I.R. 305. Counsel observes that the owners of the property in question in that case came into court and were aware of what was happening. Counsel submits that consistent with that case the applicant in this case should he heard.
Counsel refers to the judgment of Walsh J. in East Donegal Co-Operative v. Attorney General [1970] I.R. 317 and in particular to portion thereof at p. 341 where he stated:
“In seeking to reach an interpretation or construction in accordance with the Constitution, a statutory provision which is clear and unambiguous cannot be given an opposite meaning. At the same time, however, the presumption of constitutionality carries with it not only the presumption that the constitutional interpretation or construction is the one intended by the Oireachtas but also that the Oireachtas intended that proceedings, procedures, discretions and adjudications which are permitted, provided for, or prescribed by an Act of the Oireachtas are to be conducted in accordance with the principles of constitutional justice. In such a case any departure from those principles would be restrained and corrected by the Courts.” [0]
It is submitted that this court, being bound by that decision, must conclude in favour of the applicant that he was entitled to be heard as the same is necessary in construing the legislation in accordance with the requirements of constitutional justice. On this basis it is submitted that the unrestricted discretion given to the Minister should be judged. It is submitted that the uncontrolled discretion is such as to render the Act in question to be invalid insofar as it is repugnant to the provisions of the Constitution.
Counsel submits that an examination of s. 52 of the Act of 1994 indicates what was possible in the context of providing for control of the power in question.
Counsel submits that evidence obtained can be used in another jurisdiction. It is submitted that the taking of evidence in this jurisdiction can result in the same being used in a trial in another jurisdiction.
With regard to the status of the first respondent, he is either acting as a judge of the District Court or he is not. If not, the evidence in question cannot be used at a trial in another jurisdiction. Counsel contrasts the protections afforded in s. 52 with the absence thereof in s. 51.
In conclusion counsel reiterates that if the proceedings under s. 51 are not the administration of justice they breached the applicant’s constitutional rights and furthermore it is submitted that the circumstances illustrate the deficiencies from a constitutional viewpoint of s. 51 and that the same should be condemned as being invalid having regard to the provisions of the constitution.
Conclusions:
Section 51 of the Act of 1994 provides, inter alia, as follows:
51.—(1) This section shall have effect where the Minister receives—
( a ) from a court or tribunal exercising criminal jurisdiction in a country or territory outside the State or a prosecuting authority in such a country or territory, or
( b ) from any other authority in such a country or territory which appears to him to have the function of making requests of the kind to which this section applies, [1]
a request for assistance in obtaining evidence in the State in connection with criminal proceedings that have been instituted, or a criminal investigation that is being carried on, in that country or territory.
(2) If the Minister is satisfied—
( a ) that an offence under the law of the country or territory in question has been committed or that there are reasonable grounds for suspecting that such an offence has been committed, and
( b ) that proceedings in respect of that offence have been instituted in that country or territory or that an investigation into that offence is being carried on there,
he may, if he thinks fit, by a notice in writing nominate a judge of the District Court to receive such of the evidence to which the request relates as may appear to the judge to be appropriate for the purpose of giving effect to the request.
(3) For the purpose of satisfying himself as to the matters mentioned in subsection (2) ( a ) and (b) of this section the Minister may regard as conclusive a certificate issued by such authority in the country or territory in question as appears to him to be appropriate.
(4) In this section “evidence” includes documents and other articles.
(5) The Minister shall not exercise the power conferred on him by subsection (2) of this section unless provision is made by the law of the country or territory or by arrangement with the appropriate authority thereof that any evidence that may be furnished in response to the request will not, without his consent, be used for any purpose other than that specified in the request.
(6) The Second Schedule to this Act shall have effect with respect to the proceedings before the nominated judge in pursuance of a notice under subsection (2) of this section.
…” [2]
The Second Schedule to the Act of 1994 reads as follows:
“SECOND SCHEDULE
Taking of Evidence for Use Outside the State
Securing attendance of witnesses
1. The judge shall have the like powers for securing the attendance of a witness for the purpose of the proceedings as the District Court has for the purpose of any other proceedings before that court.
Power to administer oaths
2. The judge may in the proceedings take evidence on oath and may administer an oath for that purpose.
Privilege of witnesses
3. (1) A person shall not be compelled to give in the proceedings any evidence which he could not be compelled to give—
( a ) in criminal proceedings in the State, or
( b ) subject to sub-para. (2) of this paragraph, in criminal proceedings in the country or territory from which the request for the evidence has come.
(2) Sub-para. (1) ( b ) of this paragraph shall not apply unless the claim of the person questioned to be exempt from giving the evidence is conceded by the court, tribunal or authority which made the request.
(3) Where such a claim made by any person is not conceded as aforesaid, he may (subject to the other provisions of this paragraph) be required to give the evidence to which the claim relates but the evidence shall not be transmitted to the court, tribunal or authority which requested it if a court in the country or territory in question, on the matter being referred to it, upholds the claim. [3]
(4) Without prejudice to sub-para. (1) of this paragraph, a person shall not be compelled under this Schedule to give any evidence if his doing so would be prejudicial to the security of the State; and a certificate signed by or on behalf of the Minister to the effect that it would be so prejudicial for that person to do so shall be admissible as evidence of that fact.
(5) Without prejudice to sub-para. (1) of this paragraph, a person shall not be compelled under this Schedule to give any evidence in his capacity as an officer or servant of the State.
(6) In this paragraph references to giving evidence include references to answering any question and to producing any document or other article and the reference in sub-para. (3) of this paragraph to the transmission of evidence given by a person shall be construed accordingly.
Transmission of evidence
4. (1) The evidence received by the judge shall be furnished to the Minister for transmission to the court, tribunal or authority that made the request.
(2) If in order to comply with the request it is necessary for the evidence to be accompanied by any certificate, affidavit or other verifying document, the judge shall also furnish for transmission such document of that nature as may be specified in the notice nominating the judge.
(3) Where the evidence consists of a document, the original or a copy shall be transmitted and, where it consists of any other article, the article itself or a description, photograph or other representation of it shall be transmitted, as may be necessary in order to comply with the request.
Supplementary
5. For the avoidance of doubt it is hereby declared that the Bankers’ Books Evidence Act, 1879, applies to the proceedings as it applies to other proceedings before a court. [4]
6. No order for costs shall be made in the proceedings.”
In the first place it is clear from the provisions of sub-s. (2) that the application in question is not made to the District Court but the review of the evidence is carried out by a judge of the District Court who is a persona designata, being a person nominated by the Minister for the purpose of receiving the evidence. From a reading of the second schedule it can be seen that it is not the District Court clerk but the judge himself or herself who is responsible for administering the oath. The section does not envisage an order being made by the judge of the District Court. Accordingly, it is clear that in light of the order produced in evidence by the applicant in the instant case, no such order can have in fact been made and it is clear that counsel for the second and third respondents were unaware of same prior to the hearing of this application. Accordingly, I am satisfied that the ‘order’ in question should be quashed. This order is entitled with the name of the Director of Public Prosecutions as prosecutor. Furthermore, the order is entitled “Courts Act, 1971, Section 14”. It is recited in the ‘order’ that an order was made to “Hand over all items in Police Property Application other than rings and photo albums, Items to be transferred to investigating authorities including roll of film and fingerprints and photographs of Mr. Brady.” This order is clearly misconceived. In the first place the Act of 1994 makes no provision for any order as such to be made. The proceedings are not proceedings before the District Court but the proceedings are, as previously indicated herein, before a judge of the District Court nominated by the Minister to “receive such of the evidence to which the request relates as may appear to the judge to be appropriate for the purpose of giving effect to the request”. In referring to the wording appearing in sub-s. (2) of s. 51, and in light of the provisions of para. 4 (1) of the Second Schedule, the judge of the District Court is required to furnish the same “to the Minister for transmission to the court, tribunal or authority that made the request”. If that is what has been done in the instant case I would not be disposed to interfere with same unless I were to conclude on the substance of the case before me in favour of the applicant.
With regard to whether the application before the respondent judge amounts to the administration of justice, I am satisfied having regard to the features of the administration of justice identified by Kenny J. in McDonald v. Bord nag Con [1965] I.R. 217 at p. 230 previously referred to herein that: [5]
1, the application as provided for in s. 51 of the Act of 1994 did not constitute a dispute or controversy as to the existence of legal rights or a violation of the law;
2, it did not amount to the determination or ascertainment of the rights of parties or the imposition of liabilities or the infliction of a penalty;
3, it did not amount to a final determination (subject to appeal) of legal rights or liabilities or the imposition of penalties;
4, the application did not involve the enforcement of rights or liabilities or the imposition of a penalty by the Court or by the executive power of the State which is called in by the Court to enforce its judgment;
5, the proceedings under s. 51 do not involve the making of an order by the District Court which as a matter of history is an order characteristic of Courts in this country.
Accordingly, I conclude that the application under s.51, irrespective of the setting in which it was made to the respondent judge, did not involve the administration of justice. On this basis I am satisfied that there was no requirement for such an application to be made before any court and that it was permissible for the application to be made by a person designated under law to perform the function of receiving evidence and having the same transmitted to the Minister.
In reaching this conclusion I am confirmed in my view by the judgment of Denham J. in Salinas de Gortari v. Smithwick [1999] 4 IR 223 previously referred to herein.
In light of this conclusion I am satisfied that the proceedings before the first respondent did not necessitate the giving of notice to the applicant of the proceedings under s. 51 and I am not satisfied that the applicant has established a right to be heard in the matter. In so ruling I am conscious of the requirements of constitutional justice. However, in light of the nature of the application, I am satisfied that the same did not require in the instant case that the applicant be heard by the first respondent. In reaching this conclusion I am influenced by the decision in Jennings v. Quinn [1968] I.R. 305. It is clear that it is authority for the proposition that at law evidence which may include property lawfully received by the Garda Síochána at the time of a person’s arrest may be transmitted out of the jurisdiction in circumstances such as in the instant case where the Minister is satisfied: [6]
( a ) that an offence under the law of the country or territory in question has been committed or that there are reasonable grounds for suspecting that such an offence has been committed, and
( b ) that proceedings in respect of that offence have been instituted in that country or territory or that an investigation into that offence is being carried on there.
The same is required in circumstances where a request is made for assistance in obtaining evidence in the State in connection with a criminal investigation that is being carried on in that country or territory.
It is clear from the provisions of s. 51 (5) that the Minister is not empowered to nominate a judge under sub-s. (2) thereof unless provision is made by the law of the country or territory or by arrangement with the appropriate authority thereof that any evidence that may be furnished in response to the request will not, without his consent, be used for any purpose other than that specified in the request. I am satisfied that where as in the instant case the applicant wishes to challenge the proceedings conducted before the nominated judge of the District Court that it is incumbent on the applicant to show that the Minister was not empowered to make the nomination in question by reason of the fact, either that no provision had been made by the law of the country or territory or by arrangement with the appropriate authority thereof that any evidence that might be furnished in response to the request would not, without his consent, be used for any purpose other than that specified in the request. This the applicant has failed to show in the instant case.
I am furthermore satisfied that an application for assistance could be made to the Minister in circumstances where a suspect is detained in the requesting state or in any event may not be in the State. In such circumstances it could not seriously be suggested that the provisions of s. 51 could not be applied until the attendance of the suspect or accused, as the case may be, was secured before the judge of the District Court nominated by the Minister. I am not disposed to hold that the attendance of the suspect or accused is ever required where the procedures of s. 51 are being applied other than in relation to the taking of evidence from the suspect himself or herself. [7]
With regard to the taking of evidence of a third party referred to in these proceedings, I am satisfied that there was no authority vested in the District Court to issue a warrant or other process for securing the attendance of that witness. However, the power was vested in the nominated judge to secure the attendance by the issue of a summons or other process as is vested in the District Court.
With reference to the Police Property application, I am satisfied that the existence of the application in question was not such as to deprive the Minister of the power to nominate a judge under s. 51 (2) of the Act of 1994 or such as to deprive the respondent judge of the power to assemble the evidence in question pursuant to the request made to the Minister. In this regard it may be that circumstances ordain that the transmission of the property in question should not take place until after the determination of such proceedings. However, no such issue arises in fact in the instant case as the transmission of the property in question has not preceded the hearing of that application.
The relevant provisions of the Act of 1897 provide as follows:
(1) Where any property has come into the possession of the police in connection with any criminal charge … a court of summary jurisdiction may, on application either by an officer of police or by a claimant of the property, make an order for the delivery of the property to the person appearing to the magistrate or court to be the owner thereof, or if the owner thereof cannot be ascertained, make such order with respect to the property as to the magistrate or court may seem meet.
(2) An order under this section shall not affect the right of any person to take within six months from the date of the order legal proceedings against any person in possession of property delivered by virtue of an order for the recovery of the property, but on the expiration of those six months the right shall cease.”
While it has been submitted that an application under s. 1 of this Act does not amount to the administration of justice I am satisfied that in the circumstances of this case it is not necessary to decide whether the hearing of an application under the Police Property Act, 1897 amounts to the administration of justice or otherwise.
[8] In all the circumstances of the case I am satisfied that the applicant’s claim that the Act of 1994 and in particular s. 51 thereof is invalid having regard to the provisions of the Constitution must fail. Furthermore, I am satisfied that the applicant has failed to establish entitlement to the further relief sought and accordingly I refuse this application.
Representatives of Chadwick and Goff v Fingal County Council,
unreported, High Court, O’Neill J., October 17, 2003
JUDGMENT of O’Neill J. delivered the 17th day of October, 2003
These proceedings are a consultative case stated for the opinion of the High Court in which the property arbitrator Mr. John R. Shackleton submits the following question:
“Am I correct in holding that upon the true construction of section 63 of the Lands Clauses Consolidation Act 1845, the compensation for injurious affection to the lands retained by the claimants, caused by the carrying out of the works and subsequent use of the motorway, is limited to injurious affection caused by such works on and such use of, the land actually acquired from the claimants?”
BACKGROUND
The respondent as the “acquiring authority” by virtue of the Acts cited in the title hereof was empowered to construct a motorway from the existing M1 at the airport to the Balbriggan bypass. By virtue of the Fingal County Council Northern Motorway (Airport to Balbriggan Bypass) Scheme 1995, the respondents were empowered to acquire, inter alia, lands of the claimants. The claimants are the owners of a property on the north side of Malahide estuary, about a mile north of Swords and nine miles from Dublin City Centre, east of the existing M1 national primary route. The property is comprised of a substantial three storey 18th century house on circa 18 acres of land together with farm buildings and a gate lodge. The house is a listed building. For the purposes of carrying out the motorway scheme the respondents compulsorily, acquired from the claimants, .047 hectares (circa .116 acres). This land was comprised in two plots being plot 47 and plot 47 A. Both of these plots were at the eastern end of the claimants land. No part of this land taken under the scheme, formed part of the carriageway of the new motorway. Plot No. 47 was used as part of the embankment leading up to the bridge which spanned the Malahide estuary. No part for the works were constructed on plot 47 A which formed part of an existing roadway.
The claimant’s residence is 198 meters from the carriageway of the motorway at its closet point and 250 metres from the bridge abutment.
The claimants contend that the value of their property will be depreciated by its proximity to the new motorway, and in their claim for compensation under section 63 of the Lands Clauses Consolidation Act 1845, they claimed to be entitled to recover the entire depreciation in value of their property as “injurious affection” of their retained lands, caused by the exercise by the respondent of their relevant statutory powers in carrying out the motorway scheme.
The respondents resist this aspect of the claim, contending that any “injurious affection” of the claimants retained lands is limited to injury caused to those lands by such works as are carried out on, and such user as takes place on the land actually taken from the claimants, and as the land actually taken from the claimants is used merely as a landscaped embankment, and being no being part of the carriageway of the motorway, the claimants claim in respect of injurious affection is limited to such injury, if any, as is caused by that limited use and cannot extend to the depreciation of their property, caused by the use of the two carriageways as a highway, which are constructed on lands not taken from the claimants.
The issue raised in this case stated has not been considered by the courts in this jurisdiction heretofore but has been the subject of several judgments in the United Kingdom and in recent times in the High Court of Australia.
At the root of the controversy is section 63 of the Land Clauses Consolidation Act 1845 which is in the following terms:
“63. In estimating the purchase money or compensation to be paid by the promoters of the undertaking, in any of the cases aforesaid, regard shall be had by the justices, arbitrators, or surveyors, as the case may be, not only to the value of the land to be purchased or taken by the promoters of the undertaking, but also to the damage, if any, to be sustained by the owners of the land by reason of the severing of the lands taken from the other lands of such owner, or otherwise injuriously affecting such other lands by the exercise of the powers of this or the special act, or any act incorporated therewith.”
SUBMISSIONS OF THE CLAIMANTS
It was submitted by Mr. Mohan S.C. and Mr. Ralston S.C. that the interpretation of section 63 contended for by the respondents is not supported by the words used in the section; that a literal interpretation of the section supports the claimants case and that to arrive at the interpretation favoured by the respondent, would require the addition to the section of words which are not there limiting its effect to injury caused by works on or user of the land taken rather than as is expressed in the section, injury cause “by the exercise of the powers of this or this special act or any act incorporated therewith”.
They submit that as the section in question has been re-enacted in effect in various statutes since the foundation of the State, and since 1937 in particular, it is to be considered as a post Constitution Statute enjoying the presumption of constitutionality. Therefore if two or more interpretations of the section are under consideration only that one which is in conformity with the Constitution can be adopted.
They submit that under article 43 of the Constitution it is imperative that where land is compulsorily taken, as in this case, that full compensation must be paid, t in the sense that the claimant must recover the whole of his loss, no more or no less. In this regard they rely upon the authority of Underwood v. Dublin Corporation [1997] 1 I.R. p 70.
They submitted that this Court now confronted for the first time with construing section 63, cannot be bound by the decisions of courts of another jurisdiction or by professional practices that may have been based on such judicial decisions. In this respect they refer to a line of authority in the United Kingdom culminating in the judgment of the Court of Appeal in the case of the Minister For Transport v. Edwards [1964] 2 Q.B. 134. They submit that the case of Edwards was wrongly decided, but that in any event should not be considered persuasive authority as it conflicts with the only interpretation of section 63 which they submit is consistent with article 43 of the Constitution as mentioned above, in that it would deny the claimant compensation for the whole of their loss, and hence should not be followed by this court.
They submit that in the long line of authority reviewed by Harman L.J. in the Edwards case and indeed followed by him; in only one of the cases mentioned was section 63 itself in issue and that was in the case of The Duke of Buccleuch v. Metropolitan Board of Works [1872] L.R. 5 H.L. 418, and in that case the speeches of their lordships support the proposition now advanced by the claimant namely that they should be entitled to recover the entire depreciation in the value of their property, land having been taken from them compulsory, on the grounds of injurious affection of their retained property, by the entire motorway scheme.
They urge this court to adopt and follow the reasoning of the High Court of Australia in a recent case namely Marshall v. The Director General, Department of Transport [2001] H.C.A. 37, (21st June, 2001), in which all of the Judges of the High Court of Australia rejected the authority of the Edwards case preferring instead reasoning based upon a literal interpretation of the relevant Australian statutory provision, which was held in one of the judgments to be in substance the same as section 63 of the Act of 1845.
They submit that it is immaterial that persons from whom no land was taken have to suffer the same or worse ill effects on their property, but because no land was taken from them, they have no right to compensation for such loss. Their predicament cannot and should not result in the interpretation of section 63 so as to deny the claimant or somebody else from whom land was taken to an inadequate level of compensation, not warranted by the actual terms of section 63.
For the respondents it was submitted by Mr. O’Reilly S.C. and Mr. Butler S.C. that section 63 of the Act of 1845 has been correctly interpreted in judgments of the House of Lords, Privy Council and Court of Appeal, in the line of authority which culminated in the Edwards case, and this has been accepted by all of the established Irish commentators. They submit that compensation is payable only under section 63 in respect of lands which are taken and where part only of lands are taken under section 63 compensation is payable for the part so taken and any claim for injurious affection is proportionate to the lands taken and their use and not otherwise.
They submit no right of action on grounds of nuisance can arise from the use of land authorised by statute or administrative decision and that section 63 is an exception to this general principle because it allows recovery for damage occasioned authorised use of land or lands taken from the claimant. They submit that this necessarily excludes compensation for damage caused by authorised use of land not taken from the claimant as to grant damages in such a case would breach the constitutional principle of equality, because other property owners who may be equally or even worse affected than the claimant will not be entitled to claim damages if no part of the land was taken, as in that circumstance they could not come within section 63 of the 1845 Act.
They submit that the claimants are constrained to challenge the constitutional validity of section 63 of the Act of 1845 and its re-enactment in section 52 of the Roads Act 1993, which they cannot do in these proceedings.
They submit that the principle of proportionality in the interpretation of property rights, as discussed in the In re article 26 of the Constitution in the matter of part 5 of the Planning and Development Act 1999 [2000] 2 IR 321 supports the respondents submissions on the interpretation of section 63.
DECISION
The first thing I should draw attention to is the wording of section 63 itself, where it provides that the cause of injurious affection which can be a source of compensation is where it is caused “by the exercise of the powers of this or the special Act, or any Act incorporated therewith”. The “special Act” in this case would be the Roads Act 1993, in particular section 52 thereof and “any Act incorporated therewith” would comprise in this case The Acquisition of Land (Assessment of Compensation) Act 1919, and section 10 of the Local Government Act 1960 as inserted by section 86 of the Housing Act 1966.
I mention these enactments at this junction not because any issue or controversy arises in this case out of them, but merely to say that there is nothing in these enactments which adds to or alters the basis for compensation, which is set out in section 63 of the 1845 Act itself. The reason I draw attention to this, at this stage is because it is quite clear to me from some of the early English cases, and specifically the cases of the Hammersmith and City Railway Company v. Brand [1869] L.R. 4 H.L. 171, and The City of Glasgow Railway Union Company v. Hunter [1870] L.R. 2 H.L. S.C. 78, and the case of The Duke of Buccleuch v. Metropolitan Board of Works [1872] L.R. 5 E.X. 221, that in those cases the basis for the ascertainment of compensation, was found in the first two cases not at all in section 63 and in the third case partly in section 63 and also in the Thames Embankment Act 1862.
In the instant case however it is clear that it is section 63 itself and it alone that is to be considered, as the basis of any entitlement of the claimant to compensation for injurious affection.
My first necessary task is to review the line of authority which culminated in the Edwards case in the light of the submissions made for the claimant.
The case of Leigh v. The Stockport, Tilbury and Altringham Railway Company [1864] 33 L.J. Q.B. 251 appears to be the point from which the modern line of authority takes its departure. It was submitted by Mr. Mohan that this was a case which was decided under section 68 of the Act of 1845 and not section 63 and he bases that submission on the head note to the case which undoubtedly does recite section 68. However it would seem to me, from the body of the report that the reference to section 68 is in error and it should have referred to section 63, as it is clear from the body of the report that the case could only have been dealt with under section 63, it being a case in which land was taken.
The facts of this case briefly were that Mr. Leigh was the owner of a cotton mill and some of his land was taken by the acquiring company for the purposes of a railway. He was in due course compensated for the taking of the land but he claimed compensation for injurious affection on the basis, that because of the risk of fire caused by sparks from the running of trains on the land that was taken from him that the land which he retained was depreciated in value and not insurable except at a greatly increased premium.
His claim in this regard was resisted by the Railway Company who relied upon the then, established principle, that where compensation was sought for injurious affection, it could only be awarded where that which was complained about was an actionable wrong in respect of which the Act, authorising the taking of the land for the purpose of the public undertaking in question, in effect provided an immunity. Thus compensation for injurious affection under section 63 or indeed also, similar enactments could only be awarded where Parliament had taken away a right of action which but for the intervention of Parliament, could have been pursued by action in the normal way.
The learned judge appeared to depart from this principle, but only to the extent that the works or user complained of was done on the land taken from the claimant.
This, therefore is the first case in which the rule that the respondents in this case now invoke, was applied. The following passage from the judgement of Crompton J. in that case illustrates the original principle and the important departure from it as follows:
“On the part of the company it was denied that the premises were rendered less convenient and fit for the purposes of a cotton mill and that the value of the mill was diminished by reason of what was done by virtue of the powers of the Act; but it was asserted that no action would have lain against any proprietor for damage from fire arising from the proximity of works or engines carried on and managed without negligence and therefore that the case fell within the well established rule that compensation is only given by such Acts of parliament where what would have been unlawful and actionable but for the Act of Parliament is permitted by the Act of Parliament and compensation thereof allowed in lieu and by reason of such right of action being taken away. I adhere entirely to this rule as laid down by my brother Willes in Broadbent v. The Imperial Gas Company and in many other cases; but the question here is whether such rule is at all applicable to cases where part of the land is taken and compensation is given not only for the value of the part taken, but for the rest of the land being injuriously affected, either by severence or otherwise, and I am of opinion that the distinction pointed out by Mr. Manistry is correct, and that the rule in question does not apply to such cases. Where the damage is occasioned by what is done upon other lands which the company have purchased and such damage would not have been actionable as against he original owner as in the case of the sinking of a well and causing the abstraction of water by percolation, the company have a right to say, “We have done what we had a right to do as proprietors and do not require the protection of any Act of parliament, and we therefore have not hindered you by virtue of the powers of the Act and no cause of action has been taken away from you by the Act.
Where, however, the mischief is caused by what is done on the land taken, the party seeking compensation has a right to say:
“It is by the Act of Parliament and by the Act of parliament only that you have done the acts which have caused the damage. Without the Act of parliament everything you have done and are about to do in the making and using of the railway would have been illegal and actionable, and is therefore a matter for compensation according to the rule in question.”
I think therefore that the distinction between cases where the land is taken and the cases of abstraction of light, rights of way, by acts done on other lands is well founded. This distinction is referred to by my brother Blackburn in the recent case of Chamberlain v. Crystal Palace Company 6 L.T. REP. M.S. 318 as having been taken in former cases. I am of opinion that the premises in question were injuriously affected and that within the sections of the Land Clauses Act as to compensation where land is taken and that the jury have rightly included the damages for such injury in their verdict.”
What is to be gleaned from this case, is that there was a core principle at that time governing the ascertainment of compensation for injurious affection provided for under section 63 of the Act of 1845, which was that compensation could only be awarded where the authorising Act protected the promoter of the undertaking from action in respect of an actionable wrong. Thus the normal user of the facility provided pursuant to the Act of Parliament e.g. a Railway, Sewage Plant, a canal etc. would not give rise to the injurious affection unless it amounted, in itself, to an actionable wrong. In the above case it was clear that the running of trains along tracks was not in itself an actionable wrong although it did give rise to sparks which created the problem for Mr. Leigh.
As a result of the judgment of Crompton J. in that case compensation could thereafter be recovered for injurious affection to the land retained by a claimant resulting from the non actionable user of a public facility provided pursuant to Act of Parliament, but only on the land taken from that claimant.
The reason for the departure taken by Crompton J. and the restriction of it to the activity on the land taken is perfectly clear, and it is, that the user of the taken land, would be an actionable wrong as against the original owner from whom it was taken, in that, all the activities, both the execution of works and use of the facility when constructed, would be a trespass, unless excused or immunised by the Act of Parliament. On the other hand these identical activities done on land not taken from the claimant would never be actionable as a trespass, and in the absence of negligence not otherwise actionable by the claimant, and consequently the restriction of compensation to activity on the taken land is clearly right in principle.
Hence the reasoning of Crompton J. is impeccable, in that he permitted compensation to be recovered as injurious affection because everything done on the taken land would but for the Act of Parliament be a trespass, whereas if done on the land which was never the property of the claimant would not at all, be actionable, His ruling is in effect, an aspect of the older principle, that where Parliament provides for the award of compensation for injurious affection it can only by awarded in respect of what would be an actionable wrong in respect of which parliament provides immunity under the relevant act to the perpetrator.
