Appeal dismissed; public authority mining ban does not create compensable legitimate expectation for license holders.

THE SUPREME COURT

323/98

61/00

Keane C.J.

Denham J.

Murray J.

McGuinness J.

Fennelly J.

BETWEEN

Glencar Exploration plc and ANDAMAN RESOURCES PLC

Applicants

and

THE COUNTY COUNCIL OF THE COUNTY OF Mayo

Respondent

JUDGMENT delivered the 19th day of July, 2001 by FENNELLY J.

I agree with the judgment of the Chief Justice that the appeal should be dismissed. The appeal raises issues of importance

concerning the liability of public authorities to pay compensation for ultra vires decisions.

It is necessary for a proper understanding of the issues to be aware of the facts. These have been very fully explained both in

the judgment of the learned High Court judge and that of the Chief Justice. Any repetition of those accounts would be needless

and wasteful. I will content myself with recounting the barest essentials facts so as to highlight the central legal issues.

The appellants, at all material times, held licenses to prospect for minerals in areas of Count Mayo. These were granted to them

in 1986 by the Minister for Energy under statutory powers. As a result of prospecting and exploration operations pursuant to the

licenses, they had made findings of gold deposits in commercial quantities in these area but this was an expensive business.

They had expended some £2 million in proper and effective reliance on their rights under the licenses. The finds were attractive

enough persuade Newcrest Mining Limited, an important Australian gold producer, to agree in 1991 to invest £1.6 million in the

venture and , in reality, by acquiring a 51% interest to become a partner in the enterprise.

The elected members of the Respondent, the planning authority for the County of Mayo, adopted a new Development Plan, in

early 1992. Amidst considerable controversy, an amendment providing for a policy which would amount to an effective ban on

mining development was included in the Plan. It said

“It is the policy of the Council that no development and/or work shall take place in relation to minerals (as defined by the

Minerals Act, 1940, as amended) in the areas shown dotted on Map 10A.”

I will call this, for the sake of brevity, the “mining ban.” Obviously, the statute is the Minerals Development Act, 1940. The

mining ban purported to affect an area, delineated in Map 10A, of some 300 square miles, in the Westport Electoral Area,

constituting about one seventh of the area of the entire county, and including the areas covered by the appellants’ licenses.

The result of the mining ban was that the prospective partner withdrew. For practical purposes the entire venture has become

what was colourfully described by the Managing Director of the first-named appellant as a “dead duck.” Its investment

expenditure is written off as a total loss. The learned trial judge found that the appellants have no further intention of carrying

out any work in the areas covered by the licenses.

The appellants challenged the validity of the mining ban in judicial review proceedings. In a judgment of 13th November 1992,

Blayney J held the mining ban to be ultra vires the powers of the respondent and made an order annulling it. I do not consider it

necessary to review the reasons for that decision. Although the Chief Justice raises significant queries as to its correctness,

the respondent did not appeal the order of the High Court, which now must be regarded as correct. The starting point for

consideration of the legal issues on the appeal is that the respondent, as planning authority, in purported exercise of its

statutory powers made a decision, which it had no power to make. As a consequence, it became obvious that the appellants

mining prospect was rendered valueless. The learned trial judge has found as a fact that the mining ban caused the appellants’

mining project to collapse and that the judgment of Blayney J did not lead to any revival of confidence. The appellants claim

that they should be allowed to recover damages from the respondent for losses in the form of the monies expended by them

prior to the imposition of the mining ban.

A large part of the argument concerning the liability of the respondent necessarily centred the contents of the legal advice

received by the respondent from its solicitors and counsel regarding its power to include the mining ban in its Development Plan

combined, of course, with the respondent’s state of knowledge of the likely effect of the mining ban on the appellants.

The knowledge of the respondent of the appellants’ interest is easily established. The appellants objected in writing to the draft

Development Plan on 2nd May 1991. Its letter was transmitted to Mr Michael Browne, the County Solicitor, who, in conveying

his legal advice dated 5th May 1991 to the respondent at the height of the controversy specifically drew attention to the fact

that the appellants had been prospecting in the area for some time. He presciently warned that adversely affected mining

companies might seek judicial review. On 5th December 1991, the appellants wrote to the respondent pointing out that the only

areas selected for inclusion in map 10A were areas which had been of particular interest to mining companies. They demanded

the withdrawal of the mining ban and put the respondent clearly on notice of its intention to sue it for any loss it would suffer

as a result of the ban. Thus, the respondent were fully conscious not only of the fact that the mining ban would cause loss to

mining companies and the appellants in particular but that they would be sued for any consequential losses. Loss to the mining

interest was, of course, inherent in the mining ban. Its very purpose was to make it difficult if not impossible for mining to be

permitted in the area covered by Map 10A.

The position regarding the state of knowledge of the respondent of its legal power to impose the mining ban is not so clear cut.

Central to this issue is the advice of Mr Philip O’Sullivan, Senior Counsel, now Mr Justice O’Sullivan and the respondent’s

appreciation of its effect. Mr Browne had raised in quite a pointed way the question of the validity of the resolution to include

the mining ban in the Development Plan. He covered issues of powers under the planning acts, breach of article 43 of the

Constitution and legitimate expectation all of which, to some degree, have made an appearance in the course of this litigation.

