O'Donoghue v South Kerry Development Partnership Ltd

JudgeMr Justice Max Barrett
Judgment Date26 May 2016
Neutral Citation[2016] IEHC 259
CourtHigh Court
Docket NumberRecord No. 2013/624 JR
Date26 May 2016

[2016] IEHC 259


Barrett J.

Record No. 2013/624 JR

Notice Party

Environment – Order of certiorari – Operational Procedures Manual and Operating Rules – Planning permission – Legitimate expectation

Facts: Following work on the development of the mountain and the cliffs as a farm tourism project pertaining to the Ireland-EU rural development scheme known as the LEADER programme and failure of an application for further funding in respect of certain drainage and tarring works, the applicants sought an order of certiorari for quashing the decisions taken by the respondent and to grant the excess fund spent on the project. The applicants contended that the criteria by which applicants fell to be measured had already been applied in accordance with the Procedures and Rules. The applicants claimed that the respondents had departed from the established Procedures and Rules. The applicants further contended that the pre-published criteria had been unfairly changed. The applicants claimed that the decision inversely affected the legitimate expectation.

Mr Justice Max Barrett held that the application for an order of certiorari for quashing the decision of the respondent would be denied. The Court observed that the respondent would not be bound by the actions of the Evaluation Committee. The Court stated that the respondent had duly departed from the Procedures or Rules in agreeing or applying the additional criteria settled upon. The Court stated that the subject application had gone through the usual process as no express assurances were offered by the respondent relating to the methodology employed in the straitened circumstances.

JUDGMENT of Mr Justice Max Barrett delivered on 26th May, 2015.
Part 1

Geokaun Mountain and the Fogher Cliffs in County Kerry are true John Hinde material. Beautiful in themselves, they offer panoramic views back across Valentia Island and out towards the grey-blue expanse of the wide Atlantic Ocean. The mountain and cliffs, and the land and ocean views that they afford, have been identified by Fáilte Ireland as one of fifty scenic “secrets” of Ireland – though one suspects that, with the publication of this judgment, the secret is out, at least among the legal community.


Mr O'Donoghue, a farmer from Feighmane West, together with his wife, has spent the last few years developing the mountain and cliffs as a farm tourism project. It has been a considerable success:in recent years, the O'Donoghues have had about 20,000 visitors per annum. As one would expect, husband and wife seek continuously to enhance the visitor experience. They have erected a shelter and ticket station, built an initial 1,500metre looped path, and done landscaping and other works.


Back in August 2013, when the statement required to ground his application for judicial review was sworn, Mr O'Donoghue estimated that he and his wife had to that time invested about €182k of their own money in the project, to which can be added a further €71k of funding that was paid to them under an Ireland-EU rural development scheme known as the LEADER programme. It is a largely unsuccessful application for further LEADER funding in respect of certain drainage and tarring works which has led to the present proceedings.

Part 2
Government Cutbacks

In early-2013, the Department of the Environment advised the circa. 50“local development companies” with responsibility for, inter alia, the nationwide distribution of LEADER funds – of which South Kerry Development Partnership Limited (SKDP) is one– that the funds available for the LEADER scheme would be reduced from €400m in that year to €370m. At the same time, the Department ordered an embargo on payments under the scheme, pending the completion of an audit into the scheme's operation.


Notably, the just-mentioned embargo did not stop applications for LEADER funding from being assessed; it merely meant that no payments could be made. There was good reason why assessments would be continued despite the embargo. The general understanding was that when the embargo came to be lifted, payments out would likely be required to be done within a relatively tight timeframe. If assessments had not continued throughout the duration of the embargo, projects that would otherwise have been eligible for funding would likely have missed out on funding because there would not have been the time to assess them before the narrow window of opportunity closed.