Before leaving consideration of this case I would draw attention to the portion quoted above where the learned judge says “I am of the opinion that the premises in question injuriously effected within the sections of the Land Clause Act as to the compensation where land is taken …”. Manifestly, in my view it is section 63 that is referred to there and not section 68.
The effect of the age old principle that compensation for injurious affection could not be awarded in respect of what would not have been an actionable wrong, is that no-one could claim compensation for injurious affection for any injury to property caused by the user of the public facility, without negligence, authorised by Parliament. Hence the community or in particular those members of it who happen to live near to public undertakings, such as railways, motorways, sewerage treatment plants etc. were not entitled to compensation for the depreciation of their properties from the ordinary user of these facilities. The rule which emanated from the Leigh v. Stockport case has often been characterised as an exception to this general principle and indeed so it was submitted by the respondent in this case. In my view it is not an exception to the general principle, but as stated earlier, merely an aspect of it. The taking of a claimants land and the doing on it of any acts would be an actionable trespass. That wrong, in respect of which there is an immunity or protection under the relevant acts of Parliament, distinguishes the situation of the land owner from whom a portion of land is taken from the predicament of the community in general from whom nothing is taken. A separate and distinct wrong is perpetrated on the landowner from whom land is taken which is not inflicted on those in proximity to a public undertaking but from whom no land is taken.
Were compensation for injurious affection not to be provided on this basis to someone for whom portion of their land was taken it could very well be said that the right to compensation for injurious affection under section 63 would have been rendered nugatory. The limitation of that compensation to in the execution of works or the user on the land taken, is in my view necessary, having regard to the general principle applying to the injurious affection, whether caused to someone from whom land is taken or otherwise, that compensation under this heading is only provided in respect of an actionable wrong for which immunity is provided by the relevant Act of Parliament.
The existence of this core principle is undoubtedly necessary, as in its absence, in claims for compensation for injurious affection from both those whose lands are taken and others under section 68 of the Act, compensation would have to be awarded for injury to property, in circumstances where the claimant would have had no right of action in respect of that injury under the common law. Thus it could be said that section 63 and similar statutory provisions gave a new right to compensation where no right to compensation for the same injury existed at common law. The above case and indeed may others make it clear that section 63 and similar enactments have been construed, on the basis that Parliament did not intend to provide compensation where no right to same existed at common law, but instead intended to provide compensation only where an existing right to compensation was taken away by the authorisation in the relevant statute enabling a particular public undertaking to proceed.
However in the case of the owner from whom land is taken the granting of compensation for user on the land taken was right in principle because a legal wrong i.e. a trespass would but for the Act of Parliament have occurred and its limitation to the land taken was also right in principle because the wrong in question could not extend beyond the boundaries of the land taken to activity conducted on other lands, and the granting of compensation for injurious affection to a land owner in these circumstances recognises a real distinction between the circumstance person from whom land has been taken and the predicament of the general community whose property may be in proximity to the public facility in question.
Moving next to the case of the Hammersmith and City Railway Company v. Brand [1869] L.R. 4 H .L. 171. In this case the claimant claimed damages for injurious infection because of the vibration caused by the running of trains over a railway line which was adjacent to her premises. No land of the claimant was taken for the purposes of the railway. The House of Lords rejected a claim holding that Mrs. Brennan’s right to compensation was to be determined under sections 6 or 16 of the Railway Clauses Act of 1845 rather than under the Land Clauses Consolidation Act of 1845, and a narrow construction was placed on these sections because of the heading in the Act under which they came namely; “And with respect to the construction of the railways and the works connected therewith be it an Act as follows”. The sixth section of that Act was in the following terms:
“In exercising the power given to the company to construct the railway and to take lands for that purpose the company shall be subject to the provisions and restrictions contained in this Act and in the Land Clauses Consolidation Act and the company shall make to the owners and occupiers of and all other persons interested in any lands taken or used for the purposes of the railway or injuriously affected by the construction thereof full compensation for the value of the land so taken or used and for all damage sustained by such owners occupiers and other parties by reason of the exercise as regards such land of the powers by this or this special Act or any Act incorporated therewith vested in the company.”
Injury resulting from “the exercise as regards such land as the powers by this or this special Act or any Act incorporated therewith vested in the company.” as provided for in section 6 of this Act was held to be confined to injury resulting from the construction of the railway rather than its use on the basis of the title to that part of the Act and also the use of the phrase “by the construction thereof” in the body of section 6. Thus injury resulting from the user of the railway was held to be excluded. A similar conclusion was reached in relation to section 16 of the same Act which was in the following terms:
“It shall be lawful for the company for the purposes of constructing the railway or the accommodation works connected therewith hereinafter mentioned to execute any of the following works…..and all other acts necessary for making and maintaining altering or appearing and using the railway.”
The phrase “using the railway” had been relied upon by the claimant but it was held that the works mentioned in the context of this section were for the purpose solely of preparing or enabling the railway to be used and not for the actual use of the railway.
This case was also distinguished on the grounds that no land was taken.
The case of City of Glasgow Union Railway Company v. Hunter [1870] L.R. 2 H.L. S.C. 78 quickly followed the Brand case. In this case also compensation was claimed for injurious affection arising from the noise or smoke which would be generated by trains. The Brand case was followed and hence it was held that compensation could only be awarded in respect of injury arising from the carrying out of the construction of the railway and not its use.
In this case, the case of Leigh v. Stockport Railway was referred to but distinguished because Brand’s case was followed and hence damages confined to injury arising from the execution of the works. Doubt was cast over the correctness of the judgment of Crompton J. in the Stockport Case in the speech of Lord Chelmsford but he distinguished the Stockport case on the additional basis that in that case the damage complained of took place on the land taken whereas in the Hunter case the activity complained of took place not on the land taken, but on a railway bridge over the land of another person. He had this to say however in respect of the judgment of Crompton J. in the Stockport case:
“If I had to express an opinion upon the correctness of this decision I should be disposed to say with Baron Bramwell in the case of the Duke of Buccleuch v. the Metropolitan Board of Works (1).
‘It does seem strange that the taking of a piece of a man’s land should let him in to prove all sorts of damage for which he could not otherwise recover’.”
The Hunter case fell to be decided under the provisions of the Railway Clauses (Scotland) Act which was in identical terms to the Railway Clauses Act 1845.
As these two cases were decided under the provisions of the Railway Clauses Act and not the Land Clauses Consolidation Act 1845 and as the decision in each case resulted from the construction of the particular provisions of those Acts which are not similar to the Land Clauses Act they do not afford much assistance in the interpretation of section 63 of the 1845 Act.
The next case which must be considered is that of The Duke of Buccleuch v. the Metropolitan Board of Works [1870] L.R. 5 H.L 418 in this case the Duke was the owner of a property known as Montague House whose grounds ran down to the Thames in Whitehall in London. The property enjoyed access to the river by means of a gate which led to a causeway or jetty which extended out into the river so as to provide access to the waters of the river at all times regardless of the level of the water. A scheme for the creation of an embankment under the aegis of the Thames Embankment Act 1862, resulted in the taking of the causeway and the creation of an embankment with a road thereon which separated the Duke’s property from the river. He made a claim for compensation under section 63 of the Act, and inter alia he was awarded the sum of £5,000 to reflect the diminution in the value of his property because of the use of the embankment as a highway with all of the noise dirt and inconvenience that would accompany that. The House of Lords upheld this award to him, and the claimant herein, relies heavily on the authority of this case as supporting the interpretation of section 63 which he contends for.
The leading speech was given by Lord Chelmsford, in which he said the following:
“The only question upon which there has been a difference of opinion among the judges is, whether the umpire was authorised to give compensation in respect of the depreciation of Montague House by the conversion of the lands between it and the river into a highway and the consequent public use of it. This question partly depend upon the 63rd section in Land Clauses Consolidation Act 1845 which is incorporated with the Thames Embankment Act and which enacts that in estimating the purchase money or compensation to be paid by the promotions of an undertaking
‘regard shall be had not only to the value of the land to be purchased or taken but also to the damage (if any) to be sustained by the owner of the lands by reason of the severing of the lands taken from the other land as such owner, or otherwise injuriously effecting such other lands by the exercise of such power’.
The plaintiff was the owner of land within the meaning of this clause in respect of the causeway which was taken away from him. It is quite immaterial whether the soil of the causeway belonged to him or he had merely an easement over; for by the 4th section of the Thames Embankment Act, the word “lands” is to include easements, interests, rights, and privileges in, over, or affecting lands; and the 27th section of the same Act empowers the Metropolitan Board of Works to appropriate by grant or demise any reclaimed land, &c., to any owner of lands now situated on the present left bank and river frontage of the river Thames…….
This section contemplates two descriptions of damage likely to be sustained by the owners of land on the bank and river frontage of the Thames – one loss of the river frontage; the other in any other manner, by reason of the embankment or other the exercise of any of the powers of the Act.
It seems to me to be quite clear that the umpire was entitled to consider not only the damage which the plaintiff sustained by being deprived of the causeway but also whether he was entitled to compensation in respect of damage otherwise sustained by reason of the embankment. Now, if he was of opinion that Montague House was depreciated in valued as a residence by reason of the proximity of the embankment and of all the consequences of its use as a public highway, he was bound to give the plaintiff some compensation, and the amount proper to be awarded was entirely for him to determine.
It can hardly be doubted that in addition to the damage sustained by the loss of the river frontage the house must have been “injuriously affected” – i.e. depreciated in value – by way of in interposition between it and the river of an embankment to be used as a public highway; and this seems to bring the right to compensation within the very words of the 27th section of the special Act because it is damage otherwise than by loss of the river frontage by reason of the embankment or roadway.”
Lord Westbury and Lord Colonsay concurred in the speech of Lord Chelmsford. Lord Cairns reached a conclusion in favour of the Duke but on a different basis, namely, determining his loss to be the result of an injury to his riparian right by the taking away of his entire water frontage.
I am not in agreement with the submission for the claimant, that this case is a clear authority on the interpretation of section 63 of the Act of 1845. It seems clear to me that Lord Chelmsford was greatly influenced in the conclusion that he reached by the provisions of section 27 of the Thames Embankment Act which was the special Act and indeed the last paragraph above quoted would seem to suggest that it was upon this section that he rested his judgment.
The alternative approach adopted by Lord Cairns appears less persuasive to me. There was no dispute, but that the basis of the umpires award £5,000 in respect of the depreciation of the property had nothing to do with the loss of a riparian right, but was expressed to be on account of the interposition between the Duke’s property and the river of an embankment with a highway on it with all of the attendant annoyances that would go with that.
The next case for consideration is that of Cowper Essex v. Local Board for Acton [1889] 14 APP. CAS. 153. In this case compensation was claimed under section 63 of the Act of 1845 where the respondents compulsorily acquired lands of the claimant for the purposes of sewerage works. A jury who assessed compensation awarded a sum for the injurious affection of the claimants retained lands by reason not only of the construction of the sewerage works but also in respect of their use upon the lands taken from him.
Of particular note in this case is that the case of Leigh v. Stockport Timperley and Altrincham Railway Company was expressly approved.
The following passage from the judgment of Lord Halsbury illuminates the reasoning adopted;
“My lords with reference to the main question I have had less difficulty since I take it that two propositions have now been conclusively established. One is that land taken under the powers of The Land Clauses Act and applied to any use authorised by the statute, cannot by its mere use, as distinguished from the construction of works upon it, give rise to a claim for compensation. But a second proposition is, it appears to me not less conclusively established and that is, that where part of a proprietor’s land is taken from him, and the future use of the part so taken may damage the remainder of the proprietor’s land, than such damage may be an injurious effecting of the proprietors other lands, though it would not be an injurious effecting of the lands of neighbouring proprietors from whom nothing has been taken for the purpose of the intended works.
It may seem at first sight a little strange that what is injurious effecting in one case should not be in the other. But it is possible to explain that apparent contradiction by the consideration that the injurious effecting by the use, as distinguished from the construction, is a particular injury suffered by the proprietor from whom some portion of his land is taken, different in kind from that which is suffered by the rest of her majesty’s subjects.”
He then goes on to say:
“It is, however unnecessary to consider the question as if it were res integra, since I think that Buccleuch v. Metropolitan Board of Works, has established the proposition in such a way as to be binding upon your Lordships. I think it is impossible to explain that case when the question expressly raised was whether the umpire had awarded damages in respect of the future use of the embankment as distinct from its construction, and when it was admitted that he had awarded damages in respect of the use of the intended road, and your lordships affirm the right to make such an award.”
This is an important case because, regardless of what may be submitted and argued as to the effect of the speeches in the Buccleuch case, there is no doubt that the Cowper Essex case is conclusive authority for the proposition that section 63 is to be construed so as to permit compensation for the user as well as the execution of the works on the part of the land taken, where that injuriously effects the retained land, and Lord Halsbury was of the view that Buccleuch v. Metropolitan Board of Works was binding authority for that proposition. This result is expressed most neatly in the following passage from the speech of Lord Watson where he say;
“It appears to me to be the result of these authority which are binding upon this house, that a proprietor is entitled to compensation for deprecation of the value of his other lands, insofar as such depreciation is due to the anticipated legal use of works to be constructed upon the land which has been taken from him under compulsory powers. The construction of the Act which has been thus adopted by the House has previously been enforced by Mr. Justice Crompton in the Stockport case.”
Lord Watson was also of the view that the speeches in the House in Buccleuch v. Metropolitan Board of Works were consistent with this principle.
The next case referred to is Horton v. Colwyn Bay and Colwyn Urban District Council [1908] 1 K.B. 327. This was a decision of the Court of Appeal. The facts of the case briefly were that the respondents took portion of the claimant’s land for the purpose of sewerage works. However all that was done on the lands taken from the claimant was the laying of pipes to take sewerage to and from the sewerage works, which were constructed on other lands. As part of his claim the claimant claimed for the depreciation in the value of his retained property caused by the construction and use of the main sewerage works which of course was not on the land taken from him.
In the course of his judgment Lord Alverston C.J. said the following:
“For a great many years it was thought and eventually was held to have been wrongly thought, that it made no difference as to the extent of a claim for compensation for injuriously affecting, that any land of the claimant had or had not been taken. The contrary view which had been expressed by Crompton J. in the well known Stockport case was at one time thought not to be good law. The question came under review in the House of Lords in the Copper v. Essex case and it must now be taken to have been decided by judgements, which are of course binding upon us sitting in this court, that a persons whose land has been taken is entitled to compensation which he would not have been entitled to if none of this lands had been taken, either on the ground, to use the language of some of the authorities, that he could have prevented the statutory undertaking from being carried out, and so could make his own terms, or on the ground that, in as much as some of his land was taken and an actionable trespass would, but for the statutory powers, have been committed, he was entitled to the full measure of common law damage.”
The judgement of Buckley L.J. in the same case follows the Stockport case and the Cowper Essex v. Acton Local Board case and the following is said:
“The principal of the Stockport case was applied and extended by the House of Lords in Cowper Essex v. Acton Local Board to this extent, that if the claim is by a person from whom land has been taken compulsorily, he may have compensation for damage sustained by the injuriously effecting of other lands of his, and such damage is not confined to damage in construction, but extends to damage in user of that which is constructed on the land taken from him.
But no case has been cited, and none I think exists, in which the doctrine has been applied to damage occasioned by works erected upon land not taken for the claimant.”
Further on in his judgment he says the following;
“The appellant argues that he is within the Stockport case and the Cowper Essex case, upon the ground that the pumping station and reservoir that was situated on land other than land of the claimant, forms with the sewers laid in his land one sewage undertaking. The test is not whether the whole formed one undertaking — a railway undertaking is one undertaking. The test is whether that part of the undertaking which lies on the claimants land has created the injury to the claimants adjoining lands.”
It is to be noted of course that the statutory provision in question was section 308 on the Public Health Act 1875. However it would appear from the argument and the judgments, that there was no difference of any substance between its terms and section 63 of the Land Clauses Act 1845.
The next case referred to was the case of the Sisters of Charity of Rockingham v. the King [1922] 2 AC 315. Here we have a judgment of the Privy Council on a dispute occurring in the province of Nova Scotia in Canada, which follows the Cowper Essex v. Acton Local Board case and applies the principles set out there, to the relevant Canadian statutory provision.
That brings me finally to the case of Edwards v. The Minister for Transport [1964] 2 Q.B. 134 which is said to be the modern authority, restating the principles laid down in the earlier cases and which Mr. Mohan submits specifically has been wrongly decided or should not be followed.
The facts in that case are quite similar to the facts in the instant case. In the Edwards case the claimant owned a substantial dwelling house with a number of acres around it. The respondents had a scheme to build a trunk road and for that purpose took from him two small parcels of land. One of these pieces of land jutted into one of the carriageways of the road over a very short distance. The other piece of land was taken for the purposes of rearranging an entrance. The issue as to compensation was yet again the same, namely, whether or not the claimant was entitled to recover the full depreciation in the value of his retained lands or whether he was confined to such loss as was caused by the user of the lands actually taken from him. There can be no doubt from the head note and indeed from the body of the judgment that the claim involved was made under section 63 of the Land Clauses Consolidation Act 1845 and thus the issue considered in the Court of Appeal was directly related to that section.
In the course of his judgment Harman L.J. reviews some of the authorities discussed above, and I would respectfully agree with his review, save in one instance, where I would respectfully disagree with his discernment of the ratio decidendi of the decision in the Buccleuch case which he appeared to derive from the speech of Lord Cairns in that case; as being the loss of a riparian right by virtue of the loss of the whole of the river frontage, thus giving rise to a claim large enough to cover the whole of the damage to the whole of his interest whatever that interest might have been. In my view the ratio in the Buccleuch case is to be found in the judgment of Lord Chelmsford and appears to rest largely, on section 27 of the Thames Embankment Act 1862.
In the result having reviewed the authorities, Harman L.J. with whom Donovan L.J. and Watson L.J. agreed, relying on the principles set out in the authorities, discussed above came to the conclusion that the damage resulting from the user of the motorway had to be confined to that very limited damage occurring on the portion of the land taken from the claimant.
Mr. Mohan submitted that of all of the cases referred to, only the Buccleuch case was dealt with under section 63. I must disagree with that submission. It is apparent to me from a review of the cases that the Stockport case was a case under section 63. Undoubtedly the Buccleuch case was a case in which the claim was made under section 63 but its determination appears to me to have been heavily influenced by section 27 of the Thames Embankment Act. Without any shadow of a doubt Cowper Essex case was decided under section 63. And finally the Edwards case was a case under section 63.
Were these cases wrongly decided or should they not now be followed in this jurisdiction? To answer that question involves a consideration of whether the underlying principles discussed above ought to apply in the application of section 63 and specifically should there be adherence to the principle that compensation should only be paid in respect of injury resulting from what would have been an actionable wrong but for the intervention of Parliament, providing immunity to the promoter of the undertaker. If this principle is consistent with a correct interpretation of section 63, then the next question is whether the rule which originated in the Stockport case and ultimately approved in the House of Lords in the Copper Essex case and faithfully followed thereafter culminating in the Edwards case, is sound in principle and to be applied in this jurisdiction.
The real question here is whether the original principle, namely no compensation unless an actionable wrong is shown is consistent with the correct interpretation of section 63. If it is, there is no doubt in my mind but that the principle emanating from the Stockport case is well reasoned and sound in principle.
There is no doubt that the courts of the United Kingdom at every level have upheld this principle, leading inexorably to the conclusion that so far as that jurisdiction was concerned its courts found no inconsistency between that principle and a true interpretation of section 63. Necessary to that conclusion is a view that Parliament in enacting section 63 did not intend that compensation would be provided for injury which would not otherwise attract damages.
The fundamental objective of statutory interpretation is to give effect to the intention of Parliament, that intention of course to be discerned from the language of the statute in question save where ambiguity or absurdity exists so as to cloud the real intention of Parliament. The principle that, no compensation should be paid where the injury would not otherwise attract damages is of course not expressly included in section 63 or in any other provision of the Act of 1845. The proposition stated in this principle would appear to me to be so obvious, as to hardly require express statement. If this were an issue of interpretation of a contract in which it was claimed that that the above principle was an implied term, I would have no hesitation in concluding that the “bystander test” was satisfied.
I see no inconsistency between the observance of this principle and the express terms of section 63 and furthermore I would be inclined to the view that an interpretation of section 63 which excluded that principle would in reality defeat the true intention of Parliament which could fairly be said was; where land was compulsorily taken, to fully compensate for that; in the first instance by paying the full value for the land; secondly paying for damage resulting from the severance of one piece of land for another and thirdly to pay for damage to the owner of retained land where the use of the taken land injures the retained land. It is clear from the entirety of the Act of 1845 that for those whose land was not taken there is no right to compensation except under section 68, where injury to property is caused by the execution of the works. Quite clearly what is entirely excluded from the statutory scheme of compensation is a right to compensation for those whose land is not taken, for injury caused by the user of the public facility in question. These limitations on access to compensation under the statutory scheme in my view support the principle that compensation is provided only where but, for the act of Parliament, the injury complained of, would be actionable. The existence of this principle in my view derives from the scheme of the Act which limits compensation in this way for those whose land is not taken. If their right to compensation is limited in this way it would seem to me necessarily to follow that the right to compensation under section 63, where land is taken, is not intended to be so extensive, as to, merely on the ground that some land was taken, to enable that owner of land to claim as injurious affection depreciation and the value of the property caused by the user of a public undertaking, which the rest of the community living in proximity to the public undertaking must suffer in exactly the same way, but without any recourse to compensation under the Act.
I am satisfied therefore that the principle that compensation can only be awarded under sections 63 and in respect of a wrong which would be actionable but for the intervention of Parliament is not only consistent with section 63 but in my view is necessary to it to ensure that the section operates in harmony, in particular with section 68, so as to provide compensation to members of the community injured by public works on a basis which as between those who have some land taken from them and some who do not, is both rational and fair.
I am equally satisfied that the rule which permits compensation to a land owner from whom land has been taken for injury caused by the user of the taken lands but confined to the user on the taken lands is also rational, right in principal and fair as being compensation in respect of an actual wrong i.e. trespass, and fair to the rest of the community, in the sense that this is a separate injury to the land owner from whom land is taken, which is not suffered by the rest of the community who live in proximity to the public undertaking but from whom no land is taken.
This brings me to the next issue raised by the claimant and that is whether the rule thus stated derived from these authorities, is consistent with the Constitution.
For the claimants it was submitted that in compulsorily taking the claimants land, the respondents were obliged to compensate the claimant for the entirely of loss resulting from this, which includes the full depreciation in the value of their property by reason of the carrying out of the motorway scheme. In this regard the claimants rely upon the judgment of the Supreme Court in the case of Dublin Corporation v. Underwood [1997] 1 I.R. 69.
For the respondents it was submitted that the rule limiting compensation to user of the lands actually taken was in conformity with the principle of equality contained in Article 40.1 of the Constitution, and if there was any interference with the property rights of the claimants it was a proportionate interference in the sense as discussed in In re in the matter of Article 26 of the Constitution and in the matter of part 4 of the Planning and Development Bill 1999 [2000] 2 IR 321.
It needs first to be determined whether or not there has been any infringement of the claimant’s rights under article 43 of the Constitution by reason of a denial of compensation to them for a compensatable loss.
The review and analysis of the authorities above in my view reveals the position to be that the loss which they now seek compensation for namely the full depreciation and the valve of the property caused by the motorway scheme is not a loss which was ever a compensatable loss, in the sense that the use of the land upon which the motorway is constructed could not be said to have been an actionable wrong so far as these claimants are concerned. Thus the limitation of compensation for injurious affection to that which is done solely on the land taken does not deprive them of compensation for something that they would otherwise have been entitled to compensation for but for the intervention of the relevant statute. Clearly they were entitled to be paid the value of the land and the expenses or losses resulting from the severance of the land taken from the retained land and because what was done on their taken land and the continuing user of it would but for the statute would also be a trespass they were entitled to damages for that. But beyond that at common-law they would have been entitled to no more. Thus in my view under section 63 of the Act as applied in this way, they are entitled to recover the full amount of such loss as is visited on them by the compulsory taking of their land but are not entitled to recover for the additional claimed loss because that loss would not have recoverable at common law in any event. Section 63 in my view matches the losses which but for the statute, would be recoverable at common law.
Therefore in my view the claimants have not demonstrated that they are denied compensation for a compensatable loss, and in that way that their rights under article 43 have been infringed.
Having reached that conclusion it is of course unnecessary for me to express any opinion on the respondents submission that such interference as there has been with the claimants constitutional rights is permissible as being proportionate.
I am of the view however that the submission that the rule limiting compensation as aforesaid, is consistent with article 40.1 of the Constitution and indeed were section 63 to be interpreted as permitting the recovery of the entire depreciation of the claimant’s property because of the motorway scheme, that would be an infringement of the guarantee of the equality before the law contained in that article, in the sense that neighbours of the claimants who could be affected in exactly the same way by the motorway scheme or indeed perhaps even worse, would have no right to have any compensation if no land of theirs was taken and would have to suffer any diminution in the value of their properties without compensation. There would in my view be a manifest and unjustifiable inequality in the treatment of those persons vis à vis the claimants, if section 63 to be interpreted in the manner contended for by the claimants.
In conclusion therefore I am of the opinion that the rule which limits compensation for injurious affection of retained land, to works and user on the taken lands, and thereby excluding injury due to user on other lands is in conformity with the Constitution, is sound in principle. I am also of opinion, that the cases in which this principle was laid down, were correctly decided and in my view ought to be followed in this jurisdiction.
The question of whether or not there should be compensation for injury to property caused by the non actionable use of public facilities such as motorways is clearly one of national policy and is a question which, in my opinion, is solely within the competence of the Oireachtas.
Finally although it may be unnecessary to say it, having regard to the foregoing; I decline to follow the reasoning in the judgments in the case of Marshall v. The Director, Department of Transport, [2001] HCA 37 (21st June, 2001).
I would answer “Yes” to the question posed in the case stated.
Article 26 of The Constitution & In the Matter of the Health, Re
[2005] IESC 7
DECISION of the Court pronounced on the 16th day of February, 2005, by Murray C.J.
This is the decision of the Supreme Court on the reference to it by the President of the Health (Amendment) (No. 2) Bill, 2004, pronounced pursuant to Article 26.2.1º of the Constitution.
The Reference
By order given under her hand and seal on the 22nd December, 2004, the President, after consultation with the Council of State, referred, in pursuance of the provisions of Article 26 of the Constitution, the said Bill to the Supreme Court for a decision on the question as to whether any provision of the Bill is repugnant to the Constitution or any provision thereof.
Proceedings on the Reference
Counsel were assigned by the Court to present arguments on the question referred to the Court by the President. Prior to the oral hearing counsel assigned by the Court presented written submissions to the Court, including submissions that certain provisions of the Bill were repugnant to the Constitution. Submissions in writing by and on behalf of the Attorney General were presented to the Court submitting that none of the provisions of the Bill were repugnant to the Constitution.
The oral hearing then took place before the Court on the 24th, 25th and 26th January, 2005. During the course of the hearing the Court heard oral submissions by counsel assigned by the Court and by counsel for the Attorney General.
The Legislation
The Bill in question is a short Bill and since the entire Bill is the subject of the question referred to the Court pursuant to Article 26 of the Constitution, it is appropriate to set out its terms in full:
“HEALTH (AMENDMENT) (NO. 2) BILL 2004
…
————————
AN ACT TO AMEND SECTION 53 OF THE HEALTH ACT 1970.
BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:
1.—Section 53 of the Health Act 1970 is amended—
(a) in subsection (2)—
(i) by substituting ‘‘Notwithstanding anything in the Health Acts 1947 to 2004 but subject to subsections (3), (4) and (9), the Minister shall for ‘‘The Minister may, and
(ii) in paragraph (a), by substituting ‘‘to whom the in-patient services are provided for ‘‘who are not persons with full eligibility, and
(b) by inserting the following after subsection (2):
‘‘(3) A charge imposed under regulations made under subsection (2) on or after the enactment of this subsection is not payable where the in-patient services concerned are provided to—
(a) a person under 18 years of age,
(b) a woman in respect of motherhood,
(c) a person detained involuntarily under the Mental Health Acts 1945 to 2001,
(d) a person who—
(i) is in a hospital for the care and treatment of patients with acute ailments (including any psychiatric ailment), and
(ii) requires medically acute care and treatment in respect of any such ailment,
or
(e) a person who pursuant to section 2 of the Health (Amendment) Act 1996, in the opinion of the chief executive officer of a health board, has contracted Hepatitis C directly or indirectly from the use of Human Immunoglobulin Anti-D or the receipt within the State of another blood product or a blood transfusion.
(4) The chief executive officer of a health board may reduce or waive a charge imposed on a person under regulations made on or after the enactment of this subsection if the chief executive officer is of the opinion that, having regard to the financial circumstances of that person (including whether or not that person has dependants), it is necessary to do so in order to avoid undue financial hardship in relation to that person.
(5) Subject to subsection (6), it is hereby declared that the imposition and payment of a relevant charge is, and always has been, lawful.
(6) Subsection (5) shall not apply in the case of a relevant charge which is the subject of civil proceedings—
(a) instituted on or before 14 December 2004, and
(b) for the recovery of the relevant charge.
(7) Subsection (5) is in addition to, and not in derogation of, any other ground (whether under an enactment or rule of law) which may be raised in any civil proceedings (including civil proceedings referred to in sub-section (6)) to debar the recovery of a relevant charge.
(8) For the avoidance of doubt, it is hereby declared that—
(a) regulations made under subsection (2) and in force immediately before the enactment of this subsection—
(i) shall continue in force on and after that commencement and may be amended or revoked, and
(ii) subject to paragraph (b), do not apply to persons with full eligibility,
and
(b) such regulations may be amended on or after that commencement to apply, in whole or in part, to persons with full eligibility.
(9) Where in-patient services have been provided to a person for—
(a) a period of not less than 30 days, or
(b) periods aggregating not less than 30 days within the previous 12 months,
then—
(c) a charge imposed under regulations made under subsection (2) on or after the enactment of this subsection for the further provision of any in-patient services to that person shall be charged at a weekly rate, and
(d) such weekly rate shall not exceed 80 per cent of the maximum of the weekly rate of the old age (non-contributory) pension within the meaning of the Social Welfare Acts.
(10) A period of 30 days referred to in subsection (9) begins to run immediately the person concerned is provided with in-patient services, and irrespective of whether during all or any part of that period the charge referred to in that subsection is not payable by virtue of the operation of subsections (3) or (4).
(11) Notwithstanding section 51, in this section—
‘in-patient services, in relation to any regulations made under subsection (2) on or after the enactment of this subsection, means the institutional services referred to in the definition of ‘in-patient services in section 51 only insofar as those institutional services consist of the maintenance of a person;
‘relevant charge means a charge—
(a) imposed (or purporting to be imposed) under regulations made (or purporting to be made) under subsection (2), and
(b) paid at any time before the enactment of this subsection..
2.—(1) This Act may be cited as the Health (Amendment)
(No. 2) Act 2004.
(2) The collective citation ‘‘the Health Acts 1947 to 2004 shall include this Act.”
Section 53 of the Act of 1970
As can be seen the Bill is limited to amending s. 53 of the Act of 1970. Section 53 of that Act provides as follows:
“53.—(1) Save as provided for under subsection (2) charges shall not be made for in-patient services made available under section 52.
(2) The Minister may, with the consent of the Minister for Finance, make regulations—
(a) providing for the imposition of charges for in-patient services in specified circumstances on persons who are not persons with full eligibility or on specified classes of such persons, and
(b) specifying the amounts of the charges or the limits to the amounts of the charges to be so made.”
Section 53(2) – (11) in consolidated form
The terms of the provisions of the Bill, since it is confined to amending and adding to s. 53 of the Act of 1970, can be more readily appreciated if s. 53(2) and the ensuing subsections are read in an amended and consolidated form which, at the risk of some repetition, would provide as follows:
“53.—(2) Notwithstanding anything in the Health Acts 1947 – 2004 but subject to subsections (3), (4) and (9) the Minister shall, with the consent of the Minister for Finance, make regulations –
(a) providing for the imposition of charges for in-patient services in specified circumstances on persons to whom the in-patient services are provided or on specified classes of such persons, and
(b) specifying the amounts of the charges or the limits to the amounts of the charges to be so made.
‘(3) A charge imposed under regulations made under subsection (2) on or after the enactment of this subsection is not payable where the in-patient services concerned are provided to—
(a) a person under 18 years of age,
(b) a woman in respect of motherhood,
(c) a person detained involuntarily under the Mental Health Acts 1945 to 2001,
(d) a person who—
(i) is in a hospital for the care and treatment of patients with acute ailments (including any psychiatric ailment), and
(ii) requires medically acute care and treatment in respect of any such ailment,
or
(e) a person who pursuant to section 2 of the Health (Amendment) Act 1996, in the opinion of the chief executive officer of a health board, has contracted Hepatitis C directly or indirectly from the use of Human Immunoglobulin Anti-D or the receipt within the State of another blood product or a blood transfusion.
(4) The chief executive officer of a health board may reduce or waive a charge imposed on a person under regulations made on or after the enactment of this subsection if the chief executive officer is of the opinion that, having regard to the financial circumstances of that person (including whether or not that person has dependants), it is necessary to do so in order to avoid undue financial hardship in relation to that person.
(5) Subject to subsection (6), it is hereby declared that the imposition and payment of a relevant charge is, and always has been, lawful.
(6) Subsection (5) shall not apply in the case of a relevant charge which is the subject of civil proceedings—
(a) instituted on or before 14 December 2004, and
(b) for the recovery of the relevant charge.
(7) Subsection (5) is in addition to, and not in derogation of, any other ground (whether under an enactment or rule of law) which may be raised in any civil proceedings (including civil proceedings referred to in sub-section (6)) to debar the recovery of a relevant charge.
(8) For the avoidance of doubt, it is hereby declared that—
(a) regulations made under subsection (2) and in force immediately before the enactment of this subsection—
(i) shall continue in force on and after that commencement and may be amended or revoked, and
(ii) subject to paragraph (b), do not apply to persons with full eligibility,
and
(b) such regulations may be amended on or after that commencement to apply, in whole or in part, to persons with full eligibility.
(9) Where in-patient services have been provided to a person for—
(a) a period of not less than 30 days, or
(b) periods aggregating not less than 30 days within the previous 12 months,
then—
(c) a charge imposed under regulations made under subsection (2) on or after the enactment of this subsection for the further provision of any in-patient services to that person shall be charged at a weekly rate, and
(d) such weekly rate shall not exceed 80 per cent of the maximum of the weekly rate of the old age (non-contributory) pension within the meaning of the Social Welfare Acts.
(10) A period of 30 days referred to in subsection (9) begins to run immediately the person concerned is provided with in-patient services, and irrespective of whether during all or any part of that period the charge referred to in that subsection is not payable by virtue of the operation of subsections (3) or (4).
(11) Notwithstanding section 51, in this section—
‘in-patient services, in relation to any regulations made under subsection (2) on or after the enactment of this subsection, means the institutional services referred to in the definition of ‘in-patient services in section 51 only insofar as those institutional services consist of the maintenance of a person;
‘relevant charge means a charge—
(a) imposed (or purporting to be imposed) under regulations made (or purporting to be made) under subsection (2), and
(b) paid at any time before the enactment of this subsection..
The Bill in General Terms
By way of introduction it may be said that the Bill is confined to the making of amendments to s. 53 of the Health Act, 1970. The subject matter of the Bill is in turn confined to the payment of certain charges by certain categories of persons, in most cases elderly persons of limited means, who will benefit in the future or have benefited in the past from being maintained in a hospital or home by a Health Board. In the former instance the relevant provisions operate prospectively and in the latter retrospectively.
There are two sections in the Bill. Section 1 contains the essence of the Bill and provides for an amendment to subsection 2 of s. 53 of the Health Act, 1970 and, by way of insertion, the addition to that section of nine new subsections. Section 2 of the Bill simply provides for the short title and the inclusion of the Bill in the collective citation “the Health Acts, 1947 – 2004” in respect of which no issue arises. Accordingly only the constitutionality of the amending provisions contained in s. 1 are in issue. The context and full implications of these provisions are fully examined subsequently in this judgment.
Prospective Effect
Section 1(a) of the Bill amends s. 53(2) of the Act of 1970 so as to require the Minister to make regulations for the imposition of charges in certain circumstances for in-patient services provided in the future insofar as they consist of the maintenance of a person in a home or hospital by a Health Board. Section 1(b) provides for the insertion after s. 53(2) of the Act of 1970 of certain new subsections which govern, inter alia, the category of persons on whom such charges may be imposed, the circumstances where such charges may be imposed and their maximum level, namely, 80% of the maximum of the weekly rate of the old age (non-contributory) pension.
The new power given to the Minister to impose charges and the provisions governing the use of that power concern only the imposition of a charge for the provision of the service in question in the future. In addition to these provisions there is a provision which confers on the Chief Executive Officer of a Health Board a discretion to reduce or waive a charge payable pursuant to such regulations where the full imposition of the charge would give rise to undue hardship in an individual case.
The provisions which would have prospective effect only, taking account of the amendments of the Bill, are s. 53, subsection (2) of the Act of 1970 as amended by the Bill and subsections (3), (4), (9), (10) and (11) (insofar as the latter subsection defines “in-patient services”) of that section as inserted by the Bill.
Retrospective Effect
The second object of the Bill is to declare as lawful, and as always having been lawful, certain charges for in-patient services which had been imposed, or purported to be imposed in the past on, and paid by, certain persons pursuant to regulations made (or purporting to be made) under subsection (2) of s. 53 of the Act of 1970 even though there has been admittedly no lawful authority for the imposition of such charges. This is the retrospective aspect of the Bill. It is a special feature of the retrospective provisions of the Bill that they seek to validate not only charges imposed without lawful authority but charges that were imposed for an in-patient service which the Oireachtas, in s. 53(1), had decreed should be provided free of any charge to those concerned.
The retrospective provisions of the Bill are subsections (5), (6), (7) and (11) (insofar as the last mentioned subsection defines “relevant charge”) of s. 35 of the Health Act, 1970, as inserted by s. 1(b) of the Bill.
Full consideration is given to the statutory context and effect of these retrospective provisions subsequently in this judgment where it addresses the constitutional issues to which those provisions give rise.
Since the terms of the Bill are best appreciated by reference to s. 53 of the Act of 1970 in its amended and consolidated form, for ease of reference the provisions of the Bill are generally referred to in this judgment, unless the context indicates otherwise, by reference to the particular subsection of s. 53 as amended or inserted by the Bill.
Presumption
The Court in considering this Bill applies the presumption of constitutionality in accordance with its decision under Article 26 in In Re The Criminal Law (Jurisdiction) Bill, 1975 [1977] IR 129.
Constitutionality of Provisions with Prospective Effect
The Court will first of all consider the constitutional issues which have arisen in relation to those provisions of the Bill which have prospective effect only. For this purpose the prospective provisions of the Bill are referred to in more detail.
The primary prospective provision is to be found in s. 1(a) of the Bill, which amends the provisions of s. 53(2) of the Health Act, 1970. As can be more readily seen from s. 53(2) of the Act of 1970 in its consolidated form, the Bill amends that subsection so as to require the Minister, with the consent of the Minister for Finance, to make regulations “providing for the imposition of charges for in-patient services” on persons who receive such services or unspecified classes of such persons. The Bill is mandatory in this regard in that it says the Minister “shall make” regulations. The Minister is also required to specify in the regulations the amounts of such charges or the limits to such amounts.
For these purposes “in-patient services” is defined in subsection (11) of s. 53 of the Health Act, 1970, as inserted by the Bill, as meaning, “the institutional services referred to in the definition of ‘in-patient services in s. 51 only insofar as those institutional services consist of the maintenance of a person;”
“The institutional services” referred to in s. 51 of the Health Act, 1970 are those provided for persons while maintained in a hospital, convalescent home or home for persons suffering from physical or mental disability or in accommodation ancillary thereto. “Institutional services” are defined, for this purpose, in s. 2 of the Health Act, 1947, as including:
(a) maintenance in an institution,
(b) diagnosis, advice and treatment at an institution,
(c) appliances and medicines and other preparations,
(d) the use of special apparatus at an institution.
As can be seen, the charges which the Minister may impose under the provisions of the Bill (which counsel for the Attorney General conveniently described as ‘maintenance charges) are payable by all persons in receipt of “in-patient services” insofar as the service received consists of the maintenance of the person.
While the 1970 Act draws a distinction, for the purpose of enjoying such services and in particular as to their liability for the payment of any charges, between persons having respectively “full eligibility” and “limited eligibility”, no such distinction is drawn for the purpose of liability to pay any charges imposed by virtue of regulations made by the Minister under this provision of the Bill, and it is not necessary to consider the distinction between these two categories in this context. (The distinction between “full eligibility” and “limited eligibility” is particularly pertinent to the retrospective effects of the Bill and this is fully considered later in the judgment.)
The Bill does, however, exclude certain categories of persons from liability to pay charges imposed under regulations made by the Minister under subsection 2. These are set out in subsection 3 of s. 53, as inserted by s. 1(b) of the Bill, and include such categories of persons who avail of such services as a woman in respect of motherhood, a person detained involuntarily under the Mental Health Acts and persons with acute ailments or requiring acute care and treatment. Subsection 9 of s. 53 as inserted by s. 1(b) of the Bill provides for a minimum period of stay before a person becomes liable to pay maintenance charges under the regulations and then goes on to provide that the charge imposed shall be charged at a weekly rate and that it shall not exceed 80% of the maximum weekly rate of the old age (non-contributory) pension within the meaning of the Social Welfare Acts.
The final relevant prospective provision of the Bill is to be found in subsection 4 of s. 53 as inserted by s. 1(b) of the Bill whereby a Chief Executive Officer of a Health Board may reduce or waive a charge imposed under the regulations after the enactment of the Bill, if he or she “… is of the opinion that having regard to the financial circumstances of that person (including whether or not that person has dependants), it is necessary to do so in order to avoid undue financial hardship in relation to that person”. In short, the prospective provisions provide for the payment of maintenance charges by persons who are maintained in a hospital or home by a Health Board as long-stay patients, subject to the specified excepted categories. This liability may be alleviated by the discretionary power of the Chief Executive in individual cases of undue hardship.
Submissions of counsel assigned by the Court
Counsel assigned by the Court made a number of submissions impugning the compatibility with the Constitution of the foregoing provisions. The first issue concerned the imposition of any charges per se for maintenance on persons who receive such a service.
Counsel assigned by the Court firstly contended that if their arguments as to the existence of a constitutional right to care and maintenance by a Health Board of persons who are unable to look after themselves independently prevails then it would be unconstitutional to require those persons to pay any charge for the provision of that service irrespective of the means of those persons or their ability to pay for their maintenance. This argument was followed by the alternative proposition relied upon by counsel, namely, that in any event the provisions requiring the imposition of charges for such services should be considered repugnant to the Constitution in that they would unduly restrict a constitutional right of access to them by virtue of causing undue hardship to persons of limited means.
In their general argument on constitutionality counsel submitted that the provisions of the Bill which require the making of regulations to ensure the future imposition of charges on persons for in-patient services consisting of maintenance are repugnant to Article 40.3.1 and 2 of the Constitution. Although the Minister would be precluded by s. 53(3) (as inserted by s. 1 of the Bill) from imposing charges on certain categories of persons, the Bill requires him to impose charges for maintenance on all other persons receiving such services pursuant to s. 52 of the Health Act, 1970. These, it was submitted, are by definition, largely persons facing very considerable financial hardship and invariably include the elderly, and persons who suffer from physical or mental disability. It was submitted that the Constitution, and specifically the right to life and the right to bodily integrity of such persons as derived from Article 40.3.1º and 2º, imposes an obligation upon the State to provide at least a basic level of in-patient facilities to persons in need of care and maintenance who cannot provide for it themselves. It was also submitted that any charge on persons who are of such modest means as to qualify for the old age (non-contributory) pension, or to come within the definition of full eligibility pursuant to the Health Acts, would of itself be unconstitutional. In short, it was submitted, the class of persons thus affected evidently embraces the elderly, and those disabled by physical or mental conditions such as to require residential care. Any charge would be an undue financial burden on such persons and therefore would constitute a failure to vindicate their right to life and also their constitutional rights to bodily integrity on the one hand and their dignity as human persons on the other. Alternatively, it was argued that the charges actually provided for in s. 53(9) (as inserted by s. 1(b) of the Bill) would in any event cause undue hardship on the persons concerned so as to be in breach of their constitutional rights of the kind referred to.
In their submissions counsel assigned by the Court sought to derive from the right to life or the right to personal dignity as protected by Article 40.3.1 and 2 of the Constitution a constitutional right for those who are entitled to the services provided pursuant to s. 52 of the 1970 Act to maintenance in a home without the imposition of any charge or alternatively any unreasonable charge.
Article 40.3.1 states:
“3.1 The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2. The State shall, in particular, by its laws, protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen”
In addition counsel assigned by the Court relied, in their submissions, on a range of judicial dicta in a number of cases and in particular that of Kenny J., in his judgment in the High Court, in Ryan –v- Attorney General [1965] IR 294, at 314, where he quoted as follows from a passage in the Papal Encyclical, “Peace on Earth”:
“Every man has the right to life, to bodily integrity and to the means which are necessary and suitable for the proper development of life; these are primarily food, clothing, shelter, rest, medical care, and finally the necessary social services.”
Other case-law relied upon included McGee –v- Attorney General [1974] IR 284, OBrien –v- Wicklow UDC, Unreported, The High Court, Costello J., 10th June, 1994, F.N. –v- Minister for Education [1995] 1 IR 409 and In Re A Ward of Court (No. 2) [1996] 2 IR 79.
Counsel assigned by the Court also submitted that the doctrine of the separation of powers according to which it was an exclusive function of the Oireachtas to determine the allocation of budgetary resources according to public policy priorities rather than the courts should not be considered as inhibiting the Court from finding the proposed imposition of charges as unconstitutional. It was submitted that the duty of the State to respect constitutional rights, as enforced by the courts, will often have, as a consequence, the expenditure of necessary funds to fulfil that obligation. The State cannot be spared from its duty to respect the rights in question on financial grounds alone.
Submissions of counsel for the Attorney General
Counsel for the Attorney General submitted that the extent of the States constitutional obligations did not go so far as to involve a constitutional obligation to maintain elderly or other long-stay patients. This was a matter to be dealt with by statute in accordance with public social policy. In support of their submissions counsel for the Attorney General also relied on judicial dicta in a range of cases including that of Keane C.J. in T.D. –v- Minister for Education [2001] 4 IR 259 where he called in question the formulation adopted by Kenny J. in Ryan –v- Attorney General [1965] IR 294] as to whether is was “an altogether satisfactory guide to the identification of such rights”. Counsel for the Attorney General also cited statements by the late Professor John Kelly to the same effect (Fundamental Rights in Irish Law and Constitution, Dublin, 1967, 44, 45). Counsel for the Attorney General also made reference to judicial dicta in T.D. –v- Minister for Education (cited above), Attorney General –v- Hamilton (No. 1) [1993] 2 IR 250 and Sinnott –v- Minister for Education [2001] 2 IR 545.
In the alternative, it was argued on behalf of the Attorney General that even if the persons concerned enjoyed the rights asserted by counsel assigned by the Court there can be no constitutional objection to a charge which is subject to an upper limit and which represents only a portion of the actual costs to the State of maintaining such patients. In addition it was submitted that the doctrine of the separation of powers, as accepted in the jurisprudence of this Court, recognised the constitutional competence of the Oireachtas to determine the allocation of resources in accordance with social and economic policies and that the exercise of its competence in this instance was not such as to infringe or subject to unjust attack any constitutional rights of those affected by these provisions of the Bill.
Conclusion on this issue
The extent to which care and maintenance is provided to persons affected by the Bill has not been put in issue. This is inevitable since the Bill does not purport to address that subject matter. What the Bill seeks to do is to lay down the terms, by way of the imposition of charges, upon which the services in question can be availed of. That is why the constitutional challenge presented by counsel assigned by the Court focuses, as they put it, on the ‘principle of charging.
In a discrete case in particular circumstances an issue may well arise as to the extent to which the normal discretion of the Oireachtas in the distribution or spending of public monies could be constrained by a constitutional obligation to provide shelter and maintenance for those with exceptional needs. The Court does not consider it necessary to examine such an issue in the circumstances which arise from an examination of the Bill referred to it. Even assuming there is such a constitutional right to maintenance as advanced by counsel the question actually raised is whether the charges for which the Bill provides could be considered an impermissible restriction of any such right.
Subsection 9 of s. 53 of the Act of 1970, as inserted by s. 1(b) of the Bill, provides for the imposition of a charge at a weekly rate which shall not exceed 80% of the maximum of the weekly rate of the old age (non-contributory) pension within the meaning of the Social Welfare Acts.
Furthermore, subsection (4) of s. 53, as inserted by the Bill, provides that the Chief Executive Officer of a Health Board may reduce or waive a charge imposed on a person under the regulations if he or she is of the opinion that having regard to the financial circumstances of that person (including whether or not that person has dependents), it is necessary to do so in order to avoid undue financial hardship in relation to that person.
The first argument of counsel assigned by the Court was that persons entitled to in-patient services pursuant to s. 52(1) of the Act of 1970 had a constitutional right to receive such services, including any maintenance elements involved, free, irrespective of the means of such persons. In Sinnott –v- Minister for Education [2001] 2 IR 545, the Court had occasion to point out the unique feature of Article 42 in requiring the State to “provide for free primary education”. In using those terms the Constitution made free education an express characteristic of the right to primary education so that no charges can be imposed for it. It is not contended that there is any equivalent provision of the Constitution applying to the rights asserted by counsel. Persons who avail of in-patient services pursuant to s. 52 of the Act of 1970 and who have the means to pay for maintenance charges related to those services are not denied access to them. The Court does not consider that it could be an inherent characteristic of any right to such services that they be provided free regardless of the means of those receiving them.
The alternative argument of counsel assigned by the Court was that the charges actually provided for in the Bill would cause undue hardship to persons of limited means who have, for a range of reasons, a special need for maintenance by a Health Board in receiving in-patient services.
It is not in contention that the maximum proposed charge would be but a fraction of the total cost of maintenance of a person concerned. However, the real question is whether the charges as envisaged could be said to infringe or unduly restrict the constitutional rights asserted.
Although the Bill makes it mandatory for the Minister to impose charges, his discretion would appear to extend from a nominal charge to the maximum charge of 80% of the maximum old age (non-contributory) pension. It was clearly the intent of the Oireachtas that the power to impose such charges should not result generally in undue hardship to the classes of persons to whom they applied. That is reflected in the provision which grants a Chief Executive Officer the power to remit a charge in a case of individual undue hardship. Such a provision is only consistent with an intent that the charges themselves should not cause undue hardship as a general consequence for those persons who have to pay them. That is a policy aspect of the Bill.
It seems to the Court that it cannot be gainsaid, having regard to its well established jurisprudence, that it is for the Oireachtas in the first instance to determine the means and policies by which rights should be respected or vindicated. Counsel assigned by the Court are correct in submitting that the doctrine of the separation of powers, involving as it does respect for the powers of the various organs of State and specifically the power of the Oireachtas to make decisions on the allocation of resources, cannot in itself be a justification for the failure of the State to protect or vindicate a constitutional right. This of course begs the question as to whether the provisions in question involve such a failure.
In this instance the Oireachtas has been careful to insert into the Bill a cap on the maximum charge which the Minister can impose, as referred to above. In doing so it is clear that it sought to avoid causing undue hardship generally to persons who avail of the in-patient services. No doubt it could be said that the State could or should have been more generous, or less so with regard to persons of significant means, but that is the kind of debate which lies classically within the policy arena and is not a question of law. All the Court is concerned with is whether the charges are such that they would so restrict access to the services in question by persons of limited means as to constitute an infringement or denial of the rights asserted by counsel. In reaching its conclusion on this question the Court must also take into account the fact that such persons who avail of in-patient services involving maintenance as referred to in the Bill would otherwise have had to maintain themselves out of their own means when living outside the care of the Health Board. Furthermore, there is nothing before the Court from which it could conclude that the judgment of the Oireachtas that a charge capped at the level of 80% of the maximum of the weekly old age (non-contributory) pension would generally cause undue hardship or be an undue denial of access to the services in question. Certainly there may be individual cases where, due to personal circumstances, the charge concerned would involve undue hardship. But, as previously outlined, the Oireachtas has put in place a provision in the Bill (subsection 4 as inserted in s. 53) expressly providing for an administrative mechanism for the remission in whole or in part of such a charge by a Chief Executive Officer in order to avoid undue hardship.
Conclusion
Accordingly the Court concludes that a requirement to pay charges of the nature provided for in the Bill could not be considered as an infringement of the rights asserted by counsel.
Delegated Legislation
Counsel assigned by the Court raised two matters which they submitted constituted the delegation of law-making powers in a manner impermissible under the Constitution. These are the extent of the power conferred on the Minister to make regulations and the ambit of the discretion conferred on the Chief Executive Officer of a Health Board to mitigate charges payable under the regulations in individual cases. The judgment will summarise the respective submissions of counsel on each point before setting out the Courts conclusions.
The Power to make Regulations
Counsel assigned by the Court submitted that s. 53(2) of the Act of 1970, as amended by the Bill, is repugnant to the Constitution because the Oireachtas failed to ensure that there were sufficient statutory guidelines, by way of principles and policies, contained in the Bill which could authorise the Minister to impose charges by way of delegated legislation. The subsection conferred too broad a discretion on the Minister and in the absence of such principles and policies constituted an impermissible delegation of law-making powers which are reserved, under the Constitution, to the Oireachtas. Counsel principally relied on Article 15.2.1 of the Constitution and the interpretation given to that provision by this Court in Cityview Press Ltd –v- An Chomhairle Oiliúna [1980] IR 381.
Article 15.2.1 provides:
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas; no other legislative authority has power to make laws for the State.”
In Cityview Press, OHiggins C.J. observed as follows (p. 398):
“The giving of powers to a designated Minister or subordinate body to make regulations or orders under a particular statute has been a feature of legislation for many years. The practice has obvious attractions in view of the complex, intricate and ever-changing situations which confront both the Legislature and the Executive in a modern State … Nevertheless, the ultimate responsibility rests with the Courts to ensure that constitutional safeguards remain, and that the exclusive authority of the National Parliament in the field of law-making is not eroded by a delegation of power which is neither contemplated nor permitted by the Constitution. In discharging that responsibility, the Courts will have regard to where and by what authority the law in question purports to have been made. In the view of this Court, the test is whether that which is challenged as an unauthorised delegation of parliamentary power is more than a mere giving effect to principles and policies which are contained in the statute itself. If it be, then it is not authorised; for such would constitute a purported exercise of legislative power by an authority which is not permitted to do so under the Constitution. On the other hand, if it be within the permitted limits – if the law is laid down in the statute and details only are filled in or completed by the designated Minister or subordinate body – there is no unauthorised delegation of legislative power.”