Mr Browne’s advice was not, of course, conclusive. He said:

“In view of the risks to the Council in adopting this resolution as an objective of the plan and the many and complex

areas of law involved I would require some time to complete inquiries .... to consider further the implications and to

submit a detailed case for the opinion of the appropriate Senior Counsel.”

In the event, Mr O’Sullivan was asked to advise. Because of its central role in considering the matters now before the Court, at

the risk of repetition, I will set out in full the part of his opinion which is cited by the learned trial judge:

"I have not seen Map 10A referred to in the resolution proposing the amendment to the mineral policy in the draft plan,

but the wording refers to areas in the plural and I make the assumption that the map refers to a number of locations

where mining activity is to be excluded. This suggests that the map was prepared with the degree of attention to detail

and care to limit the exclusionary prohibition to specified high amenity locations rather than by reference to a crude

exclusionary policy. In my opinion a planning authority is perfectly within its rights to make a decision in principle in its

development plan that no mining would take place in particular areas where they perceive such mining activities are in

conflict with amenity or other natural resources and to have a policy in the development plan stating this. A planning

authority in general is under a positive obligation to formulate policies and to express them in the development plan, and

in my opinion the proposed amendment is doing just this. I assume the proposal is reasonable in the sense that it is

made by reference to objective criteria. It does not have to be the best policy or a policy which a judge would approve,

or a policy which no one could criticise or which could not improved. Providing it is based on objective criteria and is

made bona fide, having regard to the proper planning and development of the area then, in my opinion, it is within the

powers of the planning authority to have such a policy and the jurisdiction to make it is contained in Part III of the 1963

Planning Act as amended".

Having quoted this extract, the learned trial judge continued:

"Had Mr. O'Sullivan seen Map 10A, comprising as it does three hundred square miles or one-seventh of the total area of

Co. Mayo, and had he been privy to the evidence in this case, I have little doubt but that he would have concluded, as

indeed do I, that this ban was nothing more than a crude exclusionary policy. The map was not prepared with a degree

of attention to detail. Care was not taken to limit the exclusionary prohibition to specified high amenity locations. Neither

could the proposal be regarded as reasonable because it was not made by reference to objective criteria."

The learned trial judge then concluded: “It is clear from the foregoing that in essence the legal advice was to the effect that

there was no power to impose it.” (Meaning the mining ban ). In this passage, the learned trial judge reached a conclusion as

to what the opinion of Mr O’Sullivan would have been if he had seen Map 10A. In doing so, he was possibly influenced by the

reasoning of Blayney J. However, that decision was delivered subsequent to Mr O’Sullivan’s opinion. The core of the opinion was

to the effect that a planning authority was entitled to “make a decision in principle in its Development Plan that no mining

would take place in particular areas..” Kelly J may, of course, be right, but there is a degree of speculation involved. Personally,

I am not persuaded that Mr O’Sullivan’s opinion would necessarily have been different if he had seen Map 10A. In so saying, I

acknowledge that I am, myself, influenced by the doubts cast on the correctness of the judgment of Blayney J. In any event, I

do not agree with the learned trial judge’s summation of the effect of Mr O’Sullivan’s opinion being that there was no power to

impose the mining ban. Kelly J himself made it clear, in any case, in an ensuing passage, that the opinion was not so

understood. He went on:

"That said, I am by no means satisfied that the import of Mr. O'Sullivan's advice was understood by the Respondent. His

advice as to the legal ability to include the ban was clearly conditional on the matters addressed in that part of the

opinion from which I have just quoted. The conditions were not met. Yet the Respondent appears to have concluded

that the advice was to the effect that there was power to proceed. This is particularly clear when one reads the

minutes of the meeting of the 17th February, 1992. There, there is set forth the advice of the County Manager on the

procedural aspect of that meeting. In the course of his recital of the events giving rise to the motion being proposed ,

he is reported to have said:-

'The Council considered the written representations following the last public display, at a meeting held on 11th

November, 1991. The Plan contained a ban on mineral extraction in a specific area as outlined in Map 10A. The

Council was informed that it was legally entitled to include such a ban although advised not to do so'.

This strongly suggests that Mr. O'Sullivan's advice was understood as an imprimatur for the proposal whereas, properly

understood, it did not even amount to a nihil obstat.

In any event, I am of opinion that the Respondent believed (wrongly) that it had power to impose the ban."

The legal issues can thus be approached on the basis that Mr O’Sullivan’s opinion was not understood by the respondent as

questioning the power to adopt the mining ban. My only gloss on the judgment of the learned trial judge is that I do not

necessarily think that the respondent were misreading Mr O’Sullivan’s opinion when they reached that conclusion.

