AS TO THE ADMISSIBILITY OF
Application No. 12742/87
by PINE VALLEY DEVELOPMENTS LTD. and Others
against Ireland
The European Commission of Human Rights sitting in private
on 3 May 1989 , the following members being present:
MM. J. A. FROWEIN, Acting President
A. WEITZEL
J. C. SOYER
H. G. SCHERMERS
H. DANELIUS
G. BATLINER
J. CAMPINOS
H. VANDENBERGHE
Mrs. G. H. THUNE
Sir Basil HALL
MM. F. MARTINEZ
C.L. ROZAKIS
Mrs. J. LIDDY
Mr. L. LOUCAIDES
Mr. H. C. KRÜGER, Secretary to the Commission,
Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 6 January 1987
by Pine Valley Developments Ltd. and Others against Ireland and
registered on 23 February 1987 under file No. 12742/87;
Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case may be summarised as follows:
The first applicant is Pine Valley Developments Limited, a
company registered in Dublin whose principal business was the purchase
and the development of land.
The second applicant is Healy Holdings Limited, the parent
company of the first applicant also registered in Dublin, whose
principal business was the purchase and development of land. The
company has been in receivership since 14 October 1985.
The third applicant, Mr. Daniel Healy, is the managing
director and sole shareholder of both the first and second
applicants. He is an Irish national and lives, at present, in England.
The applicants are represented, in the proceedings before the
Commission, by Mr. Philip O'Sullivan S.C., of counsel, and Messrs.
McKeever & Son, Solicitors, Dublin.
On 10 March 1977 the Minister for Local Government granted
outline planning permission for industrial warehouse and office
development in respect of a site comprising 211/2 acres of land at
Clondalkin, County Dublin to its then owner, Mr. P. Thornton. This
decision was granted on appeal against a decision of the planning
authority (Dublin County Council) refusing an application for full
planning permission on the grounds inter alia that the area was
zoned to provide for the further development of agriculture so as to
preserve a green belt.
On 15 November 1978 the first applicant (Pine Valley
Developments Limited) agreed to purchase the lands for £550,000 in
reliance upon the grant of outline planning permission. Such outline
planning permission establishes the right of the landowner in
principle to develop land subject only to subsequent approval of
detailed plans. In the event that such subsequent approval is
refused, Section 55 of the 1963 Planning Act provides for a general
right to compensation for any reduction in value of the interest of
the claimant in the land. Under Section 29 of the Local Government
(Planning and Development) Act 1976, planning permissions ceased to
have effect after five years ("withering permissions").
On 16 July 1980 Pine Valley Developments Limited applied to
Dublin County Council for detailed planning approval in reliance on
the outline permission already granted.
On the refusal by the Council on 15 September 1980 to grant
planning approval, the first applicant sought, and was granted on
8 December 1980, a conditional Order, and on 27 May 1981, an Order of
Mandamus by the High Court directing Dublin County Council to grant
planning approval. The first applicant then sold the property to the
second applicant (its parent company) on 17 July 1981 for £550,000. On
an appeal by Dublin County Council against this decision, the Supreme
Court held, on 5 February 1982, that the grant of outline planning
permission by the Minister for Local Government was ultra vires
the Minister and was therefore a nullity. The court found inter alia
that the Minister had no power under the relevant statutory provision,
upon appeal from the planning authority, to make a decision which
contravened the development plan. He only possessed such power if the
Planning Authority had sought his permission to make a decision itself
in contravention of the development plan.
As a result of this decision, the first applicant claims that
the lands which were purchased for £550,000 could no longer be
developed and were worth substantially less. The lands were let for
one year in 1982 for a nominal rent and have been vacant since. The
second applicant (Healy Holdings Limited) has, as a result, been put
into receivership and the third applicant claims that he has lost all
of his assets.
In order to alleviate the legal uncertainty created by the
above decision of the Supreme Court, the Irish Parliament enacted the
Local Government (Planning and Development) Act 1982 which entered
into force on 28 July 1982.
Section 6 of the 1982 Act provided as follows:
"1) A permission or approval granted on appeal ... prior to
the 15th day of March 1977 shall not be, and shall not be
regarded as ever having been, invalid by reason only of the
fact that the development concerned contravened, or would
contravene, materially the development plan relating to the
area of the planning authority to whose decision the appeal
related.
2) If, because of any or all of its provisions, subsection
(1) of this section would, but for this subsection, conflict
with a constitutional right of any person, the provisions of
that subsection shall be subject to such limitation as is
necessary to secure that they do not so conflict but shall
be otherwise of full force and effect."
Because they had exercised their constitutional right to
litigate the validity of the planning permission in the courts, and
because this led to the above finding of invalidity by the Supreme
Court, the applicants considered that Section 6(2) had the effect of
excluding them from the benefit of Section 6 (1).
On 11 March 1983 the first applicant brought proceedings
against the Minister of the Environment seeking damages for breach of
statutory duty, for negligent misrepresentation and for negligence.
The statement of claim was subsequently amended on 25 January 1985 to
include the second and third applicants as plaintiffs. Subsequently
the parties agreed to the following points of law to be determined.
1) Whether an action in damages for breach of statutory duty
lay against the Minister of the Environment for granting on legal
advice outline planning permission to Mr. Thornton;
2) Whether an action in damages for negligence lay against
the Minister of the Environment;
3) Whether an action in damages for negligent
misrepresentation lay against the Minister of the Environment;
4) Whether in the circumstances pleaded the State has failed
to vindicate the property rights of the plaintiff and if so,
whether an action for damages lay against the State;
5) Whether in the circumstances pleaded the State has in its
laws respected, and as far as practicable by its laws, defended
and vindicated the property rights of the plaintiff and if so,
whether an action in damages lies against the State.