Counsel also referred to the decisions of this Court in Laurentiu –v- Minister for Justice, Equality and Law Reform & Anor [1999] 4 IR 26 and Leontjava –v- D.P.P. & Ors, Supreme Court, Unreported, 23rd June, 2004. It was submitted that
s. 53(2) of the Act of 1970 as amended by the Bill patently fails to provide any form of guidance to the Minister as to the circumstances in which the charges should be imposed, or what the level of those charges should be. It was acknowledged that the Ministers power was circumscribed by the exclusion from such charges of certain categories of persons referred to in s. 53(3), as inserted by the Bill, and the imposition of a maximum level of charge as prescribed by the new s. 53(9). It was submitted that subject to these limitations the Minister is nonetheless completely at large as to the circumstances in which the charges are imposed.
Counsel for the Attorney General also relied on the same case-law and submitted that the Bill clearly articulated detailed principles and policies which amply satisfied the requirements of Article 15.2.1 in accordance with the test laid down in Cityview Press. Counsel for the Attorney General pointed out that s. 53, as amended by the Bill, sets out the circumstances in which the charge can be levied; the nature of the charge; the maximum amount of the charge; and the persons who are entirely exempt from the charge.
The Discretion of a Chief Executive
Counsel assigned by the Court also relied upon Article 15.2.1 and the judgment of this Court in Cityview Press as the basis for impugning the discretion conferred on a Chief Executive Officer of a Health Board pursuant to s. 53(4) of the Act of 1970 as inserted by the Bill whereby such an officer may reduce or waive a charge imposed on a person if he is of the opinion that, having regard to the financial circumstances of that person, it is necessary to do so in order to avoid undue financial hardship. It was submitted that the Oireachtas had failed to properly define in the Bill the scope of this power delegated to the Chief Executive Officer and failed to define the financial hardship situations which might warrant the exercise of his discretion to waive a charge. Accordingly the power delegated to the Chief Executive was impermissible and contrary to Article 15.2.1 of the Constitution.
In this regard counsel for the Attorney General submitted that the power conferred on the Chief Executive Officer was not a law-making power and therefore Article 15.2.1 had no bearing on the matter. The power conferred on the Chief Executive Officer was not one which required him to make decisions regarding the level of charges generally but simply to exercise a discretion in individual cases in order to avoid undue financial hardship. In any event, it was submitted that the criteria “undue financial hardship” was sufficient to meet the test laid down in Cityview Press.
Conclusion on these issues
The Court does not find that the foregoing submissions of counsel assigned by the Court are well-founded. First, as regards the power delegated to the Minister to make regulations imposing charges, it should be noted that the Oireachtas has limited the imposition of the charges to “in-patient services” only insofar as they consist of the maintenance of a person (s. 53(11)), which only becomes payable when the in-patient service has been provided to a person for “(a) a period of not less than 30 days, or (b) periods aggregating not less than 30 days within the previous 12 months”. This is further complemented by s. 53 (10) as inserted by the Bill, which provides that “a period of 30 days referred to in subsection (9) begins to run immediately the person concerned is provided with in-patient services, and irrespective of whether during all or any part of that period the charge referred to in that subsection is not payable by virtue of the operation of subsections (3) or (4)”. Moreover, the Oireachtas expressly excluded certain categories of persons in receipt of such services in the future from any liability for the payment of charges (s. 53(3) as inserted by the Bill). The Bill also specifies the manner in which the charge is to become payable, namely, as a weekly charge. More significantly, subsection (9)(d) of s. 53, as inserted by the Bill, limits the maximum weekly charge to 80% of the maximum of the weekly rate of the old age (non-contributory) pension. This in turn must be considered in the context that the Bill also provides for any such charge to be reduced or waived by the Chief Executive Officer should the imposition of a charge cause undue hardship in an individual case.
It is evident that one of the underlying policies of the charging provisions is that persons who are provided with maintenance in a home under the Health Acts are expected to make a contribution towards that maintenance from their own means, even if those means are of a limited nature such as the old age (non-contributory) pension. Persons being provided with long-stay maintenance in a hospital or a home would otherwise have been responsible for their day-to-day maintenance when living elsewhere on their own means. In authorising the Minister to impose charges on the specified category of persons the Oireachtas clearly intended that the resources of Health Boards would benefit so as to better enable them to provide the services in question while at the same time seeking to avoid doing so in a manner which would cause undue hardship. The discretion left to the Minister is limited as indicated by the matters referred to above but in particular by the maximum level of weekly charge which he can impose and by the policy that the charges should not in general cause undue hardship.
The level at which charges can be fixed by the Minister is narrow in scope ranging from a nominal charge to 80% of the pension referred to. It was clearly the intention of the Oireachtas that any charges would not cause undue hardship generally or in individual cases and no doubt this is why it fixed the maximum charge at 80% of the pension on a judgment that this in itself should not cause undue hardship. On the other hand, if, hypothetically, the real value of the said pension was to fall over time because, for example, its level failed to keep pace with the rate of inflation, the Minister would be bound to avoid imposing charges, even within the scope open to him, that caused undue hardship generally. That is, at least implicitly, the intention of the Bill. The Minister in fixing charges within the limited scope granted to him must take into account the twin policies of the Act of making resources available to the Health Board from those who can pay the charges for the service provided without undue hardship and avoiding any general effect of undue hardship (as distinct from undue hardship that may arise because of the special circumstances of an individual).
In these circumstances the Court is satisfied that the imposition of charges by the Minister pursuant to the section in question would be no more than the implementation of the principles and policies contained in the Act and the power delegated to him to make the regulations is compatible with the Constitution.
As regards the criticism made of the discretionary power conferred on the Chief Executive Officer to waive or reduce a charge in a case of individual hardship, the Court considers that counsel for the Attorney General were correct in pointing out that that does not constitute the exercise of a delegated power to legislate but rather is the exercise of a administrative discretion to address the particular circumstances of an individual case. When public officials are charged with administering a statutory scheme it may be difficult, if not impossible, for the Oireachtas to prescribe in legislation for every special circumstance of individuals who find themselves on the margins of such a scheme. In this instance the task of the administrator is to avoid undue hardship in individual cases in the general application of the scheme. That is simply an administrative function. A subsidiary argument of counsel assigned by the Court was that judicial review of the decision of a Chief Executive Officer in the exercise of such a discretion would not be an adequate remedy to a person who felt they had been wrongly refused a waiver or reduction of a charge. The Court does not accept this argument. The criterion (undue hardship) according to which the Chief Executive Officer should exercise his or her discretion is adequately set out in the Act and there is no reason to consider that an arbitrary decision or other unlawful misuse of his or her powers by a Chief Executive Officer could not be subject to judicial review in the ordinary way.
Accordingly the Court is satisfied that s. 1(a) of the Bill amending subsection 2 of s. 53 of the Health Act, 1970 and the provisions of s. 1(b) of the Bill which insert subsections (3), (4), (9), (10) and (11) (insofar as the latter subsection defines “in-patient services”) in s. 53 of the Act of 1970 are compatible with the Constitution.
Constitutional Issues concerning the Retrospective Provisions
Legislative Background
The provisions of the Bill which the Court now proposes to consider are those which have retrospective effect on the rights of certain persons under the provisions of the Health Act, 1970. For the purpose of considering the issues which arise concerning these provisions, the Bill has to be seen against the background of certain key provisions of the Health Act, 1970, especially Part IV. As already noted the amendments it proposes relate exclusively to s. 53. That section concerns only “in-patient services”. It is therefore relevant to recall, in the context of these retrospective provisions, the nature of those services, the obligations of the Health Boards to provide them, the persons to whom they are to be provided and the provisions regarding charging for their provision.
Section 51 of the Act of 1970 defines “in-patient services” as meaning “institutional services provided for persons while maintained in a hospital, convalescent home or home for persons suffering from physical or mental disability or in accommodation ancillary thereto”. “Institutional services” refers to that term as defined in s. 2 of the Health Act, 1947, as including:
“ (a) maintenance in an institution,
(b) diagnosis, advice and treatment at an institution,
(c) appliances and medicines and other preparations,
(d) the use of special apparatus at an institution.”
The Act of 1970 draws a distinction, for the purpose of enjoying such services, between persons having respectively “full eligibility” and “limited eligibility”. Persons in the former category are commonly described under the non-statutory name of medical-card holders. According to s. 45(1) of the Act of 1970 they are “adult persons unable without undue hardship to arrange general practitioner medical and surgical services for themselves and their dependants” and the dependants of such persons. Section 46 defines persons with limited eligibility by reference to means and is not relevant to the issues referred to the Court. The Court has been informed that no regulations have been made pursuant to s. 45(3) of the Act of 1970 and that the determination of who is entitled to “full eligibility” – a medical card – is administered by a system of departmental circulars, with the relevant chief executive officer of each health board making the decisions.
These are the persons in respect of whom Part IV of the Act of 1970 imposed upon Health Boards obligations to provide services. Health Boards are obliged, pursuant to s. 52 of the Act of 1970 to “make available in-patient services for persons with full eligibility and persons with limited eligibility”.
However, s. 53(1) of the Act states that, subject to subsection (2), which permits such charges in respect of persons with limited eligibility, “charges shall not be made for in-patient services made available under s. 52”. Regulations have been made from time to time pursuant to s. 53(2). Clearly, they were not made and could not have been made in respect of persons having full eligibility.
The interpretation of these and related provisions came before Finlay P., as he then was, in 1975 in In Re Maud McInerney, a Ward of Court [1976-1977] ILRM 229. It appears clear from the context of this case that, as was suggested by counsel during the hearing, between the passing of the Act of 1970 and the decision in the McInerney case, the practice had been to charge patients in most institutions on the basis that they were in receipt of “institutional assistance”, within the meaning of s. 54 of the Health Act, 1953, a term which meant “shelter and maintenance in a county home or a similar institution”. The nub of the McInerney decision was that the ward was in receipt of more than mere shelter and maintenance, and that there was an element of medical care involved. Relying on both the fact that the place of the provision of the services, as envisaged by s. 51 of the Act of 1970 , is a hospital or one of the other essentially health-care institutions mentioned in that definition and that the ward would not come within the alternative section (s. 54 of the Health Act, 1953 regarding “institutional assistance”) unless she was in receipt of shelter and maintenance and nothing else, the learned President interpreted s. 53 of the Act of 1970 as applying wherever the patient is in receipt of any medical care over and above pure maintenance. This decision was upheld by this Court on 20th December, 1976.
It was common case in the submissions on the reference that the relevant provisions of the Act of 1970 as interpreted in McInerney considerably narrowed the grounds on which a charge could be raised for institutional assistance. In reality, geriatric or severely disabled patients are in need of both maintenance and medical services.
The sum total of these provisions is that, by the legislation of 1970, at least following its interpretation in McInerney, the Oireachtas required and has continued to require Health Boards, at all times prior to the passing of the Bill, to make in-patient services available without charge to all persons “suffering from physical or mental disability”. While the individual circumstances of patients will vary enormously in terms of age and physical and mental capacity, it is obvious that, by enacting the Act of 1970, the Oireachtas was concerned to ensure the provision of humane care for a category of persons who are in all or almost all cases those members of our society who, by reason of age, or of physical or mental infirmity, are unable to live independently. They are people who need care. Even without the benefit of statistical or other evidence, the Court can say that the great majority of these persons are likely to be advanced in years. Many will be sufferers from mental disability. While some will have the support of family and friends, many will be alone and without social or family support. Most materially, in a great number of cases, the patients will have been entitled to and in receipt of the non-contributory social welfare pension.
This was the position in law and in fact following the enactment of the Act of 1970. The Court has been informed that on 6th August, 1976, a date later than the High Court decision and earlier than the Supreme Court decision in McInerney, the Department of Health sent a circular letter to all Health Boards. The circular informed the Boards of the terms of the Health (Charges for in-patient services) Regulations, 1976. It pointed out that, by virtue of s. 53(2)(a) of the Act of 1970, these regulations did not relate to persons with full eligibility. It went on to state:
“However, in this respect, the precise definition of a person with full eligibility in s. 45(1)(a) of the Act should be carefully noted. A person who, while he was providing for himself in his own home, was deemed to have full eligibility could be regarded as not coming within that definition when he is being maintained in an institution where the services being provided include medical and surgical services of a general practitioner kind, with consequential liability for charges under the regulations.”
It is accepted that, following Circular 7/76, Health Boards generally continued to charge patients with full eligibility for in-patient services. This may have involved the withdrawal of the relevant medical cards. The Court has been informed that the State was advised in 2004 that charges were imposed on a flawed legal basis, going back as far as 1976, on persons with full eligibility. The Attorney General has expressly accepted in his written submissions that since 1976, “there was no legal basis for imposing such charges on persons with full eligibility”. The Court must assume, therefore, given the purpose of the Bill, that charges were made in contravention of the terms of s. 53(1) of the Act of 1970.
At all events, s. 1 of the Health (Miscellaneous Provisions) Act, 2001 amended s. 45 of the Act of 1970 with the effect of placing beyond doubt any question of the legality of charging for the relevant services. That section inserted the following subsection into s. 45:
“(5A) A person who is not less than 70 years of age and is ordinarily resident in the State shall have full eligibility for the services under this Part and, notwithstanding subsection (6), references in this Part to persons with full eligibility shall be construed as including references to such persons.”
As was accepted by the Attorney General, from the date on which that section came into effect on July 1st, 2001, (see Health (Miscellaneous Provisions) Act, 2001, (Commencement) Order, 2001, S.I. 305 of 2001), there was no possible room for doubt that Health Boards were not entitled to impose any charges for in-patient services on persons aged seventy or over. While many in that category would not previously have qualified for full eligibility, a significant number obviously would. Thus, from the entry into force of that provision, all persons aged seventy or more were automatically and by that fact alone deemed to be fully eligible. Thereafter any charge imposed on such a person was indisputably imposed in direct contravention of s. 53(1) of the Act of 1970. Yet, it has been confirmed to the Court that the practice continued. It is, of course, the admitted purpose of the Bill to render lawful what was thus unlawful.
Patients Claims for Restitution
While the unlawful or ultra vires collection of charges from patients with full eligibility thus falls into two periods, it is not necessary for the Court, in dealing with this Reference, to maintain any distinction between them. It will assume, as is implicit in the Bill, that charges were unlawfully imposed and paid for a period as far back as 1976. The charges will, for ease of reference, be described as “unlawful charges”.
Counsel assigned by the Court have submitted that, pursuant to the modern law of restitution, patients are entitled to recover charges for in-patient services imposed by Health Boards without lawful authority and contrary to the express provisions of the Health Acts. Reference was made, in particular, to The Right Honourable The Lord Mayor, Aldermen and Burgesses of Dublin –v- Building and Allied Trades Union (hereinafter the Dublin Corporation case) [1996] 1 IR 468 and ORourke –v- Revenue Commissioners [1996] 2 IR 1.
Although it is not seriously disputed by the Attorney General that such payments are normally recoverable, it is necessary to consider the nature of any such claim before examining the effect upon them of the Bill and the applicable provisions of the Constitution.
In the Dublin Corporation case, compensation had been paid to the defendants for property compulsorily acquired by the plaintiff pursuant to statutory powers. Because compensation had been assessed at a figure relating to reinstatement cost rather than market value and the defendants had not spent the compensation monies on reinstatement, the plaintiff sought to recover those sums, claiming that the defendants had been unjustly enriched. Keane J., on behalf of a unanimous Supreme Court, while rejecting the plaintiffs claim, accepted that “under our law, a person can in certain circumstances be obliged to effect restitution of money or other property to another where it would be unjust for him to retain the property.” He continued:
“The modern authorities in this and other common law jurisdictions, of which Murphy –v- The Attorney General [1982] IR 241 is a leading Irish example have demonstrated that unjust enrichment exists as a distinctive legal concept, separate from both contract and tort, which in the words of Deane J. in the High Court of Australia in Pavey & Matthews Proprietary Ltd. –v- Paul (1987) 162 CLR 221:–
“. . . explains why the law recognises, in a variety of distinct categories of cases, an obligation on the part of the defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary process of legal reasoning, of the question of whether the law should, in justice, recognise the obligation in a new and developing category of case.”
In the same year, in ORourke –v- Revenue Commissioners, the same judge, sitting as a judge of the High Court on an appeal from the Circuit Court, dealt with a claim by a public servant for interest on monies repaid to him by the Revenue Commissioners, which, as had been discovered, were incorrectly deducted from his salary.
Keane J. distinguished between a case where similar payments were exacted from a taxpayer who paid under protest and the case before him, where the taxpayer acquiesced without protest. Accordingly, he did not consider that the payments had been required from him colore officii as in the case of Dolan –v- Neligan [1967] IR 247, which applied to the first situation. He reiterated that, in the instant case,
“The money was clearly paid under a mistake of law, without any protest by the plaintiff and in circumstances where there was no specific element of compulsion or duress”
Having reviewed the law on the issue he concluded:
“The tax overpaid by the plaintiff was recoverable as a matter of right.”
This Court is satisfied that our law recognizes a cause of action for restitution of money paid without lawful authority to a public authority. Material elements may be whether the money was demanded colore officii, whether it was paid under a mistake of law, whether the parties were of equal standing and resources, whether the money was paid under protest and whether it was received in good faith. The decision of this Court in Rogers –v- Louth County Council [1981] IR 265 may be relevant. It is not appropriate, in the context of the present reference, to expound the precise contours of that cause of action, in the absence of evidence of particular cases. It will be apparent that a large number of patients who paid unlawful charges enjoy such a cause of action.
For the purposes of applying these principles to the cases of the patients concerned with the effects of the Bill, the Court naturally does not have the benefit of evidence regarding the actual circumstances in which individual patients paid charges levied by Health Boards without lawful authority. It is in a position, nonetheless, to draw sufficient inferences from the legislative history and the common experience of all members of our society. While we were informed that some patients protested at having to pay charges, it seems highly unlikely that, having regard to the category of persons involved, this happened to any significant extent. The patients in question necessarily belong to the most vulnerable section of society. They are, for the most part old or very old; they are, in many cases, mentally or physically disabled; they are also, very largely, in poor financial circumstances. They are most unlikely to have been aware of the provisions of the Health Acts or their rights to services or the terms on which they are provided.
Both the relevant organs of State and the Health Boards, on the other hand, were fully informed of the terms of the Health Acts, including the applicable provisions for charging for services. The charges must be regarded as having been imposed as a result of considered decisions of responsible public officials in full consciousness of those provisions.
In any event it is clear that the Oireachtas has acknowledged the existence of such claims since the avowed purpose of the Bill is to deem the charges in question lawful so as to save the exchequer the cost of having to meet legitimate claims for their recovery. In short the retrospective provisions of the Bill are premised on the existence of a quantity of such valid claims.
The Court considers that patients with full eligibility from whom charges for in-patient services were demanded and who paid them were entitled, in the absence of some strong contrary indication, to recover those charges as of right, subject, of course, to any of the defences normally available in civil proceedings. That right was that species of personal property known as a chose in action.
The Retrospective Provisions
Against this background, it is necessary to recall the essence of the retrospective provisions of the Bill. The key provision of s. 1(b) of the Bill is the amendment of s. 53 of the Act of 1970 by the insertion of a new subsection (5) whereby “it is declared that the imposition of a relevant charge is, and always has been lawful”. This provision applies only to charges paid prior to the enactment of the Bill, since subsection (11) defines “relevant charge” as a charge:
(a) imposed or purporting to be imposed under regulations made (or purporting to be made) under subsection (2), and
(b) paid at any time before the enactment of this subsection.”
It will be recalled that the subsection of the Act of 1970, there referred to, empowered the Minister to make regulations providing for the imposition of charges only in respect of persons with limited eligibility. Two points need to be made about the drafting objective of these provisions. Firstly, it would not have made any sense to say that charges imposed in the past on persons with full eligibility were, at the time, lawful. That would have been inconsistent with the direct prohibition in s. 53(1) of the Act of 1970 and, in effect, an attempt to rewrite the past. Secondly, therefore, subsection (5), (which by virtue of subsection (6) does not apply to proceedings commenced before14th December, 2004) read with subsection (11), proceeds on the basis that such charges as were imposed on such persons were received under the guise of regulations adopted under s. 53(2), i.e., on persons with limited eligibility. This was based on the apparent rationale of Circular 7/76, namely that patients with full eligibility somehow ceased to belong to that category once they were resident in an institution and in receipt of in-patient services. But, as has already been observed in this judgment, counsel for the Attorney General has accepted that charges were imposed unlawfully from and after 1976. Moreover, the Bill purports to apply to charges imposed on persons aged seventy and over, who became automatically persons with full eligibility following the entry into force of the Act of 2001.
In effect what subsection (5), in conjunction with subsections (6) and (11), purport to do, as and from the entry into force of the Bill, is to deem the combined imposition and payment of the unlawful charges concerned to be lawful, and always to have been lawful, for the purpose of enabling the State to successfully resist any claim brought after the 14th December, 2004 insofar as such a claim is for the recovery of the charges in question on the grounds that they had, at least from 1976, been unlawfully imposed.
It is, in any event, not contested by the Attorney General that the effect of the subsection is to prevent recovery of such charges paid by any persons who had full eligibility and from whom they were demanded without lawful authority at any time since the passing of the Act of 1970.
Subsection (5), being subject to subsection (6), does not “apply in the case of a relevant charge which is the subject of civil proceedings—
(a) instituted on or before 14 December 2004, and
(b) for recovery of the relevant charge.”
14th December, 2004 was the date of publication of the Bill. The Bill does not, therefore, claim to apply to any proceedings commenced before that date. The obvious purpose of the provision is to avoid any unconstitutionality which would arise from legislative interference with existing litigation, on the principle laid down by the judgment of the former Supreme Court in Buckley & Ors –v- Attorney General [Sinn Féin Funds] [1950] IR 67. It is also important to note that, although subsection (5) purports to declare all prior imposition of relevant charges to be lawful, it has that result only in respect of charges which were also actually paid. It does not apply to charges purportedly imposed on persons with full eligibility but not yet paid.
Subsection (7) provides that subsection (5) is “in addition to and not in derogation of, any other ground (whether under an enactment or rule of law) which may be raised in any civil proceedings referred to in subsection (6) to debar recovery of a relevant charge”. This provision refers principally to the possible reliance on a defence based on the Statute of Limitations. Insofar as subsection (5) has the effect of entirely barring the recovery of a relevant charge, there is little if any room for subsection (7) to have effect. Nonetheless, it appears to declare that any defence at law may be raised in the case of proceedings which are exempted from subsection (5) by subsection (6). For these reasons, no argument has been advanced suggesting that subsection (7) is repugnant to the Constitution.
The principal combined effect of the provisions of subsections (5), (6) and (11) is to debar the recovery of charges demanded of and paid by persons with full eligibility, without lawful authority. It extinguishes the property right of those persons, consisting of a chose in action. It also does so by means of what is accepted as being retrospective legislation.
Submissions
Counsel assigned by the Court have, in dealing with subsection (5) and its related provisions, concentrated principally on its retrospective character.
Article 15.5
That Article of the Constitution, provides that the Oireachtas shall not “declare acts to be infringements of the law which were not so at the date of their commission”. Counsel assigned by the Court accepted that, in principle, the Oireachtas has the competence to adopt legislation which validates actions which were unlawful at the time they were committed. It may not, however, make unlawful any act which was, when committed, lawful. Counsel assigned by the Court submitted that subsection (5) implicitly renders it retrospectively unlawful to have failed to pay charges whose payment is declared always to have been lawful. Non-payment of these charges was, at all relevant times after 1976 lawful but has now been rendered retrospectively unlawful. The Attorney General stressed that subsection (5) is worded so as to apply only to the “imposition and payment” of a charge and, thus, does not apply where for any reason a charge was not paid.
Article 15.2.1
Under that Article, the “sole and exclusive power of making laws for the State is vested in the Oireachtas”. The Oireachtas, by s. 53(1) of the Act of 1970, laid down a legislative policy that Health Boards could not impose charges for in-patient services on persons with full eligibility. Counsel assigned by the Court submitted that the Oireachtas does not have the power retrospectively to validate actions which, when they were committed, were in contravention of the law. Where the Minister had power, pursuant to s. 53(2), to adopt regulations imposing charges in relation to persons with limited eligibility, but this was expressly prohibited by s. 53(1) in the case of persons with full eligibility, he would be acting ultra vires and unconstitutionally, if he purported to adopt regulations of the latter type. He would have been performing a legislative function. This distinguishes the Bill from other types of curative or validating legislation. This was not a case of a mere technical deficiency or want of power but entailed a violation of a provision of an Act of the Oireachtas. Reliance was placed on the dictum of Walsh J. in Shelly v District Justice Mahon [1990] 1 IR 36 at p. 45 that “an unconstitutional procedure cannot subsequently be declared by the Oireachtas to have been constitutional”. Counsel for the Attorney General pointed to a number of express restrictions in the constitutional text on the legislative power of the Oireachtas but said that there was no basis for saying that there can be some additional unidentified but implied restriction of the type alleged. The Bill is a type of curative legislation of which many examples had been enacted by the Oireachtas of Saorstát Éireann and the framers of the Constitution must have been conscious of the possibility of that type of legislation at the time of adoption of the Constitution. Counsel relied on the statement of Keane C.J. in Director of Public Prosecutions –v- Leontjava, Supreme Court, Unreported, 23rd June, 2004, that “…the Constitution affords a strikingly wide latitude to the Oireachtas in adopting whatever form of legislation it considers appropriate in particular cases”. Counsel also cited Pine Valley Developments Limited & Ors –v- Minister for the Environment and the Attorney General [1987] IR 23. This part of the argument led to extensive citation of United States authorities. Counsel assigned by the Court relied upon: Forbes Pioneer Boat Line –v- Board of Commissioners of Everglades Drainage District (1922) 258 US 338; Graham –v- Goodcell (1931) 282 US 409; Washington National Arena Limited Partnership et al. -v- Treasurer, Prince Georges County, Maryland (1980) 410 A.2d 1060. The Attorney General relied principally on United States –v- Heinszen (1907) 206 US 370.
Article 43
Counsel assigned by the Court submitted that, assuming that the Oireachtas had power to enact retrospective legislation in contradiction of its existing declared legislative policy, the Bill, nonetheless, infringes Article 43 read together with Article 40.3.2 of the Constitution, because it adversely affects vested interests. The persons who wrongly paid charges have a legal right to recover the charges exacted from them. This constitutes a claim in debt which is, for example, assignable. It constitutes a constitutionally protected property right (OBrien –v- Manufacturing Engineering Limited [1973] IR 334) as well as a right to litigate, though this distinction may not be material. Reference was also made to Moynihan –v- Greensmyth [1977] IR 55, to Foley –v- Irish Land Commission [1952] IR 118, OCallaghan –v- Commissioners of Public Works [1985] ILRM 364, Dreher –v- Irish Land Commission [1984] ILRM 94 and to Attorney General –v- Southern Industrial Trust (1957) 94 ILTR 161. The effect of the Bill is to abolish the right in its entirety and without any compensation. Reference was made to Hamilton –v- Hamilton [1982] IR 466. It was pointed out that, in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321, Keane C.J. said (at p. 352):
“There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property.”
The effect of the Bill is to abolish the property rights in question in their entirety without compensation. This is an “unjust attack” on those rights for the purposes of Article 40.3.2 of the Constitution. This Bill does not merely delimit such rights by law in the interests of the common good, as envisaged by Article 43.2.2 of the Constitution. There is no balancing of competing constitutional rights, as claimed by the Attorney General. The only justification advanced is the financial interest of the State. This is not a case such as Tuohy –v- Courtney [1994] 3 IR 1. The Attorney General argues that the Bill is justified in the interests of the common good and that, in particular, it is concerned to cure a lacuna in legislation. There was never a substantive constitutional right to receive in-patient services free of charge. At most there was a statutory right to receive a benefit. In correcting the problem that arose, when the illegality was discovered, the State was concerned to balance social and economic considerations. These are matters peculiarly within the competence of the Oireachtas, rather than the courts, and the Bill enjoys a heightened presumption of constitutionality.