Damages for Ultra Vires Acts

I will now turn to the legal issues which arise on the appeal. These and in particular the arguments of the appellants have been

fully explained in the judgment of the Chief Justice. The starting point of the plaintiff’s claim has to be the decision of Blayney J

that the mining ban was ultra vires the powers of the respondent. Since it had no power to adopt the mining ban and since the

appellants suffered loss as a result of its inclusion in the Development Plan, they should be compensated by the respondent for

the making of this invalid decision. Such a crude characterisation of the issue does not, of course, do justice to the appellants’

arguments. They do not suggest that they can establish the right to be compensated without bringing themselves within the

four walls of one of the established causes of action. The lack of any link between the invalidity of a decision of a public

authority and loss caused by it underlies to a substantial extent the real legal issues in the case.

As the learned trial judge correctly pointed out, “there is no direct relationship between the doing of an ultra vires act and the

recovery of damages for that act.” This fundamental proposition can be underlined in two ways.

Firstly, an individual needs no power to perform a wide range of actions which affect others and with the potential to affect

them adversely. An individual’s activity is not actionable, however, unless it consists of the commission of some civil wrong,

most usually a breach of contract or a tort. The fact that a public authority must act within the scope of the powers conferred

upon it has no necessary connection with loss which may be suffered by persons affected by it. Many people or bodies

corporate are affected for better or worse by the actions of public authorities in the performance of their statutory functions.

However, the incidence of gain or loss to individuals is unrelated to the validity of the decisions made. A valid decision is no

more or less likely to cause loss than an invalid one. Breach of a specific statutory duty is, of course, a special case, to which I

will return.

Secondly, the nature of the tort of misfeasance in public office emphasise that lack of vires is insufficient on its own to ground

a cause of action sounding in damages. Keane J, as he then was, observed in his judgment in McDonnell v Ireland [1998] I.R.

134 at page 156, that that “tort is only committed where the act in question is performed either maliciously or with actual

knowledge that it is committed without jurisdiction and with the known consequence that it would injure the plaintiff...” The

common characteristics of those two alternative elements of that rare and unusual civil wrong are, as explained by Clarke J in

Three Rivers DC v Bank of England (No 3) [1996] 3 All ER 558 at 632, in a passage cited by the learned trial judge as being that

the tort “is concerned with a deliberate and dishonest wrongful abuse of the powers given to a public officer.” The appellants

have not, of course, pursued their appeal against the rejection by the learned trial judge of their reliance on misfeasance in

public office. Nonetheless, the conditions demanded by the law for success in invoking it explain the policy of the law that

public authorities should not be at risk of claims for damages if they exercise their powers bona fide. Finlay C.J. in a well known

passage from his judgment in Pine Valley Developments v Minister for the Environment [1987] I.R. 23 at page 38 said:

“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 fide and 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.”

In his judgment in the same case, Henchy J. stated:

“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 of

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.”

I respectfully agree with those statements. I would add that the absence of the right to automatic compensation for loss

caused by an ultra vires can find further justification from the protection of individual rights afforded by the existence of the

remedy of judicial review. While the sufferer of loss from a lawful but non-tortious private act is entirely without a remedy, a

similarly positioned victim of an ultra vires act of a public authority, by way of contrast, has at his disposal the increasingly

powerful weapon of judicial review. Thus, he may be able to secure, as in this case, an order annulling the offending act. In

appropriate case, a court may be able to grant an interlocutory injunction against its continued operation. I believe that the

considered statements of the law made in Pine Valley remain the law, despite apparent inconsistency with some dicta in the

majority judgments in Duff v Minister for Agriculture (No. 2) [1997] I.R. 22, which appear to treat liability for damages as

automatically flowing from a mistake of law said to have been made by a Minister. The Pine Valley case, though fully considered

and applied in the High Court judgment of Murphy J. in that case, does not figure at any point in the judgments of the Supreme

Court. I do not believe that it can have been intended to depart from such an important principle as that laid down in Pine

Valley.

On the appeal, the appellants pursued only the claims based respectively on breach of statutory duty, negligence, breach of

legitimate expectations and infringement of constitutional rights. I propose to consider the first three. As already stated, I

agree with the Chief Justice that the appeal should be dismissed. It is only in respect of the issue of legitimate expectations

that my views may appear to differ to any extent.

Breach of Statutory Duty

In my judgment, the learned trial judge was correct to say that: “nowhere do I find either expressly or by implication that it

(section 19 of the Act) creates any duty which the legislature intended to be enforceable by an individual in a claim for

damages.” He was, in that passage thinking of the type of statutory duty that is not infrequently imposed by the legislature

with the object of protecting the interests of or creating a benefit for an identifiable class of persons. The notion of a

protective norm is familiar to many systems of law. For example, the appellants have cited Case C-6/90 Francovich and others

v Italy [1991] ECR I-5357, the decision which first established the principle and then laid down the criteria for establishing state

liability for breach of a provision of European Community law. The first condition enunciated by the Court of Justice is that the

Community act which is invoked – in that case a directive – “should entail the grant of rights to individuals.” (Paragraph 40 of

the judgment). A duty imposed by statute on a public body will not be held to create a right to damages for its breach unless it

can be shown to have within the scope of its intendment a reasonably identifiable protective purpose and identifiable class

intended to benefit.