On 28 June 1985 the High Court found that the applicant had no
cause of action. On 30 July 1986 the Supreme Court unanimously
dismissed an appeal against this decision ([1987] ILRM, pp. 753-768).
In rejecting the applicant's claim based on negligence and
negligent misrepresentation, Mr. Justice Finlay C.J. (Griffin J
agreeing and Hederman J concurring) stated as follows: (ibid.,
p. 756):
"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 cannot 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-
named Defendant, nor indeed was any allegation of malice or
impropriety made against him in the pleadings. I am, therefore,
satisfied that insofar 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
cannot lie, the appeal must fail."
As regards the claim against the State for damages based upon
a breach of the applicant's constitutional right of property,
Mr. Justice Finlay C.J. added as follows (ibid., pp. 759-760):
"The purchase of land for development purposes is manifestly
a major example of a speculative or risky commercial
enterprise. Changes in market values or economic forces,
changes in decisions of planning authorities, 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 Plaintiffs' 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 40.3.1 and Article
40.3.2. is in the first instance, as far as practicable by
its law 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.
...
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 without negligence and bona fide.
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 cannot 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 the case."
On the question of whether the applicants were excluded by
Section 6(2) Mr. Justice Finlay C.J. stated that the 1982 Act
retrospectively validated certain planning decisions but 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".
Mr. Justice Henchy (Griffin J agreeing) also considered that
Section 6 (2) excluded the applicants and that no issue of unfair
discrimination arose (ibid., p. 764):
"S. 6 of that Act had the effect of giving
retrospective validity to planning permissions such as this
granted on appeal prior to 15 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
1982 Act."
Mr. Justice Lardner considered that the exclusion of the
applicants by Section 6 constituted neither an unjust attack on their
property rights nor unlawful discrimination (ibid., p. 767):
"The particular controversy between the parties in
Pine Valley Developments Ltd. v. Dublin County Council was
tried and decided by this Court in favour of the Defendants
in February 1982. No doubt it was apprehended that s. 6(1)
of the Local Government (Planning and Development) Amendment
Act 1982 might operate to reverse retrospectively this
Court's decision and that this might constitute an
unwarrantable interference by the legislature in a decision
of the courts. It seems probable that it was in these
circumstances that s. 6(2) was enacted with a view to
avoding such interference. And this subsection has been
accepted by counsel for both sides in the present case as
excluding the appellants from the benefit of s. 6(1).
It is in respect of this situation or set of facts
that the appellants contend that to exclude them from the
benefit of s. 6(1) constitutes (1) an unjust attack on their
property rights or an injustice done which affects their
property rights and (b) discriminates unfairly as between
them and other persons who had received permissions or
approvals of the Minister on appeal under Part IV of the
1963 Act and who were given the benefit of s. 6(1). In
regard to the first contention it seems to me that s. 6(2)
was included by the Oireachtas for the purpose of
respecting and not interfering with the determination by the
courts of the justiciable controversy which constituted the
proceedings in Pine Valley Developments Limited v. Dublin
County Council and of respecting the constitutional rights of
the parties, both plaintiffs and defendants in that action,
to have their controversy determined by the courts rather
than by the Oireachtas. It may be that there is to some
extent a conflict here between the right of the parties to
have their controversy judicially determined by the courts
and the present appellants' property interest. That fact in
itself, however, does not in my view, necessarily mean that
an injustice was done to the appellants and I am satisfied
that it does not constitute an unjust attack on the
appellants' property rights or an unlawful discrimination
against them."
Relevant provisions of Irish law
Articles 40.1, 40.3 and 43 of the Constitution provide as
follows:
Article 40.
"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 law 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
"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."
COMPLAINTS
1. The applicants complain under Article 1 of Protocol No. 1 to
the Convention that they have been unlawfully deprived of their
possessions as a result of their reliance on the outline permission
granted by the Minister for Local Government in respect of the
property which they purchased. They claim that the property, for which
they had paid £550,000 on the basis that outline planning permission
had been granted, was now only worth approximately £50,000. In this
respect they submit that the inapplicability of the principle of
estoppel to representations made by planning authorities under Irish
law has operated to deprive them of their property, and further, that
the immunity of Ministers from claims for compensation in such cases
fails to establish a fair balance between the public interest on the
one hand and individual rights on the other.
The applicants further complain that there has been an
unjustified control of the use of their property and that the failure
to grant compensation is disproportionate to the wrong suffered. They
point out that others similarly affected by the Supreme Court decision
had their planning permissions and approvals retrospectively
validated by Section 6 of the 1982 Act.
2. The applicants complain that they have been denied an
effective remedy under Irish law in breach of Article 13 of the
Convention. They point out that in two successive proceedings they
have sought to vindicate their rights and obtain a remedy before the
Irish courts, and that such a remedy has been granted by the State
to every other person similarly situated.
3. The applicants complain further that Section 6 of the 1982
Act retrospectively validates the grant of planning permissions in
respect of every other person affected by the Minister's decision
except the applicants. This section could have been drafted in such a
way as to confer the benefit of the retrospective validation on the
applicants as well as other landowners similarly situated. They
therefore submit that they have been victims of discrimination in the
enjoyment of their property rights, on the grounds of their status as
unsuccessful litigants, in breach of Article 14 of the Convention.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 6 January 1987 and
registered on 23 February 1987. On 8 October 1987, the Commission
decided, pursuant to Rule 42 (2)(b) of the Commission's Rules of
Procedure, to bring the application to the notice of the respondent
Government and to invite them to submit observations on the
admissibility and merits of the application.