Proportionality
Counsel assigned by the Court drew attention to the test of proportionality as explained in Heaney and McGuinness –v- Ireland [1994] 3 IR 593 and approved in Re Article 26 of the Constitution and the Employment Equality Bill, 1996 [1997] 2 IR 321. The elements necessary, where a restriction of a right is involved, as explained by Costello J. in the former case, at p. 607, are that the restrictions must:-
“be rationally connected to the objective and not be arbitrary, unfair or based on irrational considerations;
impair the right as little as possible, and
be such that their effects on rights are proportional to the objective…… ”
The Bill does not merely interfere with the right. It proposes to abolish it in its entirety. It was submitted, on the authority, inter alia, of the Australian case, Georgiadis –v- Australian and Overseas Telecommunications Corporation (1994) 179 CLR 297, that the abrogation of a cause of action without compensation was unconstitutional. There is no pressing justification for the Bill such as could be examined for proportionality in the exigencies of the common good. The sole justification is the need of the State not to have to make restitution of charges unlawfully exacted. It was submitted that, in the case-law of the European Court of Human Rights, financial considerations of a respondent government have only in very exceptional circumstances been considered to justify interference with protected rights. Reliance was placed on Pressos Compania SA –v- Belgium (1995) 21 EHRR 301, where a Belgian law exempting the State and providers of pilot services from liability for negligence, including liability for claims in being, was held to interfere with property rights guaranteed by Article 1 of Protocol 1 of European Convention on Human Rights and Fundamental Freedoms. While the Court held the legislation to be justified prospectively by the very large expense to the Belgian state, it was not justified insofar as it deprived the applicants in existing cases of their claims. Reference was also made to Zielinski –v- France (2001) 31 EHRR 19 and to National Provincial Building Society & Ors –v- United Kingdom (1997) 25 EHRR 127. The Attorney General places particular reliance on the last-mentioned case. These cases will be discussed more fully at a later stage in this judgment.
Article 40.1
Counsel assigned by the Court submitted that the Bill would give effect in three respects to invidious discrimination which would be repugnant to Article 40.1 of the Constitution. Firstly, s. 53(5), by validating retrospectively the imposition of charges on those who had paid but not on those who, in identical circumstances, had not paid, the Bill would discriminate, without any rational basis, between persons in identical legal situations. Secondly, s. 53(6) would discriminate between those who had and had not instituted legal proceedings prior to 14th December, 2004. Thirdly, the same subsection would discriminate between persons who had instituted proceedings for the recovery of the charge and those who had instituted proceedings by way of judicial review or otherwise merely for a declaration that a charge had been invalidly imposed. It was submitted that there was no justifiable rational difference or distinction, legal or moral, between these categories of persons, who comprised a single class. Reference was made to the dictum of Barrington J. in Brennan –v- Attorney General [1983] ILRM 449 at p. 480, and approved in the judgment of the Court in Re Article 26 of the Constitution and the Employment Equality Bill, 1996 [1997] 2 IR 321 that “the classification [adopted by the Oireachtas] must be for a legitimate legislative purpose … it must be relevant to that purpose, and that each class must be treated fairly”. Counsel also referred to Dillane –v- Attorney General [1980] ILRM 167 at 169, OB. –v- S. [1984] IR 316 at 335 and Quinn Supermarkets Ltd –v- Attorney General [1972] IR 1. Counsel assigned by the Court submits that it constitutes invidious discrimination to provide that those who paid are disadvantaged by not having their money back, whereas those who did not pay are privileged by being allowed to keep the money. Furthermore, s. 53(4), while empowering the Chief Executive Officer of a health board to reduce or waive a charge imposed for the future, does not apply to those who paid in the past. Counsel for the Attorney General submits that, in each of these cases, the distinction was such as the Oireachtas was entitled to adopt. The Court in Re Article 26 of the Constitution and the Employment Equality Bill, 1996 held at p. 346 that Article 40.1 of the Constitution, recognizes the “legitimacy of measures which place individuals in different categories for the purposes of the relevant legislation.” In Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 Keane C.J., delivering the judgment of the Court, said:
“where classifications are made by the Oireachtas for a legitimate legislative purpose, are relevant to that purpose and treat each class fairly, they are not constitutionally invalid.”
The Oireachtas was entitled to consider that the retrospective levying of charges not already paid might infringe Article 15.5 of the Constitution and to take the view that to seek recoupment of charges from such persons at this stage could cause unnecessary hardship. Equally the legislature was entitled to distinguish between those who had instituted proceedings for recovery of charges before14th December, 2004, and those who had not done so. Legislative interference with the former would have amounted to an interference “…with the operations of the courts in a purely judicial domain”, deemed to be incompatible with the Constitution in Buckley & Ors –v- Attorney General [1950] IR 67. Not to have included a provision such as s. 53(6) would manifestly have defeated the purpose of the Bill, as a large number of claims would inevitably have been launched after the publication of the Bill, if some cut-off date had not been provided. Reliance was again placed on Pine Valley Developments Limited & Ors –v- Minister for the Environment and the Attorney General [1987] IR 23. Finally, it was stated that there were not in existence on 14th December, 2004, any proceedings other than of the type specified in subsection (6)(a).
Article 34
Counsel assigned by the Court submitted that the combined effect of subsections (5) and (6) is to enable proceedings commenced before 14th December, 2004, seeking recovery of a relevant charge to survive, but not proceedings for judicial review or declaratory relief, such as have been mentioned in the immediately preceding paragraph under the heading of alleged discrimination. Counsel for the Attorney General submitted that any such claims would be entirely moot and would not, if they existed, be entertained by any Court. If they were not designed to recover any charge, they would not serve any purpose. Thus the subsection would not interfere in any meaningful way with the administration of justice.
Submissions of Attorney General re Murphy –v- Attorney General
The Attorney General, in his defence of the Bill, relied in particular on the decision of this Court in Murphy –v- Attorney General [1982] IR 241. While it would not be true to characterize it as the sole basis put forward to justify interference with the constitutional property rights of patients affected by unlawful charges, it undoubtedly loomed large both in written submissions and at the hearing. In that case, the Court held to be unconstitutional certain provisions of the Income Tax Act, 1967, which provided that the income of married couples be aggregated, resulting in the imposition of tax on a married couple at a higher rate than would be imposed on two single persons in identical circumstances. Following the delivery of its judgment, the Court agreed to an exceptional procedure whereby it would pronounce on the future effects of the declaration. Although there were differences between the judgments and one dissenting judgment, it is accepted that the majority judgment was that of Henchy J., who posed, at p. 306, the specific question:
“Where the plaintiffs have paid, or have had deducted from their earnings, income tax collected under statutory provisions which were subsequently declared unconstitutional, can they recover back such income tax. If so, to what extent? It is a question of profound importance, not only for the plaintiffs and similar taxpayers, and not only in terms of the fiscal arrangements and requirements of the State, but also in a wider context, for its resolution involves a consideration of the further question whether, and to what extent, what has been done pursuant to, or what has happened on foot of, an unconstitutional enactment may be revoked, annulled, rectified, or made the subject of a claim for damages or for some other form of legal redress.”
Full consideration of this important judgment will be necessary at a later point of this judgment. In essence, counsel for the Attorney General explained how Henchy J. had expounded the modern law of restitution as showing that while persons are normally entitled to repayment of monies, “there may be transcendent considerations which make such a course undesirable, impractical, or impossible” (see p. 314). These considerations could, he continued, include “factors such as prescription (negative or positive), waiver, estoppel, laches, a statute of limitation, res judicata, or other matters (most of which may be grouped under the heading of public policy)…”
Following a detailed review of authorities, Henchy J. concluded that, other than the plaintiffs in the very action who had mounted the constitutional challenge, and in their case only for a limited period, no other taxpayers should be held entitled to recover taxes collected from them in reliance on the unconstitutional provisions. Counsel for the Attorney General accepted that the Murphy case related purely to the exercise of judicial power, but submitted that, in the constitutional order, it was equally logical for the legislature to have such a power. Counsel submitted that the Murphy decision applied to the collection of taxes from married couples pursuant to a statute which had been held to be repugnant to the Constitution and, hence, deemed to have been void ab initio, whereas the unlawful charges were collected under the Health Acts on an ultra vires, but not an unconstitutional, basis. Furthermore, the persons concerned had received benefits from the State. It was submitted that the Bill is rooted in almost identical policy considerations. It was submitted strongly that the Bill represented the policy determination of the executive and the two Houses of the Oireachtas, organs of government directly accountable to the People, in relation to the finances of the State. Council for the Attorney General relied on the decision of the Court of Human Rights in National Provincial Building Society & Ors –v- United Kingdom (cited above) in support of their submissions based on Murphy.
Counsel assigned by the Court distinguished Murphy. They pointed out, firstly, that Henchy J. (at p. 318) attached importance to the presumption of constitutionality which prevailed at all times when the relevant taxes were paid and that the State was entitled to rely upon it. In Murphy, the Court accepted that the taxes in question had been received bona fide by the State, whereas in the case of patients wrongly charged for in-patient services, there was no such presumption. The charges were imposed in circumstances of clear illegality and the Bill precludes any inquiry as to whether the charges were imposed in good faith.
Conclusions on several issues raised by Counsel
Before dealing with what the Court sees as the core issue concerning the constitutionality of the Bill, there are a number of questions which arise from the submissions of counsel on both sides which the Court considers convenient to address at this stage.
Article 15.5
The first of these issues is that raised by counsel assigned by the Court as to the meaning and the effect of Article 15.5 of the Constitution which restricts the Oireachtas from adopting legislation with a certain kind of retrospective effect.
Article 15.5 of the Constitution provides:
“The Oireachtas shall not declare acts to be infringements of the law which were not so at the date of their commission.”
The Court is satisfied that no provision of the Bill offends this provision. Subsection (5) merely purports to render lawful the payment of charges, the payment of which was required and which were paid without lawful authority in the past. It does not now seek to render unlawful the failure of any person to pay charges in the past. If it did so, it would infringe Article 15. Accordingly, the Court should, in observance of the presumption of constitutionality which applies to Acts of the Oireachtas, including bills referred to the Court pursuant to Article 26 of the Constitution, interpret the Bill so far as possible so as to bring it into harmony with the Constitution. It is only on a strained interpretation that this particular Bill could be read as rendering unlawful the failure, in the past, of recipients of in-patient services to pay for them. On the contrary, the Bill is careful to render lawful only charges which were in fact paid. Thus, it is unnecessary to adopt any interpretation other than the literal one of the Bill.
US Cases: Restrictions on Curative Legislation
The next question concerns a proposition advanced by counsel assigned by the Court, which they conceded was rather novel, that, even under its general legislative power, and apart altogether from any injustice to persons with vested rights, the Oireachtas did not have power to adopt curative legislation purporting to validate past acts which were expressly prohibited by the legislation then in force. This contention is founded on certain United States case law. However, it is appropriate to consider, in the first instance, the provisions of the Constitution. Article 15.2.1 provides that:
“The sole and exclusive power of making laws for the State is hereby vested in the Oireachtas: no other legislative authority has powers to make laws for the State.”
The Constitution itself, however, places a number of restrictions, express or implied, on the scope of the legislative power. Most importantly, Article 15.4.1 provides that:
“The Oireachtas shall not enact any law which is in any respect repugnant to this Constitution or any provision thereof.”
Furthermore, the Constitution confers express jurisdiction on the High Court to consider “the question of the validity of any law having regard to the provisions of this Constitution”. This is by no means a common or usual power among the constitutions of the world. No corresponding power was contained in the Constitution of the United States of America and it fell to the Supreme Court of that nation to discover that it existed. The boundaries of the legislative power of the Oireachtas are, other than in the important case of the laws of the European Union, to be found within the Constitution itself. Counsel for the Attorney General drew attention to a number of express restrictions on the power, instancing certain electoral provisions. Another obvious example might be that no law could be passed providing for the conferring of titles of nobility (Article 40.2.2). In practice, the most important restraints on legislative power have been found to flow from the guarantees of fundamental rights declared in Articles 40 to 46 of the Constitution.
Nonetheless, having recognized these clear constitutional limits, the consequence of the role of the Oireachtas as the sole and exclusive law-maker for the State means that, in principle, it may legislate on any subject. There is no subject-matter in respect of which it is incompetent to legislate. The Oireachtas is the parliament of a unitary state. The Constitution of a federation necessarily designates the respective competences of the federal government and its component states or provinces. Keane C.J., as already cited, stated, with the agreement of the other members of the Court, in Director of Public Prosecutions –v- Leontjava, Supreme Court, Unreported, 23rd June, 2004, that “…the Constitution affords a strikingly wide latitude to the Oireachtas in adopting whatever form of legislation it considers appropriate in particular cases”. He was speaking, in that case, of the form rather than the subject-matter of legislation. Nonetheless, his words are equally apt if considered in the latter context.
In deference to the careful arguments of counsel assigned by the Court, it is appropriate to consider the authority advanced for the proposition that, having regard to the legislative background and history, the legislative power should be so limited as to deprive the Oireachtas of the power to enact the Bill. It is convenient to refer to the first in time of the American cases. It is United States –v- Heinszen (1907) 206 US 370. The entire matter arose against the background of the Spanish-American War. The President of the United States, while the islands were under the military control of the United States during the war, in the exercise of executive power, made orders imposing tariffs on goods imported into the Philippines. These were valid and lawful. However, upon the ratification of the treaty of peace with Spain, the Philippines were no longer a foreign country and the tariffs, though they continued for a time to be collected, were unlawful. A validating statute was passed by Congress with retrospective effect. The Supreme Court upheld the validity of this curative act, principally on the basis of ratification of the unauthorised act of an agent. Forbes Pioneer Boat Line –v- Board of Commissioners of Everglades Drainage District (1922) 258 US 338 was decided in 1922. It concerned the unlawful collection of tolls for passage through a lock of the defendants canal. A retrospective Florida statute purported to validate the collection. Holmes J. distinguished Heinszen. He said:
“But, generally, ratification of an act is not good if attempted at a time when the ratifying authority could not lawfully do the act………If we apply that principle this statute is invalid. For if the legislature of Florida had attempted to make the plaintiff pay in 1919 for passages through the lock of a canal which took place before 1917, without any promise of reward, there is nothing in the case as it stands to indicate that it could have done so any more effectively than it could have made a man pay a baker for a gratuitous deposit of rolls.”
At a later point, having explained away some cases in which acts done in the name of the government had been ratified and cases of slight technical defect, he thought that in these cases “the meaning simply is that constitutional principles must leave some play to the joints of the machine”. The principal ground for the decision in Forbes appears to have been that, at the time of passage through the canal lock, there was no power to collect tolls. However, it seems plain that they were, in fact, collected and paid. Thus it is difficult to follow the analogy with the bakers free supply of rolls. The reference to “play to the joints of the machine” suggests that there was no compelling distinction between that case and Heinszen. In the much more recent case of Washington National Arena Limited Partnership et al. –v- Treasurer, Prince Georges County, Maryland (1980) 410 A.2d 1060 the Court of Appeals of Maryland attempted a reconciliation of the above “two leading Supreme Court cases”, while acknowledging that “the line between permissible ‘curative legislation and unconstitutionally retroactive legislation has been some what difficult to draw” (see p. 1065). It appears to have concluded that, in Forbes, the Commissioners “were, at the time of the toll collections violating the legislative policy as ascertained by the courts” (emphasis added) (p. 1067). The underlined expression appears important. It echoes the remark of Holmes J. that “the transaction [collection of tolls] was not one for which payment naturally could have been expected” which falls well short of an express prohibition on the collection of tolls. Finally, the Maryland Court warned that its distinction between Heinszen and Forbes could not always “like a mathematical formula” determine whether curative legislation should be upheld. In a later reference, Van Emmerik –v- Janklow (1982) 454 US 1131, it appears that the court, in 1982, acknowledged “the difficulty in discerning the difference between permissible curative legislation and unconstitutionally retroactive legislation”. It notes its duty to “define this boundary”. This Court does not find it possible to discern from the American cases any clear principle regarding permissible retrospective legislation, which would warrant its adoption in the context of interpretation of our Constitution. The American context is quite different. There is no basis for imposing a priori limits to the nature of retrospective legislation, other than those which are to be derived from the Constitution itself, as interpreted by this Court.
Murphy –v- Attorney General
Finally, before considering what the Court considers to be the core constitutional issues, it is at this point appropriate to consider the extent to which the judgments of this Court in Murphy –v- Attorney General [1982] IR 241 may be considered to have a bearing on the constitutional issues which arise in respect of the provisions and on which counsel for the Attorney General relied so extensively in their submissions. In doing so the Court must give careful consideration, firstly, to the judgment of the majority of this Court pronounced by Henchy J. in Murphy –v- Attorney General. The circumstances in which that judgment came to be given were unusual if not unique in the history of this Court. On 25th January, 1980, the Court, on appeal from the judgment of Hamilton J., as he then was, gave judgment declaring ss. 192 to 198 of the Income Tax Act, 1967, to be repugnant to the Constitution. The appeal, being taken by the Attorney General, concerned only the issue of constitutionality. The plaintiffs had included in their proceedings a claim for accounts and inquiries as to the amounts of tax overpaid by them as a result of the impugned sections and their repayment. This had not been the subject-matter of the appeal. Following the delivery of judgment on 25th January, 1980, the Attorney General –not, be it noted, the plaintiffs—applied to be allowed to “speak to the minutes of the order”. His purpose was to ascertain the extent to which the plaintiffs could sustain their claim for accounts and inquiries. In reality, the concern of the State related to the extent to which it might be compelled to make repayments of overpaid tax to persons similarly situated. The Court, Henchy J. dissenting, agreed to hear this application. This procedure related only to the claim of the plaintiffs in Murphy. Although the decision had implications for other taxpayers, the Court did not formally rule on their cases. Apart from repeating his principled objection to this procedure, Henchy J. pointed out that “the facts had not yet been fully investigated”. Nonetheless, it is apparent from his judgment that the Court had at its disposal a significant amount of information about the amounts of tax paid by the plaintiffs, the extent of the impact on them of the impugned sections and the date when they first objected: see pp. 217 and 318. It may be observed that, in the present cases, the Court has no information at all about the circumstances or even the name of any patient who has paid the unlawfully imposed charges, which are purportedly retrospectively validated by the Bill.
It is necessary, however, to examine the judgment delivered by Henchy J. on the issue. It is of the first importance to observe that the judgment of Henchy J. is not authority for the proposition that persons from whom money has been unlawfully collected by the State, whether in the form of taxes or otherwise, are not entitled to recover those amounts. The contrary is the case, as appears at several points in the judgment. The consequence of a declaration that a law is repugnant to the Constitution is that (see p. 313): “from the date of its enactment the condemned provision will normally provide no legal justification for any acts done or left undone, or for transactions undertaken in pursuance of it; and the person damnified by the operation of the invalid provision will normally be accorded by the Courts all permitted and necessary redress;” and at p. 314 that “it is central to the due administration of justice in an ordered society that one of the primary concerns of the Courts should be to see that prejudice suffered at the hands of those who act without legal justification, where legal justification is required, shall not stand beyond the reach of corrective legal proceedings…;” at p. 316, referring to monies collected under the condemned sections: “Whether the action be framed at common law for money had and received or (as here) in equity for an account of money held as a constructive trustee for the plaintiffs, I would hold that, in the absence of countervailing circumstances (to which I shall presently refer), such money may be recovered;…” at p. 317, referring specifically to the plaintiffs claim: “Any one of such payments would normally be recoverable as money exacted colore officii, for the nature of PAYE collection of income tax is such that in the relevant period the plaintiffs’ salaries were subject to compulsory deduction by their employers of the income tax which was exigible under the now condemned statutory provisions. The payments were, therefore, involuntary to the point of being compulsory collections.”
It is clear, therefore, that Henchy J. pronounced in favour of a general rule of recovery of amounts of money unlawfully collected by the State or State authorities. The Attorney General relies, of course, on his several statements, at p. 314, that this is “not a universal rule” and that there may be “transcendent considerations.” The same page contains the following passage:
Over the centuries the law has come to recognize, in one degree or another that factors such as prescription (negative or positive), waiver, estoppel, laches, a statute of limitation, res judicata, or other matters (most of which may be grouped under the heading of public policy) may debar a person from obtaining redress in the courts for injury, pecuniary or otherwise, which would be justiciable and redressable if such considerations had not intervened.”
Each of the circumstances here described is an instance of a defence to a lawful claim, which, therefore, presupposes the existence of a valid claim. It is, of course, possible that patients seeking recovery of charges unlawfully required of them would be met and perhaps defeated by some such defence. The right to put them forward is preserved by subsection (7) of the Bill. To extinguish the claims entirely, without permitting a claim to be advanced, is an entirely different matter.
Henchy J. cited, at p. 319, a number of authorities from other jurisdictions suggesting that there may be circumstances in which full restitution would be inequitable. In particular, a New Zealand statute allowed relief to be refused in full or in part where monies have been received in good faith and the recipient has so altered his position as to render full restitution inequitable. The Bill, however, contains no provision for inquiry as to whether the charges were received in good faith. The claims are to be extinguished whether or not the monies were collected in good faith. In this connection, it is particularly material that, apart altogether from the express prohibition of charging contained in s. 53(1) of the Act of 1970, as and from 2001, all persons aged seventy or over were entitled by statute to be treated as having full eligibility regardless or means. Nonetheless, collection of charges continued. Counsel for the Attorney General frankly and rightly accepted at the hearing that there was no conceivable basis upon which anybody could reasonably have thought the charges could lawfully be levied or collected from persons aged seventy or over after that time. He also accepted the possibility that some such fully eligible persons had made protests. The Court is satisfied, accordingly, that the Murphy judgment offers no support for the Bill, insofar as reliance is placed on equitable principles relieving defendants from full restitution on the grounds of good faith.
It is also necessary to consider the precise grounds, set out at pp. 319 and 320, for refusing recovery to the plaintiffs in Murphy beyond the date upon which they had instituted their proceedings. Henchy J. commences by recalling the presumption of constitutionality, stating that it is beyond question that the State in its executive capacity received the moneys in question in good faith, in reliance on the presumption that the now condemned sections were favoured with constitutionality. Clearly, the unlawful collection of charges, at present under consideration, was not protected by any presumption, constitutional or otherwise. For the reasons mentioned in the preceding paragraph, the State is not in a position to rely on any presumption of good faith. This is not to say that monies were necessarily collected in bad faith. Rather, as already stated, the Bill permits no inquiry as to whether there was good or bad faith. The validation of the unlawful collection of charges is the very justification and sole reason for which the Oireachtas came to enact retrospective validating legislation.
Finally, it is necessary to consider the decision of the European Court of Human Rights in National Provincial Building Society & Ors –v- United Kingdom (1980) 25 EHRR 127 which counsel for the Attorney General cited, in effect, as being analogous to and in support of their reliance on the decision in Murphy –v- The Attorney General. That decision arose from a long and extremely complex history of tax legislation and attendant litigation in the courts of England and Wales and then at the European Court. In deference to the strong reliance placed upon it, it is necessary to explain its background. Building societies in England collect tax from their deposit-holders, which they remit to the Inland Revenue. For a number of years, there existed an extra-statutory arrangement under which the societies negotiated a composite tax rate (taking account of the varying tax rates applying to their customers) and paid over tax in each year by reference to a preceding equivalent period. Different societies used different reference periods. It was decided, in the mid-1980s, to place the entire system on a new statutory footing. This involved abandoning the preceding-year basis. As a result, there was a “gap period” between the old and the new periods for which tax was paid. Regulations were adopted, containing provisions to enable tax to be recovered for the “gap periods”. These were held to be invalid in the English courts, for what the UK Government told the European Court of Human Rights, and it accepted, were “purely technical” reasons, and which do not concern us. The Woolwich Building Society successfully brought proceedings for recovery of tax paid under the invalid regulations, coincidentally those already cited regarding the law of restitution. Parliament passed retrospective legislation validating the regulations and excluding any recovery claims other than those of the Woolwich. There was a large dispute between the societies and the UK Government as to whether the effect of this legislation was to impose double taxation on the societies or whether the effect of the invalidation of the legislation was to confer very large windfall gains on the societies. It is vital to a proper understanding of the decision of the European Court to note that it fully accepted the Governments position. The Court found that the societies had deducted the tax for the gap periods from interest paid to their investors and that these amounts were lodged in their reserves. The Court said (para. 59):
“It is an inescapable conclusion that had steps not been taken to bring those amounts into account in the move from the prior period system to the actual-year system, the applicant societies would have been left with considerable sums of money representing unpaid tax.”
The Court rejected the argument that there was double taxation. There was mere acceleration of payment. The Court accepted that the effect of the retrospective legislation was to deprive the applicant societies of the right to bring a claim of the same type as the Woolwich, but considered that these would be “opportunistic legal proceedings to exploit technical defects in the …Regulations and to frustrate the original intention of Parliament.” It also considered that the effect of not adopting the contested legislation would have been to allow the societies “to retain a windfall.” It is easy to see why the Court did not accept that the societies were suffering any unjust interference with their claims. Indeed, the Court declined to rule directly that these claims were “possessions” for the purposes of Article 1 of Protocol 1. By reason of the changeover of payments, there was a gap. The societies would have been allowed to retain amounts for tax that they had collected from their clients.
The Attorney General argued that the decision of the majority of this Court in Murphy supported by the reasoning of the European Court in National Provincial Building Society –v- United Kingdom provides justification for the Bill. In this connection, it is submitted that the patients received the services for which they were charged and that their right to free provision of the services was statutory and not constitutional. The Court does not find these arguments persuasive. At the time of their provision, the patients were entitled to have the services free of charge and the charges were imposed and money demanded unlawfully and contrary to the express provisions of the statute. The situation of the building societies in National Provincial Building Society is much more analogous to the case of Minister for Social, Community and Family Affairs –v- Scanlon [2001] IR 64 decided by this Court. The building societies could never, as a matter of justice, have been considered entitled to retain monies they had deducted for tax from their clients and not paid over to the Revenue. The Court, therefore, rejects the arguments of the Attorney General insofar as they are based on both Murphy and National Provincial Building Society.
Property Rights: Articles 40 and 43
Articles 40.3.2 and 43
The Court now turns to what it considers to be the core issues which arise from the submissions of counsel concerning the constitutionality of the Bill. These concern the nature of the existing rights of persons entitled to recover charges unlawfully paid and the justification of the State for delimiting those rights. In their submissions counsel assigned by the Court also argued that such legislation would be specially objectionable insofar as it purported to interfere with vested rights. They cited the judgment of OHiggins C.J. in Hamilton v Hamilton [1982] IR 466 at 474:
“Retrospective legislation, since it necessarily affects vested rights, has always been regarded as being prima facie unjust.”
Henchy, Griffin and Hederman JJ. agreed with the conclusions of the Chief Justice. Henchy J. added at p. 484:
“The judicial authorities (which are mentioned in the judgment which the Chief Justice has just delivered) make clear that, because there is a presumption that a statute does not intend to operate unfairly, unjustly or oppressively by trenching on rights or obligations lawfully acquired or created before the statute came into force, it should be construed as prospective in its application and not retrospective, unless there is a clear and unambiguous intention to the contrary expressed, or necessarily implied, in the statute, or unless the change effected by the statute is purely procedural”.