Part 3
SKDP's Assessment and Approval Process

The disbursement of millions of euro of Government and EU funding is naturally subject to a comprehensive set of rules. The court has been referred, in this regard, to an Operational Procedures Manual (the “Procedures”)and lengthy Operating Rules (the “Rules”) drawn up under the auspices of, inter alia, the Department of Community, Rural and Gaelteacht Affairs. In accordance with the said Rules and Procedures, SKDP administers applications for LEADER funding in the following way:

(1) Applications are first evaluated by SKDP's Evaluation Committee. Its role is to evaluate projects and make recommendations concerning the funding of same to SKDP's board of directors.

Members of the Committee tend to be drawn from relevant sectoral bodies such as the County Enterprise Board, Forbairt and Fáilte Ireland, that are possessed of expertise in the types of developments with which the LEADER programme is concerned.

Under Rule 5(4) of the Rules:

‘The role of the Evaluation Committee is to make recommendations to the Board [of SKDP] who then make the final decision on projects’.

(2) All applications recommended by the Evaluation Committee go to the board of directors for final sanction. Rule 5(2) of the Rules states, inter alia, as follows:

‘The Board…is the decision-making authority in relation to all Programme related activities…. All Board decisions shall be made in conformity with…[inter alia] EU regulations, National legislation [etc.]…. Any decisions at variance with the recommendations of the Evaluation Committee and the reasons for doing so shall be clearly documented in the Board Minutes’.


In short, the Evaluation Committee and the SKDP board of directors appear to have a relationship similar to that which exists, for example, between a credit committee and the board of directors in a bank. The credit committee, typically comprising credit and other experts, may recommend that a large loan be approved but this recommendation can always meet with a contrary and overriding view at board-level, as can happen also when Evaluation Committee recommendations go to the SKDP board, its being, as mentioned above, ‘the decision-making authority in relation to all Programme related activities’.


Prior to 4th June, 2013, it appears from the evidence before the court that the SKDP typically operated a “first recommended, first funded” approach to its dealings, so that approved projects were funded in a chronological sequence, each up to the full amount approved by the board, until the entirety of the available funds were expended. This system obviously worked an unfairness to those projects that were worthwhile ventures but came later in the chronological sequence; however, some sort of system had to be devised upon and likely any system that seeks to be generally fair will invariably run the risk of some individual unfairness: such is life.


Some attempt was made during the proceedings to read a requirement for such a chronological approach into Rule 8.1 of the Rules which, insofar as relevant in this regard, provides:

‘A decision on an application must not be postponed indefinitely or delayed, having regard to the possibility of funds becoming exhausted or the ending of the Programme.’


All the court sees in the last-mentioned obligation is a requirement that a local development company, here SKDP, should not act sluggishly in its despatch of applications for the reasons stated, and nothing more.

Part 4
The Processing of Applications in 2013
A. February to May 2013

At meetings of February, March and May 2013, SKDP's Evaluation Committee assessed a total of 119 applications. One of these applications was later withdrawn. All of the applications so assessed were recommended to the board of directors for approval.


In late-May 2013, SKDP was advised by the Department for the Environment, etc. that the above-mentioned embargo was being lifted. In a letter of 29th May, it relayed this information to all applicants, noting, inter alia, that ‘[SKDP] has suffered a 20% budget cut on its original allocation. The result is that SKDP will not have sufficient grant aid for all projects evaluated to date in 2013’.


The precise cash difficulties presenting were not advised in the letter. However, SKDP was in fact facing a situation where roughly €4.1m of funding had been recommended by the Evaluation Committee and only €1.5m of funding was available to SKDP to disburse.


While one might perhaps wonder at the efficacy of a vetting system that sees so many projects recommended for funding when there is comparatively little funding available, it should have been clear to anyone who received the letter of 29th May, and it would certainly have been clear to anyone senior within SKDP, that a problem was “bubbling up” through SKDP that would have to be resolved.

B. The Board Meeting of 4th June, 2013.

At its meeting of 4th June, 2013, SKDP's board of directors resolved to approve certain criteria that it would apply when judging Evaluation Committee recommendations, presumably so that the fairest disbursement of funding would ensue. The board...

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