On 15 March 1988, the respondent Government submitted their
observations and on 9 May 1988 the applicants submitted their
observations in reply.
The Commission considered the application again on 15 December
1988 and decided to invite the parties to a hearing on the
admissibility and merits of the case insofar as it raised issues under
Article 1 of Protocol No. 1 and Article 14 of the Convention.
The hearing took place in Strasbourg on 3 May 1989. The
parties were represented as follows:
The Government
Mr. P. E. SMYTH Agent, Department of Foreign Affairs
Mr. H. J. O'FLAHERTY Senior Counsel
Mr. J. O'REILLY Counsel
Mr. J. F. GORMLEY Office of the Attorney General
Mr. P. FENTON Department of the Environment
The applicants
Mr. P. O'SULLIVAN Senior Counsel
Mr. G. WALSH Solicitor
Ms. H. O'SULLIVAN Assistant
SUBMISSIONS OF THE PARTIES
The respondent Government
Article 25 of the Convention
The Government submit that all three applicants cannot claim
to be victims at the same time within the meaning of Article 25 para.
1 of the Convention. In particular the first applicant cannot be
considered to be such a "victim" in that it has already received an
amount equivalent to the original purchase price of the land.
Furthermore, the grant of outline planning permission is inherently
conditional and therefore cannot be said to give rise to a right
protected by the Convention. The Government also point out that the
third applicant is the only person among the applicants to whom are
accorded clear constitutional rights under Irish law and is therefore
the only person who could be regarded as a "victim" of their breach.
In addition, they question whether the applications on behalf of
companies one of which is in receivership and the other about to be
struck off the register of companies are validly before the
Commission. Finally, they submit that the applicants cannot be
regarded as victims since they have not applied for compensation
under the relevant provisions of the 1963 Act.
Article 26 of the Convention
The Government emphasise that many of the factual
matters upon which the applicants are basing their claim have never
been established before the Irish courts and are now introduced for
the first time before the Commission. These matters include:
(1) the relationship between the first applicant and the second
applicant and the reasons for the failure of their respective
undertakings, as well as the personal circumstances of the third
applicant and the alleged losses sustained by him;
(2) the value of the property in question;
(3) the existence of malice or abuse of power by the Minister, a
possibility which was recognised as having been expressly waived by
the applicants before the Irish courts.
Against this background the Government submit that the
applicants have failed to exhaust four separate remedies under
domestic law in respect of their complaints under the Convention. A
fatal flaw in the applicants' case was their failure to seek a
declaration that Section 6 (2) of the 1982 Act did not apply to their
circumstances and that they were entitled to the benefit of Section 6
(1) of the 1982 Act. In addition, it would have been open to the
applicants to have sought a declaration that the provisions of Section
6 (2) of the 1982 Act were unconstitutional and invalid, having regard
to the provisions of Article 40.3 and Article 43 of the Constitution
of Ireland. It would have been open to the applicants to have sought
these declarations in their original statement of claim before the
High Court on 15 June 1983 or in their amended pleadings of 25 January
1985. There would have been no requirement to join any additional
parties to the domestic proceedings as the Attorney General is the
legitimate contradictor concerning all such challenges and he was
already a party to the proceedings.
In support of this submission, the Government argue that the
applicants mistakenly conceded before the High Court and the Supreme
Court in the second set of proceedings that Section 6 (2) of the 1982
Act had the effect of depriving them of the benefit of Section 6 (1).
The comments of Mr. Justice Henchy and Mr. Justice Lardner in this
respect are obiter dicta and reflect little more than a gloss on a
concession made by the applicants, and the Government take issue with
the applicants' reliance on these passages of the Supreme Court
judgment for the proposition that under Irish constitutional law the
legislature is not free to reverse the effect of a Supreme Court
decision on a particular case. The true position under Irish law,
supported by authority, is that while the legislature cannot interfere
in respect of litigation then pending or then being dealt with by the
courts (Buckley v. A.G. [1950] I.R. 67), there is nothing to prevent
it from changing the law retrospectively so as to nullify the effect
of the court's judgment in one case or in a series of cases (see e.g.
Garvey v. Ireland [1981] I.R. 75). For this reason, once the
litigation in the applicants' first case itself had been concluded and
the judgment delivered, there was nothing in principle to prevent the
legislature from overruling that determination of invalidity with
retrospective effect.
This submission is supported fully by the short debate that
took place on 22 July 1982 in Seanad Eireann (Upper House of
Parliament) when consideration was given to the passing of the Local
Government (Planning and Development) Act 1982. During the course of
that debate the responsible Minister of State stated:
"Sub-section 2 has been included by the Parliamentary
draftsmen, with the agreement of the Attorney General, so as
to preserve the rights of parties to any proceedings now
before the courts and to ensure that no court is deprived of
jurisdiction regarding an issue raised in such proceedings.
This sub-section is also designed to meet the case of any
unconstitutional interference with a property right."
The Government would point out in this connection that legal
issues similar to those raised in the applicants' litigation were
being raised in separate proceedings before the High Court and the
Supreme Court at the time of the enactment of the 1982 Act (see
The State (Finglas Industrial Developments Ltd.) v. Dublin County
Council, unreported Supreme Court judgment of 17 February 1983).
As a matter of first principle the Constitution of Ireland and
the rights guaranteed thereunder apply to any person even though a
statute may not expressly refer to them. Although it is true that
constitutional rights in Irish law are generally granted to natural
persons and not to corporate bodies or undertakings, there have been
instances in which companies have been allowed to rely on fundamental
constitutional rights of the individual. In the first Pine Valley
case Mr. Justice Henchy noted 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 land".