These two statements concern only the approach of the common law to the interpretation of retrospective legislation. The topic was further considered by this Court in Minister for Social Welfare –v- Scanlon [2001] 1 IR 64. Fennelly J., speaking for a unanimous Court, referred to the need “to segregate the two issues, namely the correct approach to the interpretation of statutes with potential retrospective effect in accordance with common law principles and the interpretation of provisions with such effect in the light of the Constitution.” In the case of this Reference, it is not suggested that any particular issue of interpretation arises. It is acknowledged that subsection (5) has the retrospective effect of deeming the past collection and payment of charges to be lawful and that that will deprive the affected persons of the right to restitution. Indeed, that is its acknowledged purpose. The relevance of the Hamilton case is, therefore, its repetition of the presumption that retrospective legislation which affects vested rights is prima facie unjust. The relevance of the Scanlon case is that retrospective legislation is not necessarily unjust. In that case, the defendant had received disability benefits over a number of years, although he had been working during that time. At the time of payment of the benefits, there was no provision for their recovery. An amendment was introduced with retrospective effect. The constitutionality of the provision was not challenged, but it was submitted that it should, to be compatible with the Constitution, not be construed so as to have retrospective effect. This submission was rejected, except in one respect, on the ground that there was no identifiable constitutional right to retain benefits which had been wrongly obtained.
The nature of the property right enjoyed by patients affected by subsection (5) has already been analysed as being a chose in action. It is now necessary to consider the constitutional provisions protecting the rights of private property.
Under the heading, “Private Property” the Constitution contains the following Article:
Article 43
1. 1° The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
2° The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.
2. 1° The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2° The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.
Article 40, s. 3 of the Constitution provides:
3. 1° The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen.
2° The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
As was stated by Keane C.J. delivering the judgment of the Court in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 at p. 347, “the interpretation of these Articles and, in particular, the analysis of the relationship between Article 40.3.2 and Article 43 have not been free from difficulty”. A comprehensive discussion of evolving jurisprudence on this subject is contained in Hogan and Whyte J. M. Kelly: The Irish Constitution (4th Ed., Lexis Nexis Butterworths, Dublin, 2004, pp. 1978 to 1993). The learned authors conclude, at p. 1993, that “when considering constitutional protection of property rights, these Articles mutually inform each other”. Keane C.J., in the judgment mentioned, recalled, firstly, the statement of OHiggins C.J. delivering the judgment of the Court in Blake –v- Attorney General [1982] IR 117 at p. 135:
“Article 43 is headed by the words “private property.” It defines… the attitude of the State to the concept of the private ownership of external goods and contains the State’s acknowledgement that a natural right to such exists, antecedent to positive law, and that the State will not attempt to abolish this right or the associated right to transfer, bequeath and inherit property. The Article does, however, recognise that the State “may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.” It is an Article which prohibits the abolition of private property as an institution, but at the same time permits, in particular circumstances, the regulation of the exercise of that right and of the general right to transfer, bequeath and inherit property. In short, it is an Article directed to the State and to its attitude to these rights, which are declared to be antecedent to positive law. It does not deal with a citizen’s right to a particular item of property, such as controlled premises. Such rights are dealt with in Article 40 under the heading “personal rights” and are specifically designated among the personal rights of citizens. Under Article 40 the State is bound, in its laws, to respect and as far as practicable to defend and vindicate the personal rights of citizens.
There exists, therefore, a double protection for the property rights of a citizen. As far as he is concerned, the State cannot abolish or attempt to abolish the right of private ownership as an institution or the general right to transfer, bequeath and inherit property. In addition, he has the further protection under Article 40 as to the exercise by him of his own property rights in particular items of property”.
Keane C.J. proceeded, however, to suggest some modification of the approach adopted in Blake. He said, at p. 348:
It is clear, particularly when the later decisions of the court are examined, that this approach cannot now be adopted without at least some reservations. It is no doubt the case that the individual citizen who challenges the constitutional validity of legislation which purports to delimit or regulate the property rights undertakes the burden of establishing that the legislation in question constitutes an unjust attack on those rights within the meaning of Article 40. It is also possible to envisage an extreme case in which the Oireachtas by some form of attainder legislation purported to confiscate the property of an individual citizen without any social justification whatever. In such a case, no inquiry would be called for as to whether the legislation also conformed to the requirements of Article 43. The challenge typically arises, however, as it has done here, in circumstances where the State contends that the legislation is required by the exigencies of the common good. In such cases, it is inevitable that there will be an inquiry as to whether, objectively viewed, it could be regarded as so required and as to whether the restrictions or delimitations effected of the property rights of individual citizens (including the plaintiff in cases other than references under Article 26) are reasonably proportionate to the ends sought to be achieved.
That the provisions of Article 43 are relevant to the inquiry undertaken by the courts where they are considering a challenge to the constitutionality of legislation on the ground that it constitutes an unjust attack on the property rights of the citizen within the meaning of Article 40 was made clear in the subsequent decision of this court in Dreher –v- Irish Land Commission [1984] ILRM 94, which it will be necessary to consider at a later point.
In the case of Dreher –v- Irish Land Commission, mentioned in that passage, Walsh J., with the agreement of the other members of the Court, had expressed the opinion that “any State action that is authorised by Article 43 of the Constitution and conforms to that Article cannot by definition be unjust for the purposes of Article 40.3.2”. This statement was followed in several later cases, notably OCallaghan –v- Commissioners of Public Works, [1985] ILRM 364 and Madigan –v- Attorney General [1986] ILRM 136 at p. 161. It remains a correct statement of the close relationship between the two Articles. It remains, of course, necessary to consider how the Court should interpret Article 43 and, in particular how it should exercise its own power of review of legislation, which the Oireachtas has enacted in accordance with its own views of necessary regulation of property rights in the interests of social justice and the exigencies of the common good.
In Tuohy –v- Courtney, [1994] 3 IR 1 this Court was concerned with a challenge to the constitutionality of a provision of the Statute of Limitations, 1957, proceeding, without necessarily deciding the point, on the basis that the right to litigate was a property right protected by the Constitution. It had been agreed that, “in legislating for time limits on the bringing of actions, [the Oireachtas] is essentially engaged in a balancing of constitutional rights and duties”. Finlay C.J., delivering the judgment of the Court, laid down a principle of general application when dealing with such legislation. He said, at p. 47:
“What has to be balanced is the constitutional right of the plaintiff to litigate against two other contesting rights or duties, firstly, the constitutional right of the defendant in his property to be protected against unjust or burdensome claims and, secondly, the interest of the public constituting an interest or requirement of the common good which is involved in the avoidance of stale or delayed claims.
The Court is satisfied that in a challenge to the constitutional validity of any statute in the enactment of which the Oireachtas has been engaged in such a balancing function, the role of the courts is not to impose their view of the correct or desirable balance in substitution for the view of the legislature as displayed in their legislation but rather to determine from an objective stance whether the balance contained in the impugned legislation is so contrary to reason and fairness as to constitute an unjust attack on some individual’s constitutional rights.”
The foregoing statement was followed by this Court in Iarnród Éireann & Anor –v- Ireland and the Attorney General [1996] 3 IR 321, a case concerning a challenge to the constitutionality of certain provisions of the Civil Liability Act, 1961, regarding concurrent wrongdoers, though the judgment of the Court is silent as to whether the rights of litigants in that context constituted property rights. Keane J., as he then was, had treated them as property rights in his High Court judgment. The same passage from Tuohy was applied by this Court in White –v- Dublin City Council [2004] 2 ILRM 509, also a case dealing with the constitutionality of a limitation period. Once more, the Court found it unnecessary, following the view of Finlay C.J., to determine whether the right to litigate constituted a property right. Implicit in the statement that there would be no material difference in the constitutional protection provided is the assumption that the Oireachtas may have been involved in deciding whether the principles of social justice required the regulation of the exercise of the property rights in question and whether their delimitation was therefore justified by the exigencies of the common good. Denham J., delivering the judgment of the Court, stated, at p. 531, that “striking a balance in the form of a limitation period is quintessentially a matter for the judgment of the legislator”. She went on to state that the passage from the judgment of Finlay C.J. “in effect restates………the presumption of constitutionality enjoyed by all acts of the Oireachtas”.
An important part of the analysis of justification for interference with constitutional property rights is the question of compensation. Reference has already been made to the statement of Keane C.J. in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 (at p. 352):
“There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property.”
That Reference concerned a form of taking of property with a measure of compensation. There have been cases where the Court has upheld interference with property rights without compensation. In OCallaghan –v- Commissioners of Public Works [1985] ILRM 364 the Court did not consider that the absence of any provision for compensation for the making of a preservation order in respect of a public monument on the plaintiff s lands rendered the relevant legislation repugnant to the Constitution. The Court, in the judgment of OHiggins C.J., pointed out, at p. 367, that “the order does not deprive the owner of his ownership nor of his rights to use the monument in any manner not inconsistent with it preservation”. It also pointed out that the plaintiff was aware of the limitation at the time of purchase and that what was involved was “a requirement of what should be regarded as the common duty of all citizens”. In Dreher –v- Irish Land Commission [1984] ILRM 94 this Court rejected a challenge to provisions of the Land Acts to the effect that compensation for land compulsorily acquired under that legislation was to be paid only in the form of land bonds, the value of which was liable to fluctuation. An examination of the facts of that case shows that, as the Court pointed out, the plaintiff received full compensation for the value of his land, that the bonds were issued at and intended to be kept at par and that, on the facts of the case, they had traded above par at a time when the plaintiff could have disposed of them. For these reasons, Keane C.J., in the judgment of the Court in Re Article 26 of the Constitution and the Planning and Development Bill, 1999, at p. 351, expressed the view that Dreher “should be regarded as one essentially decided on its own special facts”. Against these cases may be set the decision of this Court in Electricity Supply Board –v- Gormley [1985] IR 129, where a statutory power of the plaintiff to erect masts to carry electricity power lines across the defendants lands, though not a power to lop trees and branches, without payment of compensation, was held to be unconstitutional. In a number of cases also, there has been discussion of the appropriate level of compensation: see Blake –v- Attorney General [1982] IR 117 In Re Article 26 of the Constitution and the Housing (Private Rented Dwellings) Bill, 1981 [1983] IR 181; Dreher, already discussed. From a consideration of these and other decided cases, it is clear that, where an Act of the Oireachtas interferes with a property right, the presence or absence of compensation is generally a material consideration when deciding whether that interference is justified pursuant to Article 43 or whether it constitutes an “unjust attack” on those rights. In practice, substantial encroachment on rights, without compensation, will rarely be justified.
For the purposes of its consideration of whether the Bill or any provision thereof is repugnant to the Constitution, the Court is satisfied that the correct approach is: firstly, to examine the nature of the property rights at issue; secondly, to consider whether the Bill consists of a regulation of those rights in accordance with principles of social justice and whether the Bill is required so as to delimit those rights in accordance with the exigencies of the common good; thirdly, in the light of its conclusions on these issues, to consider whether the Bill constitutes an unjust attack on those property rights.
According to the text of Article 43, the private ownership of external goods is a “natural right”. For that reason, it is “antecedent to positive law”. It inheres in man, “by virtue of his rational being.” The former Supreme Court, in Buckley –v- Attorney General [1950] IR 67 recalled that these rights had “been the subject of philosophical discussion for many centuries”. But it did say that the constitutional guarantee meant that “man by virtue, and as an attribute of, his human personality is so entitled to such a right that no positive law is competent to deprive him of it……” The right to the ownership of property has a moral quality which is intimately related to the humanity of each individual. It is also one of the pillars of the free and democratic society established under the Constitution. Owners of property must, however, in exercising their rights respect the rights of other members of society. Article 43.2.1, therefore, declares that these rights “ought, in civil society, to be regulated by the principles of social justice”. The property of persons of modest means must necessarily, in accordance with those principles, be deserving of particular protection, since any abridgement of the rights of such persons will normally be proportionately more severe in its effects.
For the reasons already given, the Court is satisfied that patients upon whom charges for in-patient services were unlawfully imposed from and after 1976 and, a fortiori, after 2001, and who paid those charges were entitled, as of right, to recover those charges. The actions for recovery could be based upon the law of restitution already discussed. They might be based on the modern approach to the recovery of money paid under a mistake of law (see Rogers –v- Louth County Council [1981] IR 265). The action might take the simple form of a claim for the repayment of money had and received to the use of the plaintiff or a claim in equity for a declaration that certain monies were held in trust. The form of the action is immaterial for present purposes. What is clear is that the patients had a property right consisting of a right of action to recover the monies. While the Attorney General has not seriously contested the existence of this form of right, counsel on his behalf have advanced some arguments designed to cast doubt upon it. Firstly, it was said that the right was a mere statutory right, the right to the free provision of services, a right susceptible of change or amendment. This, in the view of the Court, does not address the nature of the property right. Because the statutory right existed, patients were entitled to receive the relevant services free of charge. This right persisted so long as s. 53(1) of the Act of 1970 remained unchanged, as it did. Secondly, it was said that the patients had, in fact, received the services. The same response is appropriate. The services should have been supplied on the express legal basis that they were free of charge. The charging was unlawful. Thirdly, it is said that, in many cases, the beneficiaries of any recovery will be the relatives, often the distant relatives of the patients, who, in many cases are now deceased. This argument does not address the legal character of a property right. The right in question is assignable and will devolve on the estates of deceased persons. In any event, the Bill does not seek to establish any scheme for distinguishing between meritorious and unmeritorious beneficiaries of recoupment claims. All are treated in the same way.
In contrast to the approach taken by counsel for the Attorney General, as outlined in the preceding paragraph, counsel assigned by the Court relied on the views expressed by the European Court of Human Rights in Pressos Compania SA –v- Belgium (1995) 21 EHRR 301. That case concerned retrospective Belgian legislation concerning claims for damages by a number of ship-owners as a result of alleged negligence of Belgian pilots. The Belgian Government claimed that, as a result of a decision of the Cour de Cassation, it found itself exposed to enormous unforeseen damages claims. Belgium adopted a law exempting the Belgian Government from liability for the negligence of pilots, with retrospective effect. The applicants had existing claims. The Court held that the interference with existing claims to be “a deprivation of property within the meaning……” of Article 1 of Protocol 1. It noted that the justification was “the need to protect the States financial interests……” Dealing with the proportionality of the interference, the Court stated that “the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation can be considered justifiable……only in exceptional circumstances.” (para. 38). Responding to reliance on financial considerations, it stated:
“Such considerations could not justify legislating with retrospective effect with the aim and consequence of depriving the applicants of their claim for compensation.
Such a fundamental interference with the applicants rights is inconsistent with preserving a fair balance between the interests at stake.”
While the Court does not rely on that case for its final conclusions, and although it has its own particular facts giving rise to issues to be resolved under the terms of the European Convention on Human Rights, it is nonetheless illustrative of the issues which can arise for courts when retrospective legislation affects the legal status of previous transactions.
As regards the issues arising in this Reference it bears repetition that the property rights to be abrogated in their entirety by the Bill belong to the most vulnerable members of society. While the extension of full eligibility to all aged seventy or over, regardless of means, in 2001 means that a number will not be of limited means, the reality is that a great many will still be among the poorest in our society. Whatever exceptions may exist, it is an undoubted fact that the Bill will affect very many people who are old, or poor or disabled, mentally or physically, or in many cases all of these. As already stated, persons so situated will almost certainly have had little or no capacity to understand their rights under the legislation or to protest at the unlawfulness of the charges. All of these elements will be relevant to a consideration of the grounds upon which the Attorney General justifies the legislation.
Although counsel for the Attorney General on occasions referred to the Bill as curative the Court does not consider that the Bill is simply a curative or remedial statute, insofar as its retrospective provisions are concerned. Curative statutes are those measures that will either ratify prior official conduct or make a remedial adjustment in an administrative scheme. They often are the result of previous court decisions which overrule certain administrative conduct. In these situations the legislature is simply correcting the statutory flaws or filling a gap in statutory authority which had not been considered necessary and which the Oireachtas could always have adopted. Curative statutes, in the classical sense, remove unintended flaws in existing legislation and help to give full effect to the legislative intent behind the initial or original legislation. It goes without saying that any such legislation must be in conformity with the Constitution but its purely curative or remedial nature is a factor to be taken into account in the consideration of any constitutional issue.
The situation which the Bill addresses is quite different. The original intent of the legislature is to be found in s. 53 of the Act of 1970, which expressly conferred on persons of full eligibility under the Health Acts the right to in-patient services without charge. In deeming the charges imposed contrary to the provisions of that section as lawful the Bill is not simply curative, since it goes directly contrary to the legislative intent of the initial legislation. It thereby seeks to alter the legal effect of completed transactions which had been conferred on them by an Act of the Oireachtas. This inevitably gives rise to considerations that differ from the simply curative or remedial legislation of the kind referred to above, particularly in respect of the rights of persons to recover monies paid for charges which were imposed on transactions contrary to the express intent of the Oireachtas.
Furthermore, for this reason it should be emphasised that it would be entirely inaccurate to characterise the recovery by persons of the monies which they paid in respect of the unlawful charges as anything in the nature of a windfall for such persons with a valid claim.
Justification Expense to the State
It is admittedly not possible to establish definitively the factual background to the legislation, although this judgment seeks to identify certain matters of fact on the basis of common sense. The basic proposition advanced on behalf of the State is clear and simple. It is that the cost to the exchequer of repaying all patients in the relevant category will be very great. It was not contended on behalf of the State that it is faced with a serious financial crisis. It was stated that, going back as far as 1976, some 275,000 patients would have received the relevant services. Taking into account the right of the State to limit its liability by reliance on the Statute of Limitations, it was said that the figure to be repaid for the past six years could be of the order of €500 million. Counsel assigned by the Court pointed out that the total budget for the health services for the current year is of the order of €11 billion, which was not contradicted by counsel for the Attorney General.
The Court accepts that, upon discovery of an unforeseen liability to reimburse patients in the relevant categories, the State may find itself faced with a significant additional financial burden. However, while it is the opinion of the Court that the financial burden on the State of making the relevant repayments is a substantial one, it is by no means clear that it can be described as anything like catastrophic or indeed that it is beyond the means of the State to make provision for this liability within the scope of normal budgetary management.
Counsel for the Attorney General has submitted, in reliance especially on Article 43 of the Constitution and of the judgment of this Court in Tuohy –v- Courtney [1994] 3 IR 1 that the Oireachtas, in enacting the Bill, was engaged in balancing complex economic and social considerations, a matter classically within legislative rather than judicial competence. Accordingly, the Court should be extremely slow to intervene. It should be recalled also that Keane C.J. wrote to similar effect in Re Article 26 of the Constitution and the Planning and Development Bill, 1999 [2000] 2 IR 321 where, speaking of the presumption of constitutionality, he said at p. 358:
“It is peculiarly the province of the Oireachtas to seek to reconcile in this area the conflicting rights of different sections of society and that clearly places a heavy onus on those who assert that the manner in which they have sought to reconcile those conflicting rights is in breach of the guarantee of equality.”
In considering that argument, it is of prime importance to consider the extent of the interference with property rights proposed by the Bill. What it proposes is the extinction of the rights in question. All patients, from whom charges have been unlawfully collected, regardless of their circumstances, are simply to be deprived of any right to recover sums lawfully due to them. No relief against this effect is provided, discretionary or otherwise, in the Bill, though the Court was informed of the discretionary decision of the State to make ex gratia payments of €2,000 each to some 20,000 people. The absence of compensation is, in reality, the object of the legislation. This aspect of the case law is not, therefore, particularly relevant, except to show the exceptional nature of these aspects of the Bill.
In the view of the Court, such legislation cannot be regarded as “regulating” the exercise of property rights. It is straining the meaning of the reference in Article 43.2.1 of the Constitution to the “principles of social justice” to extend it to the expropriation of property solely in the financial interests of the State. This is not at all the type of balancing legislation which was in contemplation in Tuohy –v- Courtney, White –v- Dublin City Council [2004] 2 ILRM 509 or Iarnród Éireann & Anor –v- Ireland and the Attorney General [1996] 3 IR 321. All of these cases concerned legislation designed to reconcile the interests of different categories of people in society. The case of the Planning Bill, 1999 might be thought to present an alternative case of such reconciliation. However, that Bill was not designed to protect the financial interests of the State, but rather to provide land for housing for social reasons. Furthermore, there was provision for compensation. The Court does not exclude the possibility that, in certain cases, the delimitation of property rights may be undertaken in the interests of general public policy. However, the invocation of these Articles in circumstances where rights such as arise in this case, rights very largely of persons of modest means, are to be extinguished in the sole interests of the States finances would require extraordinary circumstances.
Moreover, it is evident from the terms of the Bill and the submissions on behalf of the Attorney General, that the persons who are affected by its retrospective provision are being required by the Bill to bear the consequential burden of the unlawful charges in order to protect the exchequer generally, or the health budget in particular, from that burden. The rationale for so doing, according to the submissions of the Attorney General, is that these were persons who actually benefited from the services in question. The Court does not accept this as a rational basis for requiring that class of person to bear the burden of the ultimate cost of the charges which were unlawfully imposed on them. Those persons are in no different position from all other persons who enjoyed a whole range of free statutory services or benefits under the Health Acts. The fact that they received a service to which they were freely entitled by statute is not a distinguishing feature. Their only distinguishing feature is that they were unlawfully charged for the service.
It is, in effect, for this reason that their property rights are being abrogated.
Where a statutory measure abrogates a property right, as this Bill does, and the State seeks to justify it by reference to the interests of the common good or those of general public policy involving matters of finance alone, such a measure, if capable of justification, could only be justified as an objective imperative for the purpose of avoiding an extreme financial crisis or a fundamental disequilibrium in public finances.
Having regard to the terms of the Bill and taking into account all of the submissions of counsel, nothing has emerged in the course of the Reference from which the Court could conclude that the abrogation of the property rights in question is an imperative for the avoidance of an extreme financial crisis or a fundamental disequilibrium in public finances.
For the reasons set out above the Court is satisfied that subsection (5) and the associated provisions of the Bill constitute an abrogation of property rights and an unjust attack on them contrary to the provisions of the Constitution and in particular Articles 43 and 40.3.2..
Having regard to the conclusion expressed in the immediately preceding paragraph, it is unnecessary to consider any argument based on the principle of proportionality. It is also not necessary to consider the arguments related to Article 40.1 and Article 34. The Court does not consider that any issue arises concerning subsection (8) of s. 53 of the Act of 1970 as inserted by s. 1(b) of the Bill.
Decision of the Court pursuant to Article 26
The prospective provisions of the Bill, that is to say those provisions which require the imposition of charges for in-patient services to be provided in the future, concern matters for which the Oireachtas has power to legislate. The power to regulate and impose such charges delegated to the Minister by s. 1(a) of the Bill falls within the principles and policies of the Bill and, in the view of the Court, is compatible with Article 15.2.1 of the Constitution. Having regard to the maximum level of charges and the discretionary provision concerning the imposition of charges in individual cases, the Court does not consider that those charges, either in principle or in themselves, could be considered an infringement of any constitutional right.
The retrospective provisions of the Bill are those which abrogate the right of persons, otherwise entitled to do so, to recover monies for charges unlawfully imposed upon them in the past for the provision of certain in-patient services.
The practice which gave rise to the imposition of such charges was not one which was followed simply in the absence of lawful authority but was one which was contrary to the express provisions of s. 53(1) of the Health Act, 1970 by virtue of which the Oireachtas has decreed that the in-patient services in question be provided without charge. The recovery of such monies thus unlawfully charged by those entitled to do so could not properly be characterised as a ‘windfall.
The Court considers that the right to recover monies for the charges thus imposed is a property right of the persons concerned which is protected by Articles 43 and 40.3.2 of the Constitution from, inter alia, unjust attack by the State.
The Constitution, in protecting property rights, does not encompass only property rights which are of great value. It protects such rights even when they are of modest value and in particular, as in this case, where the persons affected are among the more vulnerable sections of society and might more readily be exposed to the risk of unjust attack.
For the reasons expressed in this judgment the Court has decided that the retrospective provisions of the Bill contained in s. 1(b) which provide for the insertion of subsections (5), (6) and (7), and subsection (11) insofar as it defines “relevant charge”, in s. 53 of the Act of 1970, are repugnant to the Constitution and in particular Articles 43 and 40.3.2 thereof.
Clinton v An Bord Pleanála [2005] I.E.H.C. 84
Judgment of Finnegan P. delivered on the 15th day of March 2005
The issues in this matter were litigated between the Applicant and the Respondents the Notice Parties, having appeared, taking no active part in the proceedings.
This application concerns an extensive site at the northern end of O’Connell Street on its western side extending to the west to Moore Street, to the north to O’Rahilly Parade and to the south to Henry Place. The most prominent building within the site is the Carlton Cinema which fronts onto O’Connell Street. In February 1998 Dublin Corporation published an Integrated Area Plan for O’Connell Street. All of the site with which I am concerned is affected by the proposals contained in that Plan and in particular those in relation to Site Cluster 1 thereof. In short the Plan envisaged an integrated and comprehensive redevelopment of the area with the aid of tax incentives. Beginning in the early 1990s the Applicant with other parties assembled a site of some forty properties within Site Cluster 1 and obtained planning permission in respect thereof by decision dated 4th August 1999 of An Bord Pleanála. Included in the planning permission were premises occupied by Dublin County Council which are outside Site Cluster 1. On the 11th December 2001 the second named Respondent Dublin City Council made a Compulsory Purchase Order in respect of all the lands comprised within the planning permission save and except premises 58 Upper O’Connell Street. The Compulsory Purchase Order was confirmed by An Bord Pleanála on the 17th January 2003 but omitted from the same were the premises occupied by Dublin County Council and No. 57 Upper O’Connell Street. In these proceedings the Applicant seeks to impugn the Compulsory Purchase Order on both non constitutional and constitutional grounds.
The Non Constitutional Grounds
On day 14 of the hearing before me Counsel for the Applicant set out five specific grounds which had crystallised in the course of the hearing and upon which it is claimed the Applicant is entitled to relief. The five grounds are as follows:-
1. The Order of An Bord Pleanála confirming the Compulsory Purchase Order made on the 17th January 2003 is invalid on its face having failed to deal with the Applicant’s application for costs pursuant to section 219 of the Planning and Development Act 2000 and an application by the Applicant for the production of documents pursuant to section 135(5)(ii) of the Planning and Development Act 2000.
2. The said Compulsory Purchase Order is invalid in that it fails to state fully or accurately the purposes for which the same is being made.
3. The said Compulsory Purchase Order is invalid and ultra vires in that it fails to set out any or any adequate reasons for the decision of An Bord Pleanála and in particular reasons for those components of the decision where An Bord Pleanála departed from the recommendation and reasoning of its Inspector.
4. The said Compulsory Purchase Order is invalid on its face in that it was confirmed for a purpose other than the purpose for which the Compulsory Purchase Order under appeal had been made.
5. The said Compulsory Purchase Order is invalid the same having been confirmed without evidence being adduced by Dublin City Council. In consequence the Applicant was unable to test the manner in which the general statutory purposes identified in the Compulsory Purchase Order and supporting documents was to be achieved. Further An Bord Pleanála was without evidence as to the manner in which the general statutory purposes identified in the Compulsory Purchase Order and the supporting documents was to be achieved.
In dealing with this issue Counsel for the Applicant sought to argue that the Order of An Bord Pleanála was bad: the Compulsory Purchase Order relied on a statutory purpose within section 212 of the Act of 2000 while An Bord Pleanála relied on a section 213 statutory purpose. Counsel on behalf of An Bord Pleanála objected that the same did not come within the grounds of relief relied upon by the Applicant in respect of which leave was granted and in particular Ground 22. Ground 22 is as follows:-
“22 The confirmed Compulsory Purchase Order is bad in law and/or exhibits an error of law on the face of the record in that it fails to fully and accurately state the particular purpose for which the land is required. In this regard the Applicant will rely inter alia on the provisions of the Housing Act 1966 (Acquisition of Land) Regulations 2000 (S.I. No. 454 of 2000) and the provisions of Third Schedule of the Housing Act 1966. (See also section 213(4) of the Planning and Development Act 2000 adapting the provisions of section 10 (as amended by section 86 of the Housing Act 1966) of the Local Government (No. 2) Act 1960). The Applicant will also rely on their being a general requirement at law, given the draconian nature of a power to compulsory acquisition, that a confirmed compulsory order show jurisdiction on its face. In short the Compulsory Purchase Order gave as its purpose “for development purposes”. The Order of An Bord Pleanála gave as its purpose “the purposes of facilitating the implementation of the Dublin City Development Plan and that the said objections cannot be sustained against the said necessity”.