It is not possible without straining language to transpose that principle to the present case. The statutory duty, in the sense of

obligation, which is imposed by the Local Government (Planning and Development) Act 1963 on planning authorities is, as the

Chief Justice has made clear and as seems to be accepted by the appellants, is to adopt a “plan indicating development

objectives for their area.” However, that is a duty imposed for the benefit of the public and not for the protection of any

particular class of the public. Moreover, it is not the duty whose breach is invoked by the appellants. It was, in fact, observed

when the Plan was adopted. Their complaint is that the respondent acted ultra vires when it decided to include the mining ban

in the Development Plan. The decision to include any particular objective in such a Plan is more appropriately characterised as

the exercise of a discretion. Whether the decision fell properly within the range of the statutory powers of the body in question

is nihil ad rem. No breach of statutory duty is involved. I agree with the Chief Justice’s response to the appellants’ argument

based on the qualifying phrase in the judgment of Finlay C.J. in Pine Valley, which it is claimed leaves the door open for liability

for an act which is “not actionable merely as a breach of duty.”

The appellants developed this argument in their written submissions stating that the degree of immunity granted to public

authorities by virtue of the strict restrictions on the tort of breach of statutory duty were inconsistent with the jurisprudence

of the European Court of Human Rights, in particular Osman v United Kingdom, 29 E.H.R.R. 245. The latter case originated in an

action for damages commenced against the police alleging negligence in investigating complaints with tragic consequences. In

Osman the Court of Human Rights held that the United Kingdom had violated Article 6(1) of the Convention by denying the

complainants access to a court. The Court of Appeal had struck out the applicants’ Statement of Claim for failure to disclose a

reasonable cause of action against the police. The police could not be held liable in negligence, under the precedent of Hill v

Chief Constable of West Yorkshire [1989] AC 53, for failures in the investigation of crime even to persons, who, like the

applicants, had justifiably sought protection from known and identified persons who posed a real and imminent threat to their

safety.

In evaluating the relevance of this case-law to the present case, it has to be borne in mind that the pertinent article of the

Convention guarantees the right to a fair trial, a right held to include the right to have access to a court competent to

adjudicate on a complaint. Article 6 does not purport to regulate the substance of the legal remedies available under the law of

the contracting states. The Court of Human Rights took the view that English law, as it had been interpreted by the Court of

Appeal, conferred an automatic blanket immunity on the police from civil suit in respect of their acts or omissions in the

investigation and suppression of crime. It was this component of English law which was held to prevent the English courts from

even considering competing public interest considerations. In effect, counsel for the United Kingdom had been unable to

persuade the Court that “the rule as interpreted by the domestic court did not provide an automatic immunity to the police.”

Had the matter stood on the basis of the Osman ruling alone, I would not have been persuaded that Irish law confers any

blanket immunity on public authorities for the consequences of their negligent acts of the sort which was there found to exist.

Moreover, as it happens, the Court of Human Rights has taken the opportunity to clarify its Osman ruling in a case decided

since the hearing of the appeal in the present case. On 10th May 2001, it gave judgment in Z and others v United Kingdom

(Application no. 29392/95), a case concerning the liability of local authorities for alleged failures in the performance of its

functions regarding the taking into care of children feared to be at risk. The Court was at pains to stress, recalling earlier case-

law, that Article 6 did not guarantee any particular content for the relevant rights and obligations in the domestic law of the

Contracting States. It accepted that the House of Lords in particular, in its development of the public policy element of the law

of negligence, had not conferred any blanket immunity on the public authorities in question in that case. It also frankly

acknowledged that its own judgment in Osman had to be “reviewed in the light of the clarifications subsequently made by the

domestic courts and notably the House of Lords.” (Paragraph 100 of the judgment).

The judgments of the Court of Human Rights may be useful sources of persuasive authority where they contain reasoning which

relevant to the interpretation of legal rights guaranteed by the Convention which are analogous to rights which are known in our

law and Constitution and which our courts have to apply. The value of the Osman case as an authority is, in my view,

undermined for the present case by the fact that it is concerned with a right of access to justice rather than the substance of

the legal right asserted. The appellant's claim in essence that the civil wrong of breach of statutory duty is unduly narrow, by

reason of its failure to include within its scope the claim made in this case, namely that the appellants should be compensated

for the ultra vires act of the respondent. This is a claim that the substance of the legal right being asserted insufficiently

protects the interests of the appellants. The appellants’ access to the courts have not been restricted or impaired. The

Convention cannot via article 6 supply what is lacking in Irish law. I agree with the respondent that Osman is irrelevant.

Negligence

On the issue of negligence, I am in full agreement with the judgment of the Chief Justice and with his extensive treatment of

the English and Irish case-law.

I should advert, at first, as does the Chief Justice in his judgment, to the parameters of the appeal. The appellants failed in

their claim because the learned trial judge held that the respondent did not owe them a duty of care in the exercise of their

statutory powers pertaining to the drawing up of the Development Plan and specifically the inclusion of the mining ban. The

appellants take issue with this conclusion in their Notice of Appeal. They say in particular that the learned trial judge:

- gave undue weight to his view that the statutory powers were to be operated for the benefit of the public at large;

- having made findings of negligence, should have concluded that there was a duty of care;

- failing to conclude that there was no compelling reason to base an exemption from liability based on public policy.