By contrast, it is clear that Government agencies such as
local authorities do not themselves enjoy or possess constitutional
rights. The applicants have consequently failed to show that the
retrospective granting of planning permission would affect the
"constitutional rights of any person" so as to attract the exclusion
clause of Section 6 (2) since Dublin County Council, the successful
party in the first Pine Valley Case, is not such a "person" and does
not enjoy any constitutional rights.
As regards the failure of the applicants to challenge the
validity of Section 6 (2) which they interpreted as excluding them
from the benefit conferred by Section 6(1) of the 1982 Act, the
Government submit that the challenging on constitutional grounds in
Irish law of the relevant statutory provisions is normally a sine qua
non for the subsequent admissibility of the complaint under the
Convention. Otherwise the domestic courts will have been deprived of
the opportunity of considering the equivalent argument advanced before
the Commission. For this reason, the Government submit that the
applicants clearly failed to exhaust domestic remedies as required by
Article 26 of the Convention in failing to challenge the
constitutionality of Section 6 (2) of the 1982 Act.
There are two further instances where the applicants have
failed to exhaust such remedies. Firstly, it is submitted that the
applicants have not shown that they could not have recovered damages
from the former owner of the land in question for breach of a
statutory implied covenant as to title under Section 7 of the
Conveyancing Act 1881 after it had transpired that the outline
planning permission given to the former owner was void. Under Irish
law, if a contract for the sale of land is made subject to the
obtaining of a valid permission, the purchaser is entitled to
repudiate the contract if such permission is not forthcoming or when
no bona fide application for permission has been made. This
proposition would seem, a fortiori, to entitle the purchaser of land
to sue for damages under Section 7 of that Act where a vendor has sold
without the benefit of a valid permission and where the existence of
such a permission was a condition of sale.
Finally, it is submitted that the applicants have not shown
that they could not have succeeded against the former owner of the
lands in question under the law of unjust enrichment. Under Irish
law, money paid under mistake of law is recoverable if the parties
were not "in pari delictu". It is submitted that this principle is
applicable to the present case. The applicants were not in possession
of the relevant facts at the time of the purchase of the land from the
former owner and they had no reason at that time to believe that any
planning permission might be void. In these circumstances, it is
submitted that the applicants would have had a good cause of action
against the former owner under the law of unjust enrichment.
Article 1 of Protocol No. 1
The Government submit that the facts of the present
application do not disclose any interference with the applicants'
entitlement to the peaceful enjoyment of their possessions within the
meaning of Article 1 of Protocol No. 1.
In response to the applicants' reliance upon the principles of
estoppel under English law as stated by Lord Denning in the Lever
case, the Government point out that this is now of doubtful authority
and that it provides no answer to the applicants' complaints (see,
e.g., Western Fish Products Ltd. v. Penwith District Council [1981]
2 All E.R. 204).
It is also submitted that the applicants have not been
deprived of their property. At the time of the filing of their
application, the applicants still had an interest in the land in
question which, since 1982, would appear to have been left as a wasting
asset. Furthermore, the interference found by the Court in the
Sporrong and Lönnroth case (Eur. Court H.R., judgment of 23 September
1982, Series A No. 52) does not approach the situation in the
present case. There is no question of alleged mala fides as the
Minister had been acting bona fide on legal advice since the coming
into operation of the Planning Code in 1963 that he was entitled to
grant outline planning permission in the circumstances complained of.
Unlike the circumstances of that case, or of the circumstances of the
Erkner and Hofauer case, the applicants' title to the property in
question was never "precarious and defeasible" and insofar as there has
been any uncertainty, it has not been such as to force them to bear a
disproportionate burden since it has been the result of a relatively
expeditious litigation concerning the validity of the planning
permission.
Nor did the restrictions on construction in the present case
impose an "individual and excessive burden" on the applicants, as they
are similar to those imposed on the owners of agricultural property
throughout Ireland. Furthermore, it is clear that the public interest
requires that the lands in question remain zoned for agricultural
purposes and that the question falls within the wide margin of
appreciation in these matters recognised by the Court in the Sporrong
and Lönnroth case.
Finally, it is submitted that insofar as the applicants
suffered any loss, this loss was caused by the operation of market
forces and does not, as such, require compensation by the Government.
Any person such as the applicants who purchases agricultural land with
a view to developing it for industrial or commercial purposes must be
prepared to accept the legitimate risks which attach to such a
speculative adventure. The possibility of annulment of a planning
permission is among the legitimate risks which must be hazarded and
the Government cannot be obliged to compensate the purchaser should
this venture prove to be a commercial failure.
Article 14 of the Convention
For the reasons advanced above with respect to Article 26 of
the Convention, the Government do not consider that on its proper
construction Section 6 (2) of the 1982 Act excluded the applicants
from the benefit conferred by Section 6 (1). Insofar as they have
been excluded from the operation of Section 6(1), therefore, this has
been solely a consequence of the applicants' mistaken concession on
this point in the course of the domestic proceedings. As the
applicants have not exhausted their domestic remedies by seeking the
appropriate declaration and if necessary challenging the validity of
the statutory provision on constitutional grounds, they should be
precluded from raising the argument before the Commission.
The recent judgment of the High Court in Brady & Others v.
Donegal County Council and Another (unreported judgment of 6 November
1987), in which the two month limitation period for challenging
planning decisions was struck down, illustrates the importance of
litigants not making inappropriate concessions and exhausting all
legal remedies open to them. It was illogical of the applicants to
claim damages for breach of constitutional rights and not to challenge
the constitutionality of the statutory provisions about which they
complained.