Counsel for Dublin County Council supported the objection.
I have carefully considered the Statement to Ground an Application for Judicial Review and the Affidavits supporting the same. I can find nothing therein clearly to put the Respondents on notice of this issue. While the Affidavits filed refer to the purposes set out in An Bord Pleanála’s decision they do so in the context of failure to state a particular purpose. The difference in wording between the purpose set out in the Compulsory Purchase Order and the decision of An Bord Pleanála is not alluded to. I am satisfied that the objection is well founded. Accordingly I propose to deal with each of the four remaining non constitutional issues identified in turn.
THE FIRST ISSUE
A. Costs
The Planning and Development Act 2000 section 219 provides as follows –
“219(1) Where an oral hearing is held under section 218, the Bord may in its absolute discretion direct the payment of such sum as it considers reasonable by a local authority concerned in the oral hearing –
(a) to the Bord towards the costs incurred by the Bord in holding the hearing,
(b) to any person appearing at the hearing as a contribution towards the costs, other than the costs referred to in section 135, incurred by that person and the local authority shall pay that sum.”
An application for costs was made on behalf of the Applicant and that application was not dealt with in the decision of An Bord Pleanála. Counsel for the Applicant rightly points out that the discretion conferred upon An Bord Pleanála where an application for costs is made is to grant or deny costs but that it has no statutory power to ignore the application.
The practice of An Bord Pleanála appears from the Affidavit sworn on its behalf by Ellen Morrin on the 3rd July 2003 at paragraph 19 thereof. She acknowledges that An Bord Pleanála has not yet made any determination on the application for costs and deposes that it is the general practice of An Bord Pleanála to defer making any decision on the question of costs until after the expiration of the period during which the Bord’s substantive decision may be challenged by way of Judicial Review. While she does not say so I take it to be the case that if Judicial Review proceedings are instituted An Bord Pleanála defers its determination on the issue of costs until the final disposition of the same. However the decision of An Bord Pleanála does not record that its decision on the issue of costs has been adjourned: it is silent on the issue.
Counsel for An Bord Pleanála argues that the course adopted is a prudent one as should the Judicial Review application succeed it might well fall to An Bord to reconsider the Compulsory Purchase Order and in that sense in giving its decision on the appeal An Bord Pleanála is not functus officio. Should this occur An Bord Pleanála could then exercise its discretion in the light of all the circumstances then appertaining.
Section 219 does not expressly authorise An Bord Pleanála to defer or adjourn the exercise of its discretion in relation to costs to abide events outside the hearing with which it is dealing. I am satisfied that it has no such power and in doing so acted ultra vires. It is not necessary for me to decide whether An Bord Pleanála has power to adjourn its decision on costs in order to review matters directly appertaining to the appeal before exercising its statutory discretion. There are it seems to me good practical reasons why a decision on costs should not be unduly deferred. An objector attending before an enquiry could incur very substantial costs indeed as no doubt was the case here and it is appropriate that if he is to be reimbursed pursuant to section 219 that this should occur promptly. Again an objector advised that he has good grounds for applying for Judicial Review might be deterred from incurring the expense of so doing by uncertainty as to whether he will recoup any of the costs which he incurred in pursuing his objection. Indeed he might consider that the deferral holds over him in terroram the possibility of an adverse decision on his application for costs should he choose to apply for Judicial Review and so be dissuaded from so doing. By analogy with the practice of the Courts the discretion as to costs must be exercised judicially and in relation to reasons connected with the case: thus it would be an improper exercise of the discretion to exercise it on the ground of some matter wholly unconnected with the hearing: Campbell (Donald) & Co. Limited v Pollak 1927 AC 732.
The relief sought by the Applicant is a declaration as to his entitlement to an Order pursuant to section 219 of the Act of 2000 and/or an Order of Mandamus: I will hear Counsel as to the appropriate terms of an Order to be made.
B. Documents
The Planning and Development Act 2000 section 135(5) provides as follows –
“(5)(a) Subject to paragraph (b), the Bord in relation to an oral hearing of any appeal or referral may, by giving notice in that behalf in writing to any person, require that person to do either or both of the following:
(i) To attend at such time and place as is specified in the notice to give evidence in relation to any matter in question at the hearing,
(ii) to produce any books, deeds, contracts, accounts, vouchers, maps, plans, documents or other information in his or her possession, custody or control which relate to any such matter.”
The Inspector adjourned the oral hearing on its original start date of 16th April 2002 to enable the Applicant to be furnished voluntarily with relevant documents. Consequent on this seven folders of documents were made available to the Applicant through the Inspector. The oral hearing resumed on the 6th June 2002 when the Applicant requested a further adjournment and a direction from the Inspector under section 135 requiring Dublin County Council to produce further documents. Counsel on behalf of the Applicant sought information about any meetings which had taken place between Dublin City Council and any third party developer who might purchase the lands the subject matter of the CPO and also sought an adjournment. The information sought extended to discussions, correspondence, negotiations and minutes of such meetings which the Applicant was aware had taken place. The Inspector declined to adjourn the matter. He indicated that he proposed to proceed to hear evidence and expressed the view that the matters in respect of which further documentation had been sought could be raised in cross examination.
This issue is dealt with in the Applicant’s Pleadings as follows. The Statement to Ground Application for Judicial Review at paragraphs E28 and 29 pleads as follows –
“28 In the context of the compulsory acquisition of land, an objector must be afforded a full and meaningful right to challenge the proposed order. This extends, where necessary, to the discovery and production of documents. The purpose of such production and discovery is to allow the objector to make a fair challenge as to whether the acquisition of the land was necessary or required.
29 An Bord Pleanala acted in breach of fair procedures and/or in breach of the requirements of natural and constitutional justice in failing to exercise its powers under section 135 of the Planning and Development Act 2000 (as applied by section 218(4)) to direct that the Local Authority produce all relevant documents.”
Particulars
(i) As part of his written objection of the 25th January 2002 the Applicant had sought certain documents from the Local Authority. The initial reaction of the Local Authority was to state that it was under no legal obligation to provide such documents. Following further representations by the Applicant and a request under the Freedom of Information Act 1997 thereinafter documents were disclosed on a drip feed basis. In particular very important documentation in relation to an existing policy of the Local Authority in relation to compulsory purchase powers was not disclosed until well into the oral hearing.
(ii) In the circumstances the Applicant had a concern as to whether or not even at that late stage all relevant documentation had been disclosed. In particular the Applicant knew from his own records that there were certain documents which would appear to be relevant to the oral hearing which had not been disclosed by the Local Authority. In the circumstances the Applicant requested that An Bord Pleanála exercise its powers under section 315 of the Planning and Development Act 2000 (as applied by section 218(4)) to direct that the Local Authority produce all relevant documents and that this should be done by way of an Affidavit of Discovery. In particular the Applicant was anxious to have sight of all documents relevant to any contacts between officials of the Local Authority and any other potential developer of the lands.
(iii) Notwithstanding demand having been made to it on behalf of the Applicant An Bord Pleanála failed or neglected to exercise its powers under section 135. An Bord Pleanála also failed to give reasons as to why it did not exercise this power. Further in the alternative this gives rise to the inference that An Bord Pleanála did not consider the Applicant’s request in this regard properly or at all.”
The Affidavit of the Applicant grounding the application sworn on the 13th March 2003 deals with the request for documents at paragraph 13 thereof. Correspondence between the Applicant’s Solicitor and Dublin City Council is exhibited at Exhibit PC8.
The Applicant’s Solicitor wrote to Dublin City Council on the 10th April 2002 in the following terms: –
“Dear Sirs,
We refer to the above and to our objection document, copy of which was furnished to yourselves on the 24th January last. As An Bord Pleanála propose to hold the oral hearing without undue formality and without proving documents in relation to the Compulsory Purchase Order we require that the queries set out in our objection document are discharged prior to the hearing. We note we sought replies in our letter to you of the 24th January last. Please let us have the following information on the basis that we will reciprocate:-
1. Details of the names and the position within Dublin City Council or otherwise and qualifications of all parties who will give evidence on behalf of Dublin City Council.
2. Copies of all documents which will be relied upon.
3. Names of all witnesses you propose to call.
I look forward to hearing from you.
Yours faithfully,”
The objection document is at Exhibit PC6. Contained within the same is a request for information in nine numbered paragraphs none of which relate to documents. Dublin City Council replied to the letter of the 10th April 2002 on the same day and dealt with each of the nine queries raised. On the 12th April 2002 the letter from the Applicant’s Solicitor dated 10th April 2002 was replied to. The reply indicated the witnesses whom it was proposed to call and documents additional to those which had already been furnished which it was intended to produce: these were set out as follows:-
1. The O’Connell Street Integrated Area Plan together with details of the current planning permission on the site.
2. Minutes of the Monitoring Committee for the O’Connell Street I.A.P.
3. Book of photographs of the premises the subject of the CPO.
4. Booklet of correspondence with the Carlton Group.
The letter indicated that the documents were being assembled and would be forwarded as soon as this had been done. It appears from a letter dated 30th May 2002 from the Freedom of Information Officer that the documents had by that date been furnished to the Applicant’s Solicitor. By letter dated 31st May 2004 the Applicant’s Solicitor sought further documents being minutes of meetings and correspondence. Dublin City Council replied on the 5th June dealing with that request. That reply indicated that correspondence between Dublin City Council and the Applicant would not be furnished at that time, that some of the documents sought had already been circulated to the Applicant and that some of the documents sought had been mislaid. The remaining documents sought were furnished.
The oral hearing commenced on the 16th April 2002. It appears from the Inspector’s Report that the matter was adjourned on the application of Dublin City Council in the light of representations made by some of the objectors who were seeking to have particular information and documents made available to them, that the City Council was prepared to provide the information and documents and that the matter was adjourned to resume on the 5th June 2002: in fact the hearing resumed on the 6th June 2002. What transpired on that resumption is recorded by the Inspector as follows –
“Counsel on behalf of Mr. Clinton sought information about any meetings which had taken place between Dublin City Council and any third party developer who might purchase the land the subject of the CPO. This information would extend to discussions, correspondence, negotiations etc. Information was also sought in relation to minutes of meetings which were known to have taken place. The Inspector was invited to direct that unspecified documents be produced under section 135 of the Planning and Development Act 2000. The Inspector indicated that as he had not heard any evidence from any party he proposed to proceed to hear evidence when the objectors could raise the matter in cross examination or otherwise. The question of a further adjournment was raised but not conceded by the Inspector.”
Again from the Inspector’s Report it appears that on the third day of the oral hearing additional correspondence and documentation had just been made available by Dublin City Council and an objection with regard to discovery of documentation on that date was made on behalf of objectors (unspecified). An Affidavit on behalf of the City Council that no further documentation exists was sought. The documentation produced during the period of adjournment amounted to seven folders and required time to be considered. An application pursuant to the Planning and Development Act 2000 section 135(5) was made to the Inspector directed particularly to documentation in relation to discussions, meetings, contracts etc., between Dublin City Council and any potential or proposed developers of the land. The Inspector asked Counsel for Dublin City Council to consider the objections over the weekend. Following the weekend draft maps and reference books sought were made available. Dublin City Council continued to search for further documents which were being sought. The Inspector concluded that the documentation already furnished was sufficient to comply with the requirements of natural justice. The objection was repeated and it was submitted that documents relating to any contact between Dublin City Council and other potential developers were vital and while some documentation had been produced it appeared that further documentation may be available. The focus of the objection was on documents dealing with the reasons behind the making of the Compulsory Purchase Order.
The issue of documents was again raised before the Inspector in the course of the evidence given by witness Mr. McNamara: concern was expressed about delay in making documents available and of a large volume of documentation having been submitted quite late in the oral hearing, that the Inspector record submissions made on behalf of the Appellant in the course of closing submissions, that Nolan –v- Irish Land Commission requires that all documents be made available to allow objectors to make their case fully.
Further as the Applicant has identified documents missing from the file of Dublin City Council it may therefore be the case that other documents are missing. The Inspector was informed that an application was being made to An Bord Pleanála under section 135 of the Planning and Development Act 2000 in relation to possible missing documents.
The only further information available to me as to the request to be made to An Bord Pleanála pursuant to section 135 of the Planning and Development Act 2000 is contained in paragraph 81 of the Applicant’s Affidavit: the request was made orally during the course of closing submissions to the Inspector and also included as part of the written outline legal submission submitted on his behalf. In paragraph 83 of the Grounding Affidavit the Applicant notes that his request for documents was not dealt with in the decision of An Bord Pleanala.
Having considered such evidence as is available to me in relation to the application for documents I am satisfied that the focus of the Applicant’s request was to ascertain whether or not Dublin City Council had had discussions with other developers in relation to the development of the lands the subject matter of the CPO and the content of any such discussions.
My conclusions on this issue are as follows. The onus rests on the Acquiring Authority to satisfy An Bord Pleanála that the Compulsory Purchase Order should be confirmed. It is a matter for the objectors to establish the grounds of their objection. In this case Dublin City Council went to considerable length to supply the information and documents sought by the Applicant. I accept that this was done piecemeal and in some instances during the course of the oral hearing. Some documents were missing and could not be produced. These documents included correspondence and minutes of meetings. The Applicant’s focus in requesting documents was on the possibility that meetings had taken place between Dublin City Council and alternative developers for the site the subject matter of the Compulsory Purchase Order. If such meetings did take place it has not been made clear to me that they are of relevance to the oral hearing and the determination of An Bord Pleanála: as will appear later in this Judgment the means by which the Acquiring Authority proposes to achieve the statutory purpose for which it has made a Compulsory Purchase Order are not relevant to the enquiry. Neither has it been made clear to me how the absence of documents worked an injustice or operated to deny natural justice to the Applicant. It was at all times open to the Applicant to invoke the Planning and Development Act 2000 section 135. The section envisages an application not to the Inspector but to An Bord Pleanála and the only applications relying on section 135 made on the evidence before me are oral applications to the Inspector on the 6th June 2002 and in the course of closing submissions: the oral hearing had commenced on the 16th April 2002 but was then adjourned to Thursday the 6th June but in fact commenced on the 7th June and then proceeded for a total of nine hearing days. While objection had been raised in relation to documentation during the course of the oral hearing if the documentation was truly relevant and appropriate to be introduced before the Inspector one would have expected a formal application pursuant to section 135 of the Act of 2000 to have been made to An Bord Pleanála (and not to the Inspector) in advance of or in the course of the hearing well in advance of the concluding submissions and no such application was made.
In summary the Applicant has not satisfied me as to either of the following:-
1. The relevance of the documents relating to discussions if any between Dublin City Council and other developers. In this regard there is a distinction between the purpose of the Compulsory Purchase Order and the means by which the purpose is to be achieved: the latter is not relevant to the enquiry.
2. That it pursued its request for documents in the appropriate manner by applying to An Bord Pleanála to exercise its powers under section 135 of the Planning and Development 2000.
The Applicant has not satisfied me that there was a denial of natural justice in the manner in which its requests for documents were dealt with. Having regard to the manner in which the requests were pursued it would not have been appropriate for An Bord Pleanála to deal with the same in its decision: if an application was made to An Bord Pleanála its decision on that application would in the ordinary course be made and communicated independently of its decision on the Inspector’s Report and normally one would expect in advance of the enquiry and its decision on such an application would be amenable to Judicial Review.
THE SECOND ISSUE
The Applicant contends that the Compulsory Purchase Order is invalid in that it fails to state fully or accurately the purposes for which the same is being made. The Order of An Bord Pleanala recites that the Compulsory Purchase Order was made in pursuance of section 76 of and the Third Schedule to the Housing Act 1966 as extended by section 10 of the Local Government (No. 2) Act 1960 (as substituted by section 86 of the Housing Act 1966) and the Planning and Development Act 2000. Insofar as purposes are set out the Order of An Bord Pleanala it recites as follows –
“And whereas An Bord Pleanala has concluded that the acquisition by the local authority of the lands included in the Order is necessary for the purposes of facilitating the implementation of the Dublin City Development Plan and that the said objections cannot be sustained against the said necessity.”
The Compulsory Purchase Order itself gives as its purpose “development purposes”.
The background to the making of the Compulsory Purchase Order is set out in the Report of the Inspector at paragraph 3.6.1 as follows –
“The background to the making of the CPO is the desire of the Council to regenerate Dublin City. Integrated Area Plans are the vehicles used to secure regeneration. These are intended to facilitate private public investment in selected areas. The first of these was formulated in 1996 and included the west side of O’Connell Street. The HARP Plan (Historic Area Rejuvenation Plan) had set the scene for the O’Connell Street Integrated Area Plan which provides for the regeneration of O’Connell Street area and is expected to cost €60m. The Area Plan was accepted by the Council in 1998 and was effectively adopted in the 1999 Development Plan. The planning permission on the site the subject of the CPO was granted in 1999 to the Carlton Group. The permission appears to the City Council to be going nowhere. The urban regeneration of O’Connell has been held up and requires to be commenced and the City Council felt it had to resort to the compulsory acquisition of the site to secure its development. The inability of the owners to develop the site appears to be due to a division in the ownership and lack of experience in relation to development together with the lack of financial ability. The City Council had been waiting for the development to take place having given many warnings to the owners. In the absence of progress over a four year period the City Council decided to make the CPO.”
The O’Connell Street Integrated Area Plan considered O’Connell Street as important as the Champs Elysees in Paris or the Unter den Linden in Berlin and that it should be in itself an attraction in like manner to the great streets of other major cities. To achieve this required an integrated approach which is detailed in the Plan.
The Plan envisaged the creation of a route from O’Connell Street to Moore Street through Site Cluster 1 and the development of up to 50,000 square metres of mixed use development. The Dublin City Development Plan 1999 at paragraph 5.8.0 provides that it is a policy objective of the Planning Authority to implement an Integrated Area Plan for O’Connell Street and environs. Again under policies at paragraph 11.5.0 it is stated as a policy to implement the O’Connell Street Integrated Plan.
Statutory provisions relevant to the power to make a Compulsory Purchase Order are the following –
The Planning and Development Act 2000 section 212(1)
(1) A planning authority may develop or secure or facilitate the development of land and, in particular and without prejudice to the generality of the foregoing may do one or more of the following:
(d) Provide, secure or facilitate the provision of areas of convenient shape and size for development.
(e) secure, facilitate or carry out the development and renewal of areas in need of physical, social or economic regeneration and provide open spaces and other public amenities.
(3) A planning authority may, in connection with any of its functions under this Act, make and carry out arrangements or enter into agreements with any person or body for the development or management of land, and may incorporate a company for those purposes.
(4) A planning authority may use any of the powers available to it under any enactment, including any powers in relation to the compulsory acquisition of land in relation to its functions under this section and in particular in order to facilitate the assembly of sites for the purposes of the orderly development of land.
Section 213(1)
(1) The power conferred on a local authority under any enactment to acquire land shall be construed in accordance with this section.
(2)(a) A local authority may for the purposes of performing any of its functions (whether conferred by or under this Act, or any other enactment passed before or after the passing of this Act), including giving effect or facilitating implementation of its development plan or its housing strategy under section 94 do all or any of the following:
(i) Acquire land, permanently or temporarily, by agreement or compulsorily,
And the performance of all or any of the functions referred to in sub paragraphs (i), (ii) and (iii) are referred to in this Act as an “acquisition of land”.
(3)(a) The acquisition may be effected by agreement or compulsorily in respect of land not immediately required for a particular purpose if, in the opinion of the local authority the land will be required by the authority for that purpose in the future.
(b) The acquisition may be effected by agreement in respect of any land which in the opinion of the local authority it will require in the future for the purposes of any of its functions notwithstanding that the authority has not determined the manner in which or the purpose for which it will use the land.
(c) Paragraphs (a) and (b) shall apply and have effect in relation to any power to acquire land conferred on a local authority by virtue of this Act or any other enactment whether enacted before or after this Act.
4. A local authority may be authorised by Compulsory Purchase Order to acquire land for any of the purposes referred to in sub-section (2) of this section and section 10 (as amended by section 86 of the Housing Act 1966) of the Local Government (No. 2) Act 1960 shall be construed so as to apply accordingly and the reference to “purposes” in section 10(1)(a) of that Act shall be construed as including purposes referred to in section (2) of this section.
The Applicant contends that the purpose set out in each of them the Compulsory Purchase Order and in the Order of An Bord Pleanala is insufficient in that no concrete plan for the development of the lands to be acquired exists or is identified. Accordingly the land the subject of the CPO is “land not immediately required for a particular purpose” within the meaning of section 213(3)(b). The identification of a general statutory function, it is argued, is insufficient for the purposes of a Compulsory Purchase Order and the statute requires identification of a particular development otherwise land can only be acquired by agreement under section 213(3)(b) of the Act of 2000.
I am satisfied that the meaning to be ascribed to “particular purpose” in section 213(3)(b) is to be found in a consideration of section 213 of the Act of 2000 as a whole. Section 213(2) contains the phrase “for the purposes of performing any of its functions”. Section 213(4) also refers to “purposes” in its reference to section 10(1)(a) of the Local Government (No. 2) Act 1960 section 10 as substituted by section 86 of the Housing Act 1966. “Purposes” in section 10 as substituted is part of a phrase – “purposes for which they are capable of being authorised by law to acquire land compulsorily”. It is clear that in section 213(1) and (4) of the 2000 Act and section 10 of the 1960 Act “purposes”refers to statutory purposes and not as is suggested by the Applicant to a particular scheme of development intended to be pursued that is to means of achieving the statutory purpose. I can find no indication that the phrase “particular purpose” in section 213(3) should be accorded any different meaning than statutory purpose and I am satisfied that the same refers to a particular statutory purpose. I am fortified in this view by the circumstance that section 213(3)(b) clearly distinguishes purpose and means.
Section 213(3)(b) provides in relation to land which in the opinion of the local authority it will require in the future for the purposes of any of its functions the same can be acquired by agreement notwithstanding that the authority has not
(a) determined the manner in which it will use the land or
(b) the purpose for which it will use the land.
The Applicant’s contention is that as there is no concrete plan for the development of the site it is not required for a particular purpose and therefore can only be acquired under section 213(3)(b) by agreement. For this argument to succeed it seems to me that it would be necessary to read into the provisions of section 213(3)(b) the words “the particular” and thereby alter the meaning of purpose in that provision.
The Applicant further argues that by providing in section 213(3)(b) that there is no requirement for a purpose for which the Acquiring Authority will use the land suggests that such a purpose is necessary if compulsory purchase powers are to be exercised. I do not find support for the Applicant’s argument in section 213(3)(b) which enables an authority to acquire lands which it will require in the future by agreement, in effect to create a land bank, notwithstanding that it has not determined how it will use the land or for which of its statutory purposes it will use the land. If the legislature required that a Compulsory Purchase Order in addition to stating the statutory purpose it is necessary to state the manner in which the same will be achieved in relation to lands to be compulsorily acquired it would have said so in section 213(2) by referring in addition to the purposes of performing any of its functions expressly referring to the manner in which the land would be used for the purposes of performing any of its functions and the legislature have not done so.
In urging on me the construction for which the Applicant contends Counsel relied upon the Constitution Article 43.1 and 40.3.3 in relation to the rights to private property and the history and development of the law in relation to compulsory purchase as exemplified in cases prior to the enactment of the provisions with which I am concerned. I readily accept that the making of a Compulsory Purchase Order is an interference with an objector’s constitutionally protected rights. Again I accept as a correct statement of the law a passage from Kelly The Irish Constitution (Fourth Edition) para 7.7.88 –
“As an important preliminary point, it is submitted that it follows from Article 43.1 that compensation cannot validate an interference with property rights that is not justified by the exigencies of the common good. Any other view would mean that Article 43 merely guarantees a right to compensation rather than a right to property per se.”
The balancing of the constitutional right and the exigencies of the common good is a matter for An Bord Pleanala. I accept the comments of Budd J. in An Blascaod Mór v Commisisoners of Public Works (No. 3) Unreported 27th February 1998 as a correct statement of the law as to the approach which An Bord Pleanala should take in considering a Compulsory Purchase Order where he stated –
“The word “exigencies” has a connotation of more than useful and, “reasonable” or “desirable”; it means “necessary” and implies the existence of a pressing social need. The notion of necessity is linked to that of a democratic society. A measure cannot be regarded as necessary in a democratic society, based on tolerance and broad mindedness, unless it is proportionate to the legitimate aim being pursued.”
However the exhibits before me satisfy me that in this case at the public enquiry there was ample evidence before the Inspector to enable the Inspector in his Report and An Bord Pleanala in reaching its decision to carry out the appropriate balancing exercise and have regard to proportionality and there is nothing to suggest that they did not do so. Had this not been done a remedy in Judicial Review would be available. Having regard to the statutory provisions which provide for a public enquiry at which both the exigencies of the common good and proportionality can be addressed (and if not properly addressed the availability of access to the Courts) I do not accept the Applicant’s argument that it is incumbent on the Court to construe section 213 and the word “purposes” as requiring a specific development as opposed to a particular statutory purpose to be stated as the reason for the Order confirming a Compulsory Purchase Order.
Further as I am satisfied that the construction of section 213 is clear it would be inappropriate to have regard to the cases cited dealing with earlier and different statutory provisions which conferred powers of compulsory acquisition.
In summary I am satisfied that section 213 in referring to “purposes” refers to statutory purposes and that accordingly the purpose set forth in the Order of An Bord Pleanala sought to be impugned is sufficient.
Further I am satisfied that “purpose” having that meaning the land the subject matter of the CPO is required for a present purpose – that of development and not for a future indefinite purpose as envisaged by section 213(3)(b).
THE THIRD GROUND
The Order of An Bord Pleanala excluded plots 1, 2, 11 and 12 from the Compulsory Purchase Order as confirmed. Further parts of Moore Lane to the rear of plots number 1, 2, 11 and 12 were omitted from the proposed extinguishment of the right of way over part of Moore Lane.
The reason given in respect of the first exclusion is as follows –
“Reason: the plots in question are not considered necessary to facilitate the implementation of the Dublin City Development Plan”.
The reason given in respect of the second exclusion is as follows –
“Reason: in order to allow continued access to the rear of properties not part of the Compulsory Purchase Order as confirmed”.
Plot 1 is Fingal County Council Offices and Plot 2 an adjoining site and which are situate to the north of the lands comprised in the Compulsory Purchase Order each extending from O’Connell Street to Moore Lane. Plot 12 is an ESB substation situate to the rear of plot 1 and fronting on to Moore Lane. Plot 11 is No. 57 O’Connell Street and is to the south of that part of the lands comprised in the CPO stretching from O’Connell Street to Moore Lane.
I fully accept that there is an obligation on An Bord Pleanala to give reasons. Counsel for the Applicant in argument accepted that where An Bord Pleanala endorses the decision of the Inspector any want in particularity in the reasons given can be supplied by reference to the reasoning process in the Inspector’s Report. However it is argued where the Inspector’s Report is not accepted then reasons for the divergence must be furnished. In this case the Inspector’s Report has not been accepted. The Report at paragraph 5.0 recommends as a reason for the Board’s decision –
“It is considered that the Compulsory Acquisition of the lands would:-
(a) secure the early development of the lands,
(b) ensure that any such development would be in accordance with the proper planning and sustainable development of the area.