They object, however, that the defence did not specifically contest the existence of a duty of care.

It seems to me artificial in the highest degree to ask this Court to parse the pleadings of the parties in the High Court, when it

seems that the existence of a duty of care was very fully considered on its merits by the learned trial judge and in

circumstances where no significant objection appears to have been taken in the High Court. It is commonplace that the issues

debated become transformed as a trial proceeds. If one party finds itself significantly disadvantaged by having to deal with a

point not pleaded, that will become an issue at the trial and the trial judge will make rulings to ensure the fairness of the

hearing. The Points of Claim and Defence, in fact, seem to have concentrated very much on the question of whether the

respondent was under a duty to ensure that it did not adopt a Development Plan containing a provision which it had no power

to adopt. They focus very much on whether the respondent had taken proper legal advice or had proper regard to the advice

which it had received.

I agree with the Chief Justice that the existence of a duty of care must be regarded as being in issue on the appeal. However, I

think it is impossible before proceeding to discuss that issue to ignore the nature of the findings of negligence made by the

learned trial judge, upon which the appellants place so much reliance. They do not, in fact, relate to the alleged duty not to act

in excess of statutory powers. They are contained in the following passage from the judgment under appeal:

"I have come to the conclusion that the imposition of the mining ban in the present case was done negligently.

Whatever may have been the motives of the elected members, they set about achieving their goal in a way which, in

my view, no reasonable local authority in receipt of the advice which they obtained would have done. It is not the

function of elected representatives to slavishly give effect to their constituents' demands come what may. They must

exercise a degree of judgment in any particular case.

In this case, the evidence demonstrates that the provision of the mining ban was unnecessary. The existing planning

code was sufficient to protect all legitimate planning interests. This was the advice they received from their officials. It

was also the view made clear to them by the Minister for Energy. Not merely was it unnecessary from a planning point

of view, but the evidence was that it was in fact contrary to the best interests of the county because it would drive

away investment in exploration and the county would lose the chance of evaluating the benefits of any project put

forward for planning permission. Furthermore, there was in my view no objective justification for the adoption of the

ban. It was to operate in respect of all minerals, regardless of their method of extraction, value or the quantity likely to

be extracted. The ban was of enormous span and it was clear, particularly from the evidence of Mr Dunleavy, that little

or no thought went into the nature or the extent of the ban. It was nothing more than a crude exclusionary policy.

In concluding that the Council were negligent in the sense that they did something which no reasonable authority would

have done, I have yet to address the question as to whether that negligent act was done in the context of a duty of

care being owed to the Applicants. It is only in such context that a right to damages would arise."

This approach, by making findings of negligence before determining whether a duty of care exists, risks reversing the correct

order of analysis. Admittedly, it was the course followed in this Court in Pine Valley, where it was held that the Minister could

not be considered negligent without pronouncing on the existence of a duty of care. The elements of the tort of negligence are

the existence of a duty of care, lack of proper care in performing that duty and consequential damage. The lack of care which

we commonly call negligence consists in commission or omission of acts. In order to be actionable, the acts or omissions must

be such as will reasonably foreseeably cause damage to any person to whom the duty is owed. Mere causation is not enough.

As a matter of principle, it seems to me that the failure to exercise due care can only be established by reference to a

recognised duty. Then one can know what sorts of act are liable to cause damage for which one is liable. This dilemma is well

illustrated by the passage from the judgment of Kelly J, which I have just quoted. At the beginning and the end of the passage,

he concludes that the respondent acted as “no reasonable authority would have done,” a test more relevant to the validity of

the exercise of statutory powers than to the failure to respect that standard of care which is owed to another to whom a duty

is owed. This is consistent with the concrete criticisms made in the rest of the passage. Whether the mining ban was

“unnecessary” or “contrary to the best interests of the county...” or lacked “objective justification” are not in my view relevant

to the question of negligence. To treat these conclusions uncritically as having found the respondent to have acted negligently

not only begs the question as to whether it owed the relevant duty of care but also obscures the difficult issue of liability for

pure economic loss. The learned trial judge was perfectly entitled to expose the actions of the respondent to the severest

criticism. However, these particular criticisms do not appear to me to have any bearing on the issue of negligence. I agree, of

course, with the Chief Justice that these findings of the learned trial judge cannot be disturbed on this appeal. I also agree with

his view that the making of such findings did not mean that the learned trial judge was finding the respondent to be in breach of

any duty of care owed to the appellants. For these reasons, the passage in question ceases to have relevance for the issues to

be decide on this appeal.

In these circumstance, the question has to be whether the making of an admittedly ultra vires decision can form the basis for

any finding of negligence against the respondent. In this connection, the focus has to be on the legal validity of the decision. I

will consider whether a public authority in the position of the respondent can be held to owe a duty of care to persons affected

by its decisions to see that the decision falls within the scope of its statutory powers. That seems to me to be the real issue

here.

