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
Mrs. G. H. THUNE
Sir Basil HALL
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 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 firstnamed 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.
21° 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."
1The 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.
2The 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.
3The 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.
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
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 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
without prejudging the merits of the case
Secretary to the Commission Acting President of the Commission
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