The reason given by An Bord Pleanala was as follows –
“An Bord Pleanala has concluded that the acquisition by the Local Authority of the lands included in the Order is necessary for the purposes of facilitating the implementation of the Dublin City Development Plan and that the said objections cannot be sustained against the said necessity”.
In relation to Moore Lane the Inspector’s recommendation as to the schedule to the Order is as follows –
“Prior to the making of an Extinguishment Order by Dublin City Council an alternative servicing arrangement (in place of the existing public right of way) shall be agreed between the objecting parties as represented at the Oral Hearing and Dublin City Council or, in default of agreement should be determined by An Bord Pleanala.
Reason: It is considered reasonable to make provision for an alternative servicing arrangement.”
The Order made by An Bord Pleanala was in the following terms –
“Those parts of Moore Lane to the rear of plots numbers 1, 2, 11 and 12 shall be omitted from the proposed extinguishment of the public right of way over part of Moore Lane.
Reason: In order to allow continued access to the rear of properties not part of the Compulsory Purchase Order as confirmed.”
The Applicant argues that An Bord Pleanala cannot call in aid the Inspector’s Report to expand upon the reasons given where the same differ from those recommended by the Inspector. In support of this the Applicant relies upon Ni Eili v EPA Supreme Court Unreported 30th July 1999 and O’Keeffe v An Bord Pleanala 1993 1 I.R. 39. The Applicant refers first to a passage in O’Keeffe at page 61 taken from The State (Creedon) v Criminal Injuries Compensation Tribunal (1988) I.R. 51 and cited with approval –
“I feel I should add that for a Tribunal of this nature even though it is not of statutory origin and was set up by an administrative decision by the Government, to reach a conclusion rejecting in full the claim of the Applicant before it and not to give any reason for that rejection is not an acceptable and proper form of procedure.
Once the Courts have a jurisdiction and if that jurisdiction is invoked, an obligation to enquire into and if necessary, correct the decisions and activities of a Tribunal of this description, it would appear necessary for the proper carrying out of that jurisdiction that the Court should be able to ascertain the reasons by which the Tribunal came to its determination. Apart from that, I am satisfied that the requirement which applies to this Tribunal, as it would to a Court, that justice should appear to be done, necessitates that the unsuccessful applicant before it should be made aware in general and broad terms of the grounds on which he or she has failed. Merely, as was done in this case, to reject the application and when that rejection was challenged subsequently to maintain a silence as to the reason for it, does not appear to me to be consistent with the proper administration of the functions which are of a quasi judicial nature.”
In O’Keeffe An Bord Pleanala was advised by its Inspector to refuse permission but rejected that advice. The reason for its decision given was that the proposed development would not be contrary to the proper planning and development of the area.
The Supreme Court however on appeal held that the expert evidence in the Reports before the Board contained ample material on all issues as to the proper planning and development of the area which would justify rejection by the Board of the Report’s conclusions and that the Board’s decision as notified coupled with the detailed conditions attached to the decision and the reasons for each condition constituted an adequate discharge of the Board’s statutory duty to state the reasons for its decision. While Costello J. held that the decision was ultra vires upon the basis that there were no minutes or other documents to enable a Court to be apprised of the reasons for the decision not to accept the Inspector’s recommendation the Supreme Court did not. Finlay C.J. at page 76 said –
“Firstly I am satisfied that there is no substance in the contention made on behalf of the Plaintiff that the Board should be prohibited from relying on a combination of the reasons given for the decision and the reasons given for the conditions together with the terms of the conditions. There is nothing in the statute which would justify such a rigid approach and it would be contrary to common sense and to fairness. What must be looked at is what an intelligent person who had taken part in the appeal or had been apprised of the broad views which had arisen in it would understand from this document, these conditions and these reasons. Approached in that way I am satisfied that the entire of this document sufficiently identifies the reasons by which the Board reached their decision to grant the particular planning permission subject to the particular conditions.”
It seems to me that while the decision in O’Keeffe was based on the reason given in the permission and the conditions attached the same reasoning applies where as here the Applicant has taken part in the appeal and is fully aware of the issues which had arisen. In this case it is common case that central to the hearing were a number of matters –
1. The desire of Dublin City Council that the area in question should be developed.
2. The concern that the Applicant would be unable to develop pursuant to the planning permission whether by reason of lack of expertise, lack of funds or non availability of the entire site the subject matter of the planning permission.
3. At the hearing the Development Plan and the Integrated Area Plan (one of the objectives of the Development Plan) were widely canvassed. On reading the evidence led before the hearing by Dublin City Council it was clearly open on that evidence to arrive at the reason given by An Bord Pleanála. When one compares the reason given by An Bord Pleanala with those suggested by its Inspector and acknowledging fully the difference in phraseology I am not satisfied that there is any difference in substance between the two. Can there be any difference in substance between ensuring that the redevelopment of the lands would be in accordance with proper planning and sustainable development of the area and facilitating the Dublin City Development Plan?
The other difference is that the Inspector recommended as a reason that the Compulsory Purchase Order would secure the early redevelopment of the lands. The assessment of the Inspector was that there were many obstacles to this being achieved by the Applicant: see paragraph 4.7 of the Inspector’s Report. The planning permission which has been obtained could not now be built on as the owner of the Fingal County Council premises did not then wish to be part of the project for which planning permission had been obtained. Notwithstanding considerable progress having been made by the Applicant in advancing his project such advancement could not occur without a development partner and the Applicant had been unable to procure one. The Inspector identified an urgent and identifiable need to redevelop the lands in whole or in part and concluded that given the key and critical location of the site with frontage on O’Connell Street it is imperative that early development of the site should occur and as the landowners appear to be unable to secure such development in a reasonable or indeed any timescale he recommended confirmation of the Compulsory Purchase Order. Thus while in his recommendation of reasons the Inspector referred to the reasonable rather than to any timescale his assessment encompassed both. On considering the Report it was open to An Bord Pleanala to focus on the assessment that development could not be secured in any timescale in which event they were entitled to disregard the suggested reason based on delay.
It seems to me therefore that in considering the reason given the Court is entitled to have regard to the documents before An Bord Pleanala. The Court may have regard to the fact that the Applicant was actively involved in the enquiry and fully aware of the matters there canvassed and had made available to him the Report of the Inspector. In these circumstances I am satisfied that the reasons given insofar as there is any substantive difference between the recommendation of the Inspector as to reasons and the reasons actually given both are justified by the assessment of the Inspector. In these circumstances following the approach adopted by Murphy J. in Ni Eili v the Environmental Protection Agency and having regard to the Inspector’s Report as was done in that case An Bord Pleanala were entitled to conclude that development of the lands in question could not take place by the Applicant and not to adopt the Inspector’s suggestion based on delay. In these circumstances I am satisfied that the reasons given by An Bord Pleanala when read in conjunction with the Inspector’s Report are sufficient. While Counsel submitted that in the Ni Eili case the Report of the Inspector was adopted it was not in fact adopted in total in that there was an extension to the suggested compliance date for lower emission limit values.
The Applicant raises a further point. In effect this is the point sought to be raised as the Fourth Issue. On objection by the Respondents I ruled that the same did not come within the grounds in respect of which leave was given. In short the statutory purpose of the Compulsory Purchase Order was a statutory purpose within section 212 of the Planning and Development Act: the statutory purpose for which the Compulsory Purchase Order was confirmed is a section 213 purpose – see section 213(2). Proctor & Gamble Limited v Secretary of State for the Environment and Others 63 P & CR 317 is authority for the proposition that a Compulsory Purchase Order made for one purpose cannot be confirmed for another. The purpose given in the Compulsory Purchase Order is “for development purposes”: this would appear to relate to section 212(1)(d)(e).
The Applicant relies as authority on Proctor & Gamble Limited v Secretary of State for the Environment & Others 63P and CR 317. A very large area to the east of Newcastle on Tyne was designated as an urban development area and the Tyne and Weir Development Corporation was constituted the Planning Authority for the area. The Planning Authority made a Compulsory Purchase Order for an area of twelve acres part of the urban development area and within which was a property owned by Proctor & Gamble Limited which fronted onto City Road. The Planning Authority held a competition for proposals for redevelopment. The winning proposal received planning permission. The Planning Authority made a Compulsory Purchase Order “for the purpose of securing the regeneration of part of the Tyne and Weir development area” and subsequently issued a statutory statement of reasons which was served on the objectors. There was no statement of any need to widen City Road or to take any part of the land of Proctor & Gamble Limited for that purpose. Following the making of the Compulsory Purchase Order the local Highway Authority made objections to the highways aspect of the developer’s proposal and the Tyne and Weir Development Corporation agreed that part of the land to be acquired would be made available for the purposes of improving City Road. Proctor & Gamble Limited objected to the Compulsory Purchase Order and a public enquiry was held. The Inspector found that the road improvements were reasonably necessary to secure the regeneration of the area in that they were the subject of detailed negotiations and agreement between the Tyne & Weir Development Corporation and Newcastle City Council. Proctor & Gamble Limited applied to have that part of the Order which affected their lands quashed on the grounds that the Order was confirmed for a purpose different from or additional to that for which it was made namely for a scheme of highway improvement to facilitate the development of sites within the urban development area. The decision on the application is dealt with in the head note to the Judgment in the following terms –
“Held, dismissing the appeal, a Compulsory Purchase Order which had been made for one purpose could not lawfully be confirmed for another purpose or for a purpose additional to that for which it was made. It was necessary, therefore, to identify the actual purpose for which the Order had been made. On the facts of the present case, the purpose for which the Order was made was the regeneration of East Quayside area which was within the scope of the statutory power given to the Development Corporation. It was not made for the purpose of implementing the scheme for which planning permission was given. The Inspector had concluded that the highway improvements were necessary to achieve the regeneration of East Quayside. The purpose for which the Order was confirmed, namely the regeneration of East Quayside was therefore the same as that for which the Order had been made, although the means by which that purpose was now to be achieved namely by the highway improvements had changed between the making of the Order and the confirmation of the Order. It followed that the Order was lawful as it was confirmed for the purpose for which it was made and the highway improvements scheme was not an irrelevant consideration. There was ample evidence before the Inspector on which he could come to the conclusion that the highway improvements were necessary for the regeneration and that the Highway Authority would oppose the Order unless they were made. Further the Local Government Planning and Land Law Act 1980 empowered the Urban Development Corporation to acquire land compulsorily within its area for the purpose of securing the regeneration of part of its area. The greater includes the less.”
In applying the decision in Proctor & Gamble Limited it is necessary first of all to look at the purpose stated in the Compulsory Purchase Order, the reasons recommended by the Inspector and the reasons given by An Bord Pleanala. The purpose stated in the Compulsory Purchase Order is “for development purposes”. The reasons recommended by the Inspector are as follows namely two
– Secure the early development of the lands.
– Ensure that any such development would be in accordance with the proper planning and sustainable development of the area.
The reasons given by An Bord Pleanala is for the purpose of facilitating the Dublin City Development Plan.
In determining this issue it is appropriate to have regard to all the material which was before the Board and which is contained in the Inspector’s Report: this approach which was adopted in Proctor & Gamble Limited is in accordance with the decision of the Supreme Court in O’Keeffe v An Bord Pleanala 1993 1 I.R. 41.
Mann J. in the course of his Judgment at page 324 said –
“Despite the absence of authority I have no hesitation in thinking that a Compulsory Purchase Order made for one purpose cannot lawfully be confirmed for another purpose or for a purpose additional to that for which it was made. Confirmation is the ratification by the Confirming Authority of what the Acquiring Authority have resolved to do.”
Again at page 325 in dealing with the decision in Mearvale Builders Limited v Secretary of State for the Environment (1978) 36 P & CR 87 at p95 he said –
“The decision shows that the Courts can look behind the express purpose of both making and confirming an order to identify on the evidence the actual purpose which axiomatically must be one within the purpose for which the power to make and confirm is granted.”
Mann J. rejected a submission on behalf of Proctor & Gamble that as a matter of law the purpose must be not merely within but must also be the same as that for which the power is conferred regardless of the purpose promoted by the Acquiring Authority. He then identified the task which faced him namely to determine whether the purpose of the Compulsory Purchase Order was the regeneration of part of the Tyne and Weir urban development area or the implementation of the scheme for which planning permission was granted. If the latter was the purpose then Proctor & Gamble Limited would succeed because the widening of City Road was incompatible with the approved layout. His finding was in effect that the purpose of the Compulsory Purchase Order had not changed but between the making and confirmation the means of achieving the expressed purpose had changed from the approved scheme of development to road improvement.
In this jurisdiction in Crosby v Custom House Dock Development Authority 1996 2 I.R. 533 the same approach was adopted in that it was held that there was a distinction between the purposes for which an Authority might seek to acquire land and the means by which those purposes might be achieved.
Within the Inspector’s Report there is abundant evidence as to the background to the making of the Compulsory Purchase Order. At paragraph 3.6.1 this is given as the desire of Dublin City Council to regenerate Dublin City. It refers to the Integrated Area Plan accepted by Dublin City Council in 1998 and adopted into the 1999 Development Plan. The urban regeneration of O’Connell Street has been held up and requires to be commenced and the City Council felt it had to resort to the compulsory acquisition of the site to secure its development. There was an inability by the owners to develop the site due to division in the ownership and lack of experience in relation to development together with the lack of financial ability. The City Council had been waiting for the development to take place having given many warnings to the owners. In the absence of progress over a four year period the decision was made to compulsorily acquire the site. Within the summary of the evidence before the Inspector there is ample evidence to justify the City Council’s conclusion that resort to compulsory acquisition of the site was necessary. The Integrated Area Plan envisages O’Connell Street being developed from what was regarded as its downgraded status to a street comparable with the principal streets of other European capitals. The lands the subject matter of the Compulsory Purchase Order were considered in great detail in the Integrated Area Plan being contained within Site Cluster 1 therein. The evidence of Mr. Mulcahy, Valuer on behalf of the Acquiring Authority was that the dynamics for achieving development require unitary ownership a situation in which decision making is possible without constraints of lesser interests, proven development expertise and the ability to raise development capital: if development was to be achieved compulsory acquisition is necessary. The particular manner in which the purpose would be achieved had not yet been determined. If the Compulsory Purchase Order is approved development could start quickly. Thus the phrase “development purposes” was fleshed out in very considerable detail at the enquiry.
The Development Plan has as an objective at 5.8.0 the implementation of an Integrated Area Plan for O’Connell Street and its environs. Again as a policy at Policy IC3 paragraph 11.5.0 provides as follows –
“It is the policy of Dublin Corporation to implement the five Integrated Area Plans as follows –
(b) O’Connell Street.”
In these circumstances while the purpose as stated in the Compulsory Order is “for development purposes” and the purpose as stated in the decision of An Bord Pleanala is that of facilitating the Dublin City Development Plan when these purposes are considered in conjunction with the contents of the Inspector’s Report they are in effect identical. The Court, as held in Mearvale Builders Limited and confirmed in Proctor & Gamble Limited can look behind the express purpose of both making and confirming a Compulsory Purchase Order to identify the actual purpose: in the present case the actual purpose is one for which there is power to make and confirm a Compulsory Purchase Order.
If the acquiring authority possesses a statutory power to acquire then the function of An Bord Pleanála and on Judicial Review of this Court is to determine if the exercise of the power is for a purpose for which the power is conferred. Such statutory power is to be found in the present case within the Planning and Development Act 2000 section 212(1)(d) and (e) and in section 213(2)(a).
In summary then I am satisfied that the purpose set out in the Compulsory Purchase Order and the purpose set out in the decision of An Bord Pleanala is the same purpose: that purpose is one which enables a compulsory purchase order to be made and confirmed.
THE FIFTH ISSUE
The Applicant complains that the Compulsory Purchase Order was confirmed without evidence being adduced by Dublin City Council. In consequence the Applicant was unable to test the manner in which the general statutory purpose identified in the Compulsory Purchase Order and supporting documents was to be achieved. Further An Bord Pleanala was without evidence as to the manner in which the general statutory purpose is identified in the Compulsory Purchase Order and the supporting documents was to be achieved.
As to the manner in which the general statutory purposes identified in the Compulsory Purchase Order were to be achieved I am satisfied that abundant evidence was adduced before the Inspector as to the purpose: it is unnecessary that the means by which that statutory purpose will be achieved be determined in advance of the making of the Compulsory Purchase Order: Proctor & Gamble Limited v Secretary of State for the Environment & Others 63 P & CR 317. This issue arose in Crosby v Custom House Dock Development Authority 1996 2 I.R. 331. One of the grounds relied upon by the Applicant there in seeking to quash the Minister’s confirmation of a Compulsory Purchase Order was that during the public enquiry it became apparent that the Defendant did not know at that stage what use if any they would make of the land. Costello P. held that the Acquiring Authority was not required to limit its purpose for acquisition to a particular proposed development. I am satisfied that this applies equally in the present case: a distinction between purpose and the means of achieving the same must be drawn. This applies equally to the decision of the Acquiring Authority to make the Compulsory Purchase Order and to the decision of An Bord Plenala to confirm the same.
As to the remainder of this ground as expounded by Counsel on behalf of the Applicant the point sought to be made is that An Bord Pleanala confirmed the Compulsory Purchase Order without any evidence of any specific proposal. This again returns to the proposition that in addition to a purpose an Acquiring Authority must at the enquiry be in a position to indicate a specific proposal which can then be tested by the objectors. However the argument is refined in that the Applicant argues that the Acquiring Authority must at least select one of the means whereby the purpose can be achieved – developing it themselves, putting it out to tender or entering into an agreement whereby they sell the lands acquired to an individual developer.
I can see no logically reason to distinguish between means in the sense of the particular development to be carried out or the process to be utilised in ensuring that development is carried out be that by way of the Acquiring Authority itself carrying out the development, selling the land to a developer, or engaging in a public private partnership. These are simply different aspects of means which on authority of Proctor & Gamble Limited and Crosby v Custom House Dock Development Authority are each irrelevant at the stage of acquisition.
The Constitutional Issue
The constitutional issue is pleaded in the Statement to Ground Application for Judicial Review as follows. The relief sought –
“8. In the alternative a Declaration that the provisions of Part XIV of the Planning and Development Act 2000 are invalid having regard to the provisions of the Constitution.”
The grounds relied upon are as follows –
Strictly in the alternative to the foregoing pleas, it is the Applicant’s case that if the legislative provisions in respect of the compulsory acquisition of lands allow for the acquisition of lands other than in circumstances whereas a very minimum (i) there is a mandatory requirement that the acquiring authority demonstrate that there is a countervailing public interest which justifies the use of compulsory purchase powers; (ii) the question of whether or not there is such a countervailing public interest is to be determined either by the High Court or by an independent person or body subject to a heightened standard of review by the High Court; (iii) the owner of the land is to be afforded a meaningful opportunity to make submissions and representations at an oral hearing as to why his land should not be acquired compulsorily (to include the concomitant right to fair procedures, extending to the right to advance and detailed notice of the reasons put forward in support of the compulsory acquisition; the right to discovery and the production of documents; and the right to cross examination); and (iv) that the use of the land acquired be confined to the particular purpose in respect of which the independent determination at (ii) above was made then such provisions are unconstitutional.
Under the Constitution, private property rights are expressly protected and the exercise of a power of compulsory purchase represents a prima facie interference with those rights. The use of such an exceptional power must accordingly, be justified by reference to the common good. More particularly the acquiring authority must be in a position to demonstrate that there is a countervailing public interest which justifies the use of compulsory purchase powers.
The Applicant was at all material times the owner of certain of the lands the subject matter of the confirmed Compulsory Purchase Order (the nature and extent of the lands owned by the Applicant are set out in the Schedule of Lands hereto). The right to retain those lands form part of the Plaintiff’s property rights, as protected by Article 40.1 and 3 and Article 43 of the Constitution. Any exercise by the State, or any agency authorised by the State, of a power of compulsory purchase over the said lands, can only arise in circumstances where, having regard to the public good, same is justified. Even where same is justified in principle, the extent to which the property rights are interfered with must, so as to comply with the principles of proportionality, be both proportionate to the ends intended to be achieved thereby, and interfere with the Applicant’s property rights to no greater extent than that which is necessary for the purpose of achieving such end.
The provisions of the Local Government (No. 2) Act 1960; the Housing Act 1966; and Part XIV of the Planning and Development Act 2000 are invalid having regard to the provisions of the Constitution in that the said provisions purport to allow for compulsory purchase of the Applicant’s lands other than pursuant to a scheme with the safeguards identified at paragraph 39.”
The Pleadings also raise as a constitutional ground at paragraph 20 the following –
“20. The citizens constitutionally protected property rights cannot be overridden simply on the payment of compensation. It is a necessary precondition of the acquisition of, and/or extinction of, any property right of the citizen that would be bona fide considered and, if necessary demonstrated either by statute or by the determination of the relevant acquiring authority, and confirmed by an independent review, that the public interest requires that the citizen be deprived of the property in question (even on payment of fair compensation).”
The relevant provisions of the Constitution are the following –
Article 40.3.2. The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name, and property rights of every citizen.
Article 43.1.1. The State acknowledges that man, in virtue of his rational being, has the natural right, antecedent to positive law, to the private ownership of external goods.
1. The State recognises, however that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.
2 The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.
It is submitted by the Applicant that if effect is to be given to the provisions of the Constitution in the context of a Compulsory Purchase Order before confirming the Order An Bord Pleanála must be satisfied that the acquisition is required by an exigency of the common good and in order to be so satisfied the acquiring authority must put forward for consideration by An Bord Pleanála the purpose of the acquisition and the manner in which the land required is proposed to be used. The Applicant however lays particular stress on the words “requires” and “exigencies” in Article 43.1.2 of the Constitution as imposing upon a body seeking to interfere with property rights and a requirement to show not just a necessity but something which is demanded for the common good: see An Blascaod Mor Teoranta & Others –v- the Commissioners of Public Works in Ireland & Others Budd J. 27th February 1998 at page 110 et seq –
“The following inferences can be drawn in respect of the principles of law from the cases. In order to ascertain the constitutionality of the 1989 Act, the Court must ask
(1) Whether this delimitation, the restriction on the rights of enjoyment of private property, is in accordance with the principles of social justice and
(2) whether the delimitation, in this case involving expropriation with compensation, is necessary in order to reconcile the exercise of the Plaintiff’s property rights with the exigencies of the common good.
Furthermore these questions must be examined against the background of the presumption of constitutionality and the margin of tolerance allowed to the Oireachtas in making the assessment of what is required to fulfil the exigencies of the common good. In this regard the word “exigencies” has a connotation of more than “useful”, “reasonable” or “desirable”: it means “necessary” and implies the existence of a pressing social need. The notion of necessity is linked to that of a democratic society. A measure cannot be regarded as necessary in a democratic society, based on tolerance and broad mindedness, unless it was proportionate to the legitimate aim being pursued. Furthermore, when the exigencies of the common good are called in and justify restrictions on the exercise of the rights of private property, being fundamental rights spelt out in the Constitution, it should be remembered that the protection of the fundamental right, is one of the objects which needs to be secured as a part of the common good. Has a pressing social need been demonstrated which justify the impugned legislation and its encroachment on the basic rights of private property? Is the amount of the encroachment proportionate to a legitimate aim being pursued and to the difference in the Plaintiff’s situation which requires the delimitation of their rights.”
From that case I take the following propositions. The delimitation of private ownership to be valid must be reconcilable with the exigencies of the common good and with the principles of social justice. There must be a sufficient and proper public purpose for the acquisition and which purpose cannot be achieved by lesser means.
Further the margin of appreciation allowable to the Oireachtas where fundamental rights to private property are concerned is not as wide as in cases such as MacMathuna –v- Ireland and the Attorney General (1995) 1 I.R. 484 and Madigan –v- The Attorney General (1986) ILRM 136 which concern the allocation of social welfare allowances and taxation respectively. The Applicant further submitted and I accept that it follows from Article 43.1.1 that compensation cannot validate an interference with property rights that is not justified by the exigencies of the common good: the right to private property cannot be equated with a right to compensation. It is submitted by the Applicant and I accept that the principle of proportionality applies to the exercise of the constitutional power to delimit the right to property.
From the Pleadings it is clear that the Applicant challenges in its entirety the Planning and Development Act 2000 Part XIV. The challenge however in argument was more focused and I propose to deal with the same on the basis advanced in argument.
Turning to the Ground at paragraph 20 of the Statement to Ground Application for Judicial Review I do not understand it to have been in contention between the parties that the mere existence of an entitlement to compensation would render constitutionally permissible the compulsory acquisition of property. As to the remainder of paragraph 20 I consider the same to be encompassed within the Grounds at paragraph 40. The proposition in paragraph 41 of the Statement of Grounds is an unobjectionable statement of constitutional principles.
Turning to paragraph 39 of the Grounds I propose dealing with the same seriatim –
(i) There is a mandatory requirement that the Acquiring Authority demonstrate that there is a countervailing public interest which justifies the use of compulsory powers.
Counsel for the Attorney General accepted and I agree that this is a correct statement of the law.
(ii) The question of whether or not there is such a countervailing public interest is to be determined either by the High Court or by an independent person or body subject to a heightened standard of review by the High Court.
I accept that the correct approach for this Court to adopt where a constitutional right is sought to be affected is that stated in Prest –v- Secretary of State for Wales (1982) 81 LGR 193 by Watkins L.J. –
“In the sphere of compulsory land acquisition, the onus of showing that a Compulsory Purchase Order has been properly confirmed rests squarely on the Secretary of State. The taking of a persons land against his will is a serious invasion of his proprietary rights. The use of statutory authority for the destruction of those rights requires to be most carefully scrutinised. The Courts must be vigilant to see to it that the authority is not abused. It must not be used unless it is clear that the Secretary of State has allowed those rights to be violated by a decision based upon the right legal principles, adequate evidence and proper consideration of the factor which sways his mind into confirmation of the Order sought.”
Where constitutional rights are to be affected I accept that both the relevant statutory provisions which are purported to be exercised and the manner and purpose for which they are exercised should be subjected to heightened scrutiny.
(iii) The owner of the land is to be afforded a meaningful opportunity to make submissions and representations at an oral hearing as to why his land should not be acquired compulsorily (to include the concomitant right to fair procedures, extending to the right to advance and detailed notice of the reasons put forward in support of the compulsory acquisition; the right to discovery and the production of documents; and the right to cross examination).
I accept this proposition: however I am satisfied that the statutory scheme meets all these requirements and accordingly does not offend the Constitution. The application of the statutory scheme is a different matter: should there be a denial of natural justice or an unfairness the remedy lies in the Courts by way of an application for Judicial Review: in short the appropriate remedy is to judicial review proceedings at the public inquiry or the decision and if there has been a denial of natural justice there is a remedy available. In such circumstances however the constitutional infirmity lies in the procedures and the decision making process but not in the statute itself. I am satisfied that the statutory provisions which provide for an oral hearing with an onus on the acquiring authority to satisfy the Bord that the power to acquire has been properly invoked in accordance with the statute. It affords him an opportunity to test the evidence proffered in support of confirmation by cross examination and by adducing evidence. There is a facility to obtain documents other than those produced by the Acquiring Authority in section 135 of the Act of 2002. The presumption of constitutionality carries with it an intention on the part of the Oireachtas that proceedings, procedures, discretions and adjudications pursuant to a statute are to be themselves in accordance with the principles of constitutional justice: see East Donegal Cooperative Livestock Mart Limited –v- Attorney General (1970) I.R. 317. Given that this is the case I am satisfied that the scheme of the legislation does not infringe the constitutional rights of the Applicant to private property.
(iv) That the use of the land acquired be confined to the particular purpose in respect of which the independent determination was made.
I have already dealt with the purpose for which these lands have been acquired and which are detailed in the Inspector’s Report. There is no question of that purpose having been abandoned. In these circumstances no issue arises.
Having regard to the foregoing I refuse the Applicant the leave which he seeks.