Let us consider the position on the hypothesis that the planning authority had the power to adopt the mining ban. On that

assumption, could it have been liable to persons, natural or legal, to compensate them for economic damage suffered as the

result of the incidence of the operation of the plan? In my judgment, the answer would clearly be in the negative. The

development represents the culmination of a process designed to gather the views of all relevant interests, economic and

social, and to give appropriate weight to them in the plan formally adopted. The authority is required to publish its proposals

and receive representations from those affected or potentially affected. In its final form, it inevitably represents a whole series

of compromises between potentially conflicting economic, social and environmental aims –the list is not exhaustive -- and

objectives. The preference given to one objective will be to the disadvantage of another and consequently to those who have

an interest in that other. This inherent in the process. In certain circumstances, a person whose property is affected by a

provision in a Development Plan may have the right to receive compensation. Such provisions recognise the possibility that an

invasion of rights for the common good may be entitled to recompense from the public purse. However, as a general proposition,

those affected by the restrictive provisions of a Development Plan are not entitled to payment. Equally obviously, landowners

affected by zoning provisions or businesses affected by restrictions adopted for policy reasons in the general interest cannot, in

my view, be regarded as coming within the scope of any duty of care owed by the authority in the framing of its Plan.

This type of effect is quite different from that which arose in Ward v McMaster [1988] I.R. 337. The loss suffered by the

plaintiff in that case did not flow inevitably from the decision of the local authority to make the loan but rather from an act of

incidental negligence in the performance of its statutory function. Similarly in Siney v Dublin Corporation [1980[ I.R. 400, the

defendant Housing Authority owed a duty of care to the tenant of a flat which it provided in pursuance of its statutory power

because the tenant was entitled to rely on it to ensure that the flat would be habitable. In each of these cases, an individual

direct relationship came into existence by reason of the statutory context. They do not support any principle of liability arising

from lack of care in the decision-making process producing foreseeable loss.

I return then to what I consider to be the nub of the case, whether a successful claim can be made for damages for the fact of

the decision being invalid. It may be no accident that almost all of the cases in which courts have had to consider this issue

concern the exercise of planning powers. The most relevant authority in this jurisdiction is Pine Valley. The judgment of Finlay

C.J. dealt with the claim for damages in negligence as follows:

"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 ....... 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.

The Court, having found that the Minister had not, in fact, been negligent because he had taken legal advice, did not consider

whether the Minister would have been liable if he had taken no legal advice, in other words whether he owed a duty of care to

take advice. In Pine Valley, it should be recalled, there was a close causal relationship between the losses allegedly suffered by

the plaintiff and the invalidity of the decision. The plaintiff was in a position to argue at a minimum that a decision to grant

planning permission would foreseeably be relied upon by potential purchasers of the affected land who would equally foreseeably

suffer loss if the permission turned out to be invalid. Consequently, it could be argued that the Minister should exercise

reasonable care in deciding whether he had power to make the decision. In the result, the judgment of the Supreme Court did

not determine whether the Minister had any such obligation. He had, in fact, taken legal advice. Even though the advice was

actually mistaken, the Minister was not liable, because he had reasonably followed legal advice from a reputable source.

This problem was considered only slightly more directly in two Privy Council cases in the 1980's. In Dunlop v Woollahra Municipal

Council [1982] A.C. 158, also, as it happens, a case concerning losses caused by an invalid planning decision, the authority had

passed two resolutions subsequently held to be invalid (one for lack of vires and one for failure to observe fair procedures)

which adversely affected the plaintiff’s interest in a development site. Although it was expressly argued that the Council owed a

duty to the plaintiff to exercise reasonable care not to affect adversely his property rights by passing invalid resolutions, the

Privy Council, whose advice was delivered by Lord Diplock, contented itself with saying that it shared the doubts of the New

South Wales Supreme Court as to the existence of any such duty of care. It ruled against the claim in negligence on the rather

more debatable ground that the plaintiff was in as good a position as the Council to know that the decision was void: “He can

ignore the purported exercise of the power.” (See page 172.) The existence of a duty of care to take legal advice was also

considered by the Privy Council in Rowling v Takaro [1988] A.C. 473, a case which concerned a decision by a New Zealand

government minister to refuse his consent under statute to an investment transaction involving the sale of shares to a non-New

Zealand investor. The New Zealand Court of Appeal annulled the decision on the ground that the minister had mistakenly taken

into account a reversion factor, i.e. the desirability that the property should revert to New Zealand interests. An action for

damages was brought against the minister. The advice of the Privy Council on the issue of duty of care, upon which the

respondent relied strongly, contains the following interesting statement (page 500):

“The character of the claim is novel. So far as their Lordships are aware, it has never previously been held that where a

minister or other governmental agency mistakes the extent of its powers and makes a decision which is later quashed

on the ground of excess of statutory powers or of an irrelevant matter having been taken into account, an aggrieved

party has a remedy in damages for negligence.”