It is clear from the judgment of Mr. Justice Finlay, that this
argument had not been advanced before the Irish courts since he
indicated that he expressed 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".
Finally, the Government recall the statement made by the
Minister of State at the Department of the Environment in the Seanad
debates that Section 6(2) had been drafted so as to preserve the
rights of parties to any proceedings then before the courts and to
ensure that no court was deprived of jurisdiction regarding an issue
raised in such proceedings.
Article 13 of the Convention
For the reasons advanced above with respect to Articles
14 and 26 of the Convention, the Government reject as being without
foundation the applicants' contention that they did not have an
effective remedy under national law for the alleged violation of their
rights under the Convention.
The applicants
Article 25 of the Convention
In response to the Government's submissions on the question of
whether the applicants are victims within the meaning of Article 25 of
the Convention, the applicants submit the following information.
The first applicant has lost its right to develop the lands and
thereby make a profit on its investment of £550,000. The second
applicant has lost the vast bulk of the £550,000 it paid to the first
applicant for the lands in question. The lands were ultimately sold
in or about January 1988 for £50,000. The third applicant is in
practice the sole beneficiary of the first applicant and the second
applicant has assigned its interest in the present proceedings to him.
The third applicant has, in fact, borne the above losses.
Heavy costs, expenses and outlay have been incurred in
litigation and in processing applications for approval and permission
on the lands. As a result, the third applicant, who is now aged 64,
has suffered severe financial hardship.
The applicants also point out that, under Section 55 (1) of the
Irish Planning Code, a refusal to develop land confers in principle a
right to compensation (Owenabue Ltd. v. Dublin County Council,
82 ILRM 150). If planning permission had been refused, as
distinct from having been declared a nullity by the Supreme Court, the
applicants would consequently have been entitled to compensation. In
this connection it is established under Irish law that the third
applicant's interest as a shareholder in the first and second
applicant companies constitutes a property right for the purposes of
Article 40.3 of the Constitution (Private Motorists Provident Society
Ltd. and Moore v. A.G. [1984] ILRM, 88). In consequence, to the
extent that these applicants have suffered loss, the third applicant
suffered loss as the sole shareholder in the applicant companies.
Article 26 of the Convention
The applicants emphasise the high probability that the first
two remedies suggested by the Government would at best have produced
"Pyrrhic" victories and more likely defeats involving further delays and
costs which the applicants were unable to provide.
In the first place, it is clear that the applicants were not
entitled to the benefit of Section 6(1) of the 1982 Act.
This position was accepted by each of the judges who expressly
dealt with this point in the second Pine Valley case, specifically
Henchy J., Griffin J. and Lardner J. in the Supreme Court. In
particular Mr. Justice Henchy accepted that the applicants were
excluded ("This means that Pine Valley were excluded from the benefit
of the Section"). Mr. Justice Griffin expressly agreed with the
judgment of Mr. Justice Henchy. Mr. Justice Lardner also accepted
that Pine Valley were excluded from the operation of Section 6 ("S.
6(2) would appear to exclude the appellants from the benefits of such
retrospective validation"). Moreover he added that counsel for both
sides had accepted that the applicants were so excluded. An action
for a declaration that this Section did apply to them consequently
offered no prospect of success and therefore cannot be considered as a
"remedy" for the purposes of Article 26.
Even if, contrary to these powerful indications of the Supreme
Court, such an action would have succeeded, it would certainly have
come too late to have been of any practical benefit to the applicants.
Under Section 2 of the 1982 Act the life of planning permission
in the present case expired on 10 March 1984. A plenary action
seeking the declaration, commencing in July 1982 and involving an
appeal to the Supreme Court in accordance with Article 26 of the
Constitution, would have taken considerably longer than the 18 months
in question. It would have had to be followed by an application for
approval of plans which would almost certainly have been appealed to
An Bord Pleanála (Planning Board). By this time, the benefit of the
original Ministerial outline permission would have been exhausted by
the passage of time and the action would therefore have provided no
benefit to the applicants.
Secondly, with respect to the suggested proceedings
challenging the constitutionality of Section 6 of the 1982 Act, the
applicants point out that sub-section 2 of this provision merely
provides for a "saver" in respect of any constitutional conflict
arising from the application of sub-section 1 and that it is as a
result inconceivable that any challenge as to its constitutionality
could have been framed, let alone succeed. The effect of a successful
challenge to sub-section 1 on the other hand would not have been to
bring the applicants within the ambit of its application, but rather
to exclude everyone else by the deletion of Section 6 from the
1982 Act.
The applicants add that this interpretation is supported by
the clear wording of Section 6(1) in that it provides that permissions
"shall not be, and shall not be regarded as ever having been,
invalid ...", which clearly means that at all times, including that
period when the issue raised by Pine Valley was pending before the
Supreme Court, the outline permissions were to be regarded as valid.
Such a possibility in the applicants' case is completely precluded by
the central finding of the Supreme Court in the first Pine Valley
case, namely that the outline permission there at issue was invalid.
The applicants accept that the legislature is free to reverse
the effect of a Supreme Court decision after the case is finished
(Buckley v. A.G. [1950] I.R. 67). It is important to note, however,
that the conclusion does not follow that as a result Section 6
necessarily operates to reverse the effect of the Supreme Court
decision in the first Pine Valley case. On the contrary, the
unnecessarily wide wording of Section 6 (1) operates so as to make
such reversal incompatible with the principle in the case of Buckley
v. the Attorney General, unless the first Pine Valley decision is
excluded, which of course it was by Section 6 (2).
The applicants' complaint is rather that the Legislature
failed in the drafting of Section 6 of the 1982 Act to exercise this
power so as to benefit the applicants and that this failure
constituted arbitrary and unnecessary discrimination against them.