The Privy Council did not, however, find it necessary to provide a definitive answer. It did, nonetheless, suggest some powerful

considerations militating against the imposition of the duty of care. These may be summarised:

- since the process of judicial review is available to correct any legally erroneous administrative decisions, the effect of

such decisions is likely to be limited to delay;

- it is most unlikely that a mistaken ministerial view of the law will amount to negligence: even a judge may be mistaken in

construing a statute;

- the imposition of a duty of care may be counterproductive: public authorities may become over-cautious;

- it will be extremely difficult to say in which cases a minister is under a duty to seek legal advice; it would not be

reasonable to expect a minister to seek legal advice before exercising a statutory discretion.

Even if somewhat tentatively, the Privy Council (at page 503) suggested:

“In all the circumstances, it must be a serious question for consideration whether it would be appropriate to impose

liability in negligence in these cases, or whether it would not rather be in the public interest that citizens should be

confined to their remedy, as at present,, in those cases where the minister or public authority has acted in bad faith.”

Counsel for the respondent also referred the Court to a decision to similar effect by the Supreme Court of Canada in 1970

(Welbridge Holdings Ltd v Metropolitan Corporation of greater Winnipeg 22 D.L.R. 470). That court firmly rejected as “incredible”

the proposition that the municipality which had in the ultimate view of a court (albeit upon the advice of counsel) beyond its

powers could be held to have “owed a duty of care giving rise to liability in damages for its breach.”

In my judgment, the concerns of the Privy Council are highly relevant to the question of whether and in what circumstances a

duty of care to act within the limits of its statutory powers should be held to exist. If a duty to obtain legal advice is to become

a component of the duty of a public authority, in which cases will it apply? An enormous number of discretionary statutory

powers are exercised on a daily basis. An obligation to seek legal advice even as a counsel of perfection could have a paralysing

effect on public administration. As is clear from the judgment of the learned trial judge, the mere fact of an ultra vires decision

does not confer a right to compensation. It is equally clear that liability of that type including liability for failure to take legal

advice has never in fact been imposed. Individuals enjoy protection from the consequences of unlawful public action in three

respects: firstly, if that action consists of the commission of a recognised existing tort, including, in certain cases, negligence;

secondly, unlawful decisions can be quashed on judicial review; thirdly, misfeasance in public office by knowing or malicious

abuse of power, combined with the right in appropriate cases to award exemplary or punitive damages is the most appropriate

remedy. I do not consider that a general duty to take legal advice can realistically be imposed on public authorities.

As a matter of principle, it would not be wise to rule out the possibility that a case may in the future present itself where the

relationship between a person liable to be affected by a ministerial or other public law decision is entitled to expect that care

will be exercised in and about the decision to take legal advice and the manner of its taking. At the least, I think it would have

to be shown that the statutory power in question was of the type which is designed to protect particular interests and that the

plaintiff comes within its scope. In addition, it would probably be necessary for the claim to arise from the context of the type

of individual transaction which was the subject-matter of Ward v McMaster or perhaps from the sort of reliance on the

expertise of another which formed the background to Hedley Byrne v Heller and Partners Ltd [1964] A.C. 465. I do not consider,

however, that this is such a case. There is, of course, no doubt that the appellants’ interest were well known to the

respondent at the time the decision was in contemplation. The appellants could scarcely have made their interest more clear or

their complaint more insistent. The respondent was fully aware that the appellants would be affected by a mining ban. But that

is not enough to take them out of a class of mining enterprises actual and potential similarly affected. They were not engaged

in any direct legal relationship with the respondent. Their prospecting licences had been granted by the State. They had not

made any application for planning permission, not that that would necessarily alter the position. In short, I do not believe that

the respondent owed a duty of care to the appellants either to take legal advice or to take further steps to follow it up.

In addition to the foregoing, I think it is clear in any event that the effect of the legal advice actually given, as I have

summarised it above, was not understood as casting any doubt on the respondent’s power to impose the mining ban. For that

reason, the respondent could not be held to have acted negligently. I would uphold the decision of the learned trial judge that

the respondent did not owe a duty of care to the appellants to ensure that its decision to adopt the mining ban was valid.

Legitimate Expectations

I am in full agreement both with the learned trial judge and with the Chief Justice that the appellants have not made out a case

for infringement of their legitimate expectations. This is because the particulars of failure they allege do not come, in my view,

in any meaningful way at all within the concept of action or inaction by a public authority which an affected individual has the

right legitimately to expect. Consequently, I am not sure that this is an appropriate case in which to delineate the contours of

the principle of legitimate expectations.

I believe that the learned trial judge was correct in concluding that:

"There is neither allegation nor evidence supporting any promise, express or implied, on the part of the Respondent. It

was never represented to the Applicants that they would obtain planning permission. Furthermore, the Applicants could

not, in my view, have had a legitimate expectation that planning permission would be given for mining even in the

absence of the mining ban".

In their written submissions, the appellants say:

"The Appellants submit that they had a legitimate expectation that the Respondent would act lawfully; that the

Respondent would have regard to Ministerial and Governmental Policy; that the Respondent would only include

development objectives in the Development Plan; that the Respondent would pay due regard to the advices of the

County Manager, County Engineer, Senior Executive Planner and Solicitor advising Mayo County Council; that the

Respondent would no act contrary to its legal obligations having received the letter from the Minister for Energy dated

16th December 1991; that the Respondent would not seek to circumvent the statutory procedure for the making of a

special amenity area order by the misuse of the powers to make a Development Plan; that the Respondent would not

seek to prejudge all applications for the development of mines within a substantial part of the area for which they were

responsible; that the Respondent would act legally and fairly toward the Appellants".

None of these matters, which paraphrase and repeat the submissions of the appellants as summarised in the judgment of the

learned trial judge, amount in substance to saying any more than that the appellants had a legitimate expectation that the

respondent would act properly and lawfully. Kelly J was right, in my view, to seek in the evidence or submission of something in

the nature of an undertaking or promise or representation express or implied addressed to or applicable to the appellants. I do

not say that there must be a direct nexus. It may be sufficient that the claimant belongs to a class or group of persons

affected by an act which is accompanied by or implies an intention to follow an identifiable course of conduct by the public

authority. Every citizen can, however, assert an expectation that public authorities will act within the law, but that is clearly

not enough. If it were, the doctrine would be almost meaningless and would duplicate the ordinary right, for example, to seek

judicial review of administrative action. For that reason, I would dismiss the appeal. Consequently, my further comments on this

issue are obiter.

The principle of respect for legitimate expectations is generally acknowledged to have originated in German Administrative Law

where it is stated to constitute a fundamental, even a constitutional principle. Its proximate origins are to be found in the

decision of the Court of Justice in 1973, (Case C-81/72 Commission v Council [1973] ECR575.), a case described as the locus

classicus of the principle, concerning the indexation of pay of Community officials. The Council had gone back on a decision to

adopt an average of two indices for annual pay increases in favour of the single lower one, and the Commission challenged this

before the Court. The Court annulled the relevant parts of the Council Regulation, resting its decision on what it called “the rule

of protection of the confidence that the staff could have that the authorities would respect undertakings”. ( paragraph10 of

the judgment). Thus there came to be recognised the doctrine, described in the headnote of the case as "legitimate

confidence" corresponding to the French "confiance légitime". In the context of European Community Law, the doctrine

undoubtedly has potentially substantive content. Part of the milk quota regime was annulled for failure to take account of the

legitimate expectations of a group of farmers who should have been allowed a quota. (Case 120/86 Mülder v Minister van

Landbouw en Visserij [1988] ECR 2321).

The Chief Justice in his judgment has reviewed a number of the cases on the doctrine of legitimate expectations as it has come

to be recognised independently in our courts as well as in the United Kingdom. The dilemma he identifies is whether the

doctrine, as Costello J ruled in Tara Prospecting Limited and Another v Minister for Energy and Others [1993] 771, confers only

a “conditional expectation” capable of being withdrawn by the authority, following a fair hearing in the public interest, or

whether it is capable of conferring substantive rights. I agree with the Chief Justice that it is not necessary for the Court to

choose in this case between those two alternatives. The appellants have not identified any meaningful legitimate expectation.

It is true that an official exercising a statutory power will, in most cases, have no greater obligation than to afford a hearing to

an affected individual before departing from a prior position or policy. In other cases, this may not be enough. The damage may

be done. It may not be possible to restore the status quo. If the official position is altered, the Court may have to furnish “such

remedy as the equity of the case demands”. (per Denning M.R. in Amalgamated Property Co. v Texas Bank [1982] Q.B. 84 at

page 122). The Court of Justice seems to me to accord due weight to the competing imperatives of private justice and public

policy in an often quoted passage (Case 84/78 Tomadini v Amministrazioni delle Finanze dello Stato [1979] E.C.R. 1801, at

paragraph 20:-

“If in order to deal with individual situations the Community institutions have laid down specific rules enabling traders to

return for entering into certain obligations with the public authorities to protect themselves - as regards transactions

definitively undertaken - from the effects of the necessarily frequent variations in the detailed rules for the application of

the common organisations, the principle of respect for legitimate expectations prohibits those institutions from

amending those rules without laying down transitional measures unless the adoption of such a measure is contrary to an

overriding public interest.”

In order to succeed in a claim based on failure of a public authority to respect legitimate expectations, it seems to me to be

necessary to establish three matters. Because of the essentially provisional nature of these remarks, I would emphasise that

these propositions cannot be regarded as definitive. Firstly, the public authority must have made a statement or adopted a

position amounting to a promise or representation, express or implied as to how it will act in respect of an identifiable area of its

activity. I will call this the representation. Secondly, the representation must be addressed or conveyed either directly or

indirectly to an identifiable person or group of persons, affected actually or potentially, in such a way that it forms part of a

transaction definitively entered into or a relationship between that person and group and the public authority or that the person

or group has acted on the faith of the representation. Thirdly, it must be such as to create an expectation reasonably

entertained by the person or group that the public authority will abide by the representation to the extent that it would be

unjust to permit the public authority to resile from it. Refinements or extensions of these propositions are obviously possible.

Equally they are qualified by considerations of the public interest including the principle that freedom to exercise properly a

statutory power is to be respected. However, the propositions I have endeavored to formulate seem to me to be preconditions

for the right to invoke the doctrine.