That the applicants were so discriminated against is supported by the
fact that even those persons who were in fact involved in relevant
litigation at the time of the promulgation of the 1982 Act could have
chosen to discontinue their proceedings before the courts and thereby
avail themselves of the benefit conferred by Section 6 (1) of that Act.
The applicants submit in this connection that the reference to the
"constitutional rights of any person" in Section 6 (2) related simply
to the right of any citizen to have an issue tried before the Irish
courts and to be protected from interference by the legislature in
those proceedings.
As regards the suggested action for breach of an implied
statutory covenant as to title against the former owner of the lands
in question under Section 7 of the Conveyancing Act 1881, the
applicants point out that such a cause of action did not form part
either of their causes of complaint in the second Pine Valley case or
of their complaints to the Commission. It is sufficient for the
purposes of Article 26 if the substance of the complaint under the
Convention has been raised in the domestic forum and in the present
application this was satisfied by the applicants' complaints against
Ireland in the second Pine Valley case, which were quite different from
those allegedly available against the former owner of the property
under Section 7 of the 1881 Act. The applicants in any case deny that
there was any prospect of success for such an action on the grounds,
inter alia, that there is no authority for the proposition that there
exists an implied covenant under Section 7 of the 1881 Act as to the
validity of a purported outline planning permission and there is no
reason why a prudent purchaser should have included such a clause in
the contract for sale. Furthermore, the domestic law relating to
quantum of damage suggests that even if such proceedings were to have
succeeded, the amount of damages recoverable would have been entirely
inadequate to compensate the applicants for the losses occasioned by
the failure of the Minister's outline planning permission.
As regards the suggested action for unjust enrichment against
the former owner of the land in question, the applicants submit that
such an action was bound to fail since the essential element for the
repayment of money paid under a mistake of law is that one party is
in a position of advantage vis-à-vis the other so as to impose a duty
on that party to protect the other. In the present case, the parties
were "in pari delictu" and the former owner would have had a complete
defence which is well grounded in a line of clear and established
case-law in both Ireland and the United Kingdom.
In response to the Government's assertion that new factual
arguments are now being introduced before the Commission for the first
time, the applicants point out that the "special case" procedure
adopted at the suggestion of the Government precludes formal proof of
facts in the domestic courts and is confined to a consideration of
agreed points of law. Many of these facts are, however, matters of
public record and many more which are now relevant - such as the
third applicant's personal circumstances or the sale price of the
property in question by the receiver of the second applicant -
occurred only after the Supreme Court decision.
With respect to the failure to allege any malice or improper
motives on the part of the Minister in the domestic proceedings, the
applicants point out that this failure resulted solely from the fact
that in the absence of any proof of actual malice, they were unable to
make out a case of "misfeasance in public office" against the Minister.
At the same time, however, the applicants in introducing the case in
the Supreme Court referred to the possibility alluded to by
Mr. Justice Henchy in the first Pine Valley case that the Minister in
that case may have been influenced "by political pressures or other
extraneous or unworthy considerations".
Article 1 of Protocol No. 1
The applicants point to the losses they have incurred as a
result of the court decision holding the outline planning permission
to be a nullity, and which have been detailed above.
In connection with their complaint that they have been
unlawfully deprived of their possessions, the applicants point out that,
under Section 8 of the Local Government (Planning and Development) Act
1963, planning authorities are obliged to keep a public register of
all planning decisions, so that persons interested in purchasing land
may consult the register with a view to formulating a price which
reflects the development potential of the land. It is argued in this
respect that where the circumstances justify reliance on a
representation made by a planning authority, an estoppel may arise
(Lever (Finance)) Ltd. v. Westminster Corporation [1970] 3 All E.R.
496; Western Fish Products Ltd. v. Penwith District Council [1981]
2 All E.R. 204). That compensation would normally be paid to persons
suffering loss as a result of representations made by the State is
further confirmed by recent Irish decisions (e.g. Webb v. Ireland,
unreported judgment of Supreme Court, 16 December 1987; McHugh v.
Commissioner of An Garda Siochana [1986] I.R. 228). Having regard to
the unique nature of the applicants' claim to compensation, it cannot
be said under Irish law that there was any unduly onerous obligation
conflicting with the common good which would have justified the
refusal of that claim.
The applicants reject the submission of the Government that
since they still enjoyed title to the land after the planning
permission was declared invalid, they could not be said to have
thereby been 'deprived' of their property. This submission ignores
the distinction between the continued title to the land and the
abolition of their right to develop it, a distinction which is
recognised in Irish law as creating two separable interests (Frascati
Estates Ltd. v. Marie Walker [1975] I.R. 177). The importance of
this distinction is borne out in the present case by the fact that the
applicants effectively paid £500,000 for their right to develop the
land as compared with £50,000 for the title therein.
As regards the Government's submission that the facts of the
present application may be distinguished from those in the case of
Sporrong and Lönnroth, the applicants submit that the prohibition on
construction has undoubtedly restricted the right to use their
property except in the most minimal sense and that it has resulted in
substantial financial loss. In this respect, their interest in the
property has not only become "precarious and defeasible" but has been
effectively abolished. As argued above, the failure to pay them
compensation in these circumstances has been disproportionate to any
alleged public interest, particularly having regard to the fact that
the legislature has relieved the burden in the case of all other
persons in a similar situation.
The applicants further submit that the margin of appreciation
allowed to contracting States under Article 1 of Protocol No. 1 in
implementing planning policy cannot justify a breach of law by the
competent Minister, as distinct from a lawful refusal of planning
permission. As stated above, even such a lawful refusal normally
occasions the right to compensation under Irish law.
Finally, such a breach of law cannot be regarded as a
legitimate risk of a development venture. On the contrary, the
purpose and content of the Planning Code demonstrates that those who
rely on the validity of a permission should be able to do so without
undertaking undue risks.
Article 14 of the Convention
As submitted above, the applicants' constitutional right to
property was interfered with by the breach of law occasioned by the
Minister in purporting to grant outline planning permission in the
knowledge that his decision would be registered and that persons such
as the applicants would be induced to rely thereon. The applicants'
claim in this regard failed in the domestic courts so that this remedy
has now been exhausted.
As regards the claim made in connection with Section 6 of the
1982 Act, the claim is that this provision was drafted in such a way
as to unjustly and arbitrarily discriminate against the applicants by
excluding them from the benefit of retrospective validation of their
planning permission. As argued above, the clear meaning of Section
6 (1) is that at all times, including that period when the issue
raised by Pine Valley was pending before the Supreme Court, the
outline permissions were to be regarded as valid - the very thing
which the Supreme Court in the first Pine Valley case said it was not.
This is the inescapable meaning of Section 6 (1), and it follows from
the decision in the case of Buckley v. the Attorney General that any
application of that Section to the Pine Valley decision would be
unconstitutional. For this reason that decision was clearly excluded
from the benefit of Section 6 (1) by Section 6 (2). Of the three
judges who commented on the point, all three accepted that this was
the case. Furthermore, the judgment of Mr. Justice Lardner refers to
the fact that the Government itself accepted before the Supreme Court
that Section 6 (1) did not apply to the applicants. It is to be noted
that even those persons whose litigation was pending before the courts
at the time of the enactment of the 1982 Act could have decided to
discontinue proceedings in order to gain the benefit of Section 6 (1)
of the 1982 Act.
THE LAW
The applicants complain inter alia that they were denied
compensation for a substantial reduction in the value of their
property following a finding by the courts that a grant of outline
planning permission in respect of that property was invalid.
They submit that the failure to award compensation after having relied
on the validity of the outline planning permission was tantamount to
either a deprivation of property or a control of the use of property
in breach of Article 1 of Protocol No. 1 (P1-1) to the Convention. They
further complain that they are the victims of discrimination in the
enjoyment of their property rights contrary to Article 14 (Art. 14),
since they were the only property owners excluded from the
retrospective validation of their permission conferred by Section 6(1)
of the Local Government (Planning and Development) Act 1982. Finally
they allege that they have been denied an effective remedy under Irish
law in breach of Article 13 (Art. 13) of the Convention.
Article 25 (Art. 25) of the Convention
The Government submit that all three applicants cannot claim
to be victims at the same time. They point out that the first
applicant sold the property to the second applicant for an amount
equivalent to the original purchase price and thus cannot be said to
have incurred any loss. Further, the Government question whether the
application is validly before the Commission in respect of the first
two applicants in view of the fact that the first applicant is likely
to be struck off the register of companies and that the second
applicant is in receivership. Finally, they submit that the
applicants cannot be considered victims since they made no application
for compensation under the relevant provisions of the Local Government
(Planning and Development) Act 1963.
The applicants maintain that all three applicants have
incurred losses and should thus be regarded as victims for purposes of
Article 25 para. 1 (Art. 25-1) of the Convention.
This provision, so far as is relevant, provides:
"The Commission may receive petitions ... from any
person, non-governmental organisation or group of
individuals claiming to be the victim of a violation by one
of the High Contracting Parties of the rights set forth in
this Convention ..."
The Commission notes that both a company and a majority
shareholder can be regarded as victims within the meaning of this
provision (see Kaplan v. the United Kingdom, Comm. Report 17.7.80,
D.R. 21 p. 5 at p. 23). It further notes that the proceedings for
damages before the national courts were brought (after an amended
statement of claim) by all three applicants and that no distinction
was made between them by the courts in the examination of their
claims.
The Commission further notes that it is not contested by the
Government that the third applicant is the sole shareholder of the
second applicant which has been in receivership since 1985. Nor is it
contested that the second applicant is the parent company of the first
applicant. In these circumstances the Commission considers that it is
open to the third applicant to lodge a petition under Article 25
(Art. 25) of the Convention on behalf of the two companies of which he
is sole shareholder, irrespective of the financial standing of the
companies concerned. The Commission observes that it is not necessary
at the admissibility stage to determine whether and to what extent the
applicants have suffered financial loss. It is sufficient for Article
25 (Art. 25) that all three applicants were directly affected by the
matters complained of.
Finally the Commission notes that it is clear, inter alia from
the judgment of the Pine Valley case, that compensation was not
available under the 1963 Act in respect of an outline planning
permission which had been declared a nullity.
Exhaustion of domestic remedies - Article 26 (Art. 26) of
the Convention
The Government further submit that the applicants have failed
to exhaust domestic remedies as required by Article 26 (Art. 26) of the
Convention which provides as follows:
"The Commission may only deal with the matter after all
domestic remedies have been exhausted, according to the generally
recognised rules of international law, and within a period of six
months from the date on which the final decision was taken."
The Government contend that the applicants failed to pursue the
normal remedy available under Irish law in respect of their complaints
namely to seek a declaration from the courts that Section 6(1) applied
to them or, if it did not, that Section 6 or part of it, was pro tanto
invalid under the constitution on the grounds that it constituted an
unjust attack on their property rights and discriminated unfairly
against them (Articles 43 and 40.1 of the Constitution). In addition
the Government maintain that it would have been open to the applicants
to sue the former owner of the land for breach of an implied covenant
as to title or for unjust enrichment.
The applicants submit inter alia that the two latter remedies
would have offered no prospects of success under Irish law. As
regards the possibility of seeking a declaration they point out that
it was clear from the judgment of the Supreme Court in their case
that Section 6(1) did not apply to them and that challenging the
constitutionality of Section 6 could not have succeeded or would have
been futile since the planning permission would have expired by the
time the proceedings had terminated.
The Commission recalls that only remedies which are likely to
provide redress for the applicant's complaints need be taken into
account under Article 26 (Art. 26) (see Eur. Court H.R., Van Oosterwijck
judgment of 6 November 1980, Series A No. 40, pp. 13-14, para. 27).
In particular the existence of such remedies must be sufficiently
certain not only in theory but also in practice, failing which they
will lack the requisite accessibility and effectiveness. Finally, it
falls to the respondent State to establish that these conditions are
satisfied (see Eur. Court H.R., Johnston and Others judgment of
18 December 1986, Series A No. 112, p. 22, para. 45).
As regards the possibility of seeking a declaration that the
applicants were entitled to the benefit of Section 6 (1), the
Commission observes that three judges of the Supreme Court have
indicated that the applicants were excluded from such benefit by the
operation of Section 6(2) of the 1982 Act (see above, pp. 5- 6).
Moreover, in the proceedings before the courts both the applicants and
the respondents in the second Pine Valley case appear to have accepted
that Section 6(2) excluded the applicants (see judgment of Mr. Justice
Lardner, p. 6).
As regards the Government's claim that the applicants could
have sought a declaration that Section 6 or part of it was
invalid under the constitution on the basis that it contravened their
property rights and discriminated against them, the Commission notes the
judgment of Mr. Justice Lardner in the Pine Valley case (see above pp.
6-7) rejecting the argument that there was an unjust and
discriminatory attack on their property rights. Similarly, Mr. Justice
Henchy (with whom Mr. Justice Griffin agreed) found that no injustice
had been done to Pine Valley by the discriminatory effect of Section 6
(see above, pp. 5-6). Both Mr. Justice Lardner and Mr. Justice Henchy
indicated that the purpose of Section 6 (2) was to avoid an
unconstitutional invasion of the judicial domain and to respect the
determination of the courts and the constitutional rights of both
parties in the Pine Valley case (see above, p. 5-7).
The Government have argued that these statements by members of
the Supreme Court concern legal issues which were not argued before
the Court and ought to be regarded as obiter dicta, particularly
since it is clear that the legislature is free to reverse decisions
of the Supreme Court. They point out, with reference to previous
case-law of the Supreme Court, that the legislature is only restricted
from interfering with disputes pending before the courts.
Moreover, it is clear from the explanation given by the responsible
Minister in the debate before Seanad Eireann (Upper House of
Parliament) that Section 6(1) was drafted to preserve the rights of
parties in pending proceedings as opposed to proceedings which had
terminated.
The Commission considers that the observations made by
individual judges were related to the general context of the dispute
before the Supreme Court and clearly support the applicants'
contention that pursuit of the above remedies would have been futile.
Against this background the Commission considers that the
Government have not shown that these remedies would have been likely to
provide redress for the applicants' complaints.
Finally, as regards the remedies for breach of covenant and
unjust enrichment, the Commission notes that there exists substantial
doubt as to whether these suggested actions would have provided a
remedy in respect of any losses incurred by the applicants due to the
invalidity of the outline planning permission. In these circumstances
the Commission is of the opinion that these remedies lack the requisite
certainty for purposes of Article 26 (Art. 26).
The Commission concludes that the applicants, in their choice
of remedy, have done all that could reasonably be expected of them and
have thus exhausted their domestic remedies as required by Article 26
(Art. 26) of the Convention.
Article 1 of Protocol No. 1 (P1-1) and Articles 13 and 14
(Art. 13, 14) of the Convention
The Government submit inter alia that there was no
interference with the applicants' property rights under Article 1 of
Protocol No. 1 (P1-1). They state that the applicants purchased
agricultural land with a view to developing it for industrial purposes
and therefore must be prepared to accept the risks which are attached
to a speculative venture such as the possible annulment of an outline
planning permission. Moreover, this provision does not require the
Government to compensate the purchaser in such a situation.
The Government further contend that no question of
discrimination arises in the present case since the applicants were
not, in fact, excluded from the benefit of Section 6(1) of the 1982
Act. They also maintain that the applicants had an effective remedy
under Irish law as required by Article 13 (Art. 13) of the Convention.
The applicants complain that as a result of the decision of
the Supreme Court of 5 February 1982 the market value of their
property has been reduced to £50,000. They submit that there has
been an unjustified control of the use of their property tantamount to
an expropriation and that they ought to have received compensation for
the losses flowing directly from the Ministers' invalid decision in
1979. They further complain under Article 14 (Art. 14) of the
Convention that they have been unfairly discriminated against since
others similarly affected by this decision of the Supreme Court had
their planning permissions and approvals retrospectively validated by
Section 6(1) of the 1982 Act. Finally, they submit that Irish law has
denied them an effective remedy as required by Article 13 (Art. 13) of
the Convention.
The Commission considers, in the light of the parties'
submissions, that the application as a whole raises complex issues of
law and fact under the Convention, the determination of which should
depend on an examination of the merits of the application.
It concludes that the application is not manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of
the Convention.
For these reasons, the Commission
DECLARES THE APPLICATION ADMISSIBLE
without prejudging the merits of the case
Secretary to the Commission Acting President of the Commission
(H. C. KRÜGER) (J. A. FROWEIN)