Glencar Exploration p.l.c. v Mayo County Council (No. 2)

• Jurisdiction: Ireland
• Judge: Keane C.J.,FENNELLY J.
• Judgment Date: 19 July 2001
• Neutral Citation: [2001] IESC 64
• Court: Supreme Court
• Docket Number: [1992 No. 149 JR; S.C. Nos. 323 of 1998 and 61 of
• Date: 19 July 2001

GLENCAR EXPLORATION PLC & ANDAMAN RESOURCES PLC v. MAYO CO COUNCIL

BETWEEN:

GLENCAR EXPLORATION PLC. AND ANDAMAN RESOURCESPLC.

Applicants

AND

THE COUNTY COUNCIL OF THE COUNTY OFMAYO

Respondents

[2001] IESC 64

KEANE C.J.

DENHAM J.

MURRAY J.

McGUINNESS J.

FENNELLY J.

323/98 & 61/00

THE SUPREME COURT

Abstract:

Judicial review - Negligence - Liability of local authorities - Mining ban - Duty of care - Economic loss - Liability for damages - Respondent included unlawful mining ban in development plan - Applicants prospecting in area of ban - Misfeasance in public office - Breach of statutory duty - Legitimate expectation - Whether constitutional rights of applicants breached - Whether applicants entitled to damages or compensation - Whether reasonable to impose duty of care on respondent for benefit of applicants - Local Government (Planning and Development) Act, 1963 (No 28) Part 3.

The respondent had purported imposed a mining ban in the development plan for County Mayo. The applicants challenged the imposition of the ban and in the High Court Mr. Justice Blayney held that the ban was ultra vires in a judgment delivered on 13th November, 1992. In a subsequent action the applicants sought damages on a number of grounds. Mr. Justice Kelly held, inter alia, that misfeasance in public office had not been established as the respondent while acting unlawfully did so honestly. A breach of a statutory duty owed to the public at large did not give rise to a claim in damages by a particular individual. While common law negligence may be established in the way the respondent made its decision damages were not recoverable as the parties did not have a relationship sufficiently proximate to establish a duty of care. Furthermore the applicants did not have a frustrated legitimate expectation to planning permission giving rise to an entitlement to damages. In addition no property right of the applicants could be said to be interfered with. On appeal, the Chief Justice, Mr. Justice Keane was prepared to reserve his view on whether the ban was in fact ultra vires. There was no relationship of "proximity" between the applicants and the respondent which would render it reasonable to impose liability on the respondent. A duty of care could not be said to have arisen. Mr. Justice Fennelly delivered a concurring judgment holding that the mere fact of an ultra vires decision did not confer a right to compensation. In addition the doctrine of legitimate expectation could not be said to have arisen. The appeal was dismissed.

1 19th day of July 2001byKeane C.J.

Keane C.J.

The factual background

2 The facts in this case, to the extent that they are not in dispute, are summarised with such admirable clarity in the High Court judgment under appeal, that I can limit myself, for the purposes of this judgment, to a relatively brief résumé.

3 The applicants are two publicly quoted companies engaged in prospecting for and mining ores and minerals. On the 30th May 1968, they were granted ten prospecting licences by the Minister for Energy for the purpose of exploring for gold in an area south of Westport in Co. Mayo. Those licences were renewed from time to time and, during the period from the date on which they were granted to the adoption by the respondents of what has been described as a "miningban" in the County Mayo Development Plan on 17th February 1992, they expended a sum of £1,938,264 in prospecting for gold in the relevant areas. In July 1990, Mr. McCullough, the managing director of the first applicant, had written to the respondents pointing out that the applicants" exploration work in south Mayo was well advanced and that they hoped to develop a gold mine in the area.

4 Although the results of the prospecting activities were highly encouraging, the applicants were of the view that, if the gold which appeared to exist in these areas was to be commercially mined, a further substantial investment would be required. They accordingly entered into a joint venture agreement with a company called Newcrest Mining Ltd., one of the largest Australian gold producers (hereafter "Newcrest") in November 1991. Under that agreement, Newcrest were to spend at least £1.6 million on further exploration and, in return, was to be given a 51% interest in the venture. InFebruary 1992, however, Newcrest withdrew from the joint venture as a direct result, the applicants alleged, of the inclusion in the county development plan of the mining ban.

5 The applicants then applied for and were granted leave to institute the present proceedings by way of judicial review in the High Court, in which they claimed inter alia the following reliefs:-

6 (1) Declarations that the respondents were not empowered by the relevant legislation to include the mining ban in the County Mayo Development Plan and that it was ultra vires the legislation, unreasonable and contrary to constitutional and/or natural justice;

7 (2) An order of certiorari quashing so much of the development plan as included the mining ban; and

8 (3) Damages for negligence and breach of duty, including breach of statutory duty.

9 A statement of opposition having been filed on behalf of the respondents, the substantive hearing of the claim for judicial review came on before Blayney J. In a reserved judgment delivered on the 13th November 1992 and reported in (1993) 2 IR at p. 237, he granted the declaration sought by the applicants thatthe mining ban was ultra vires the respondents' powers under the relevant legislation and was, accordingly, null and void. The applicants' claim for damages was adjourned with liberty to apply.

10 The learned High Court judge found that the inclusion of the mining ban was ultra vires the respondents on two grounds:-

11 (1) That a development plan under Part 3 of the Local Government (Planning and Development) Act 1963(hereafter "the 1963 Act") must consist of a written statement and plan indicating the development objectives for the area of the planning authority, that such development objectives must be positive in character and that an objective which aims to prevent development cannot be such an objective;

12 (2) That the use of land for the purpose of winning and working of minerals is prima facie exempted development under the relevant regulations, that only An Bord Pleanála may determine whether such development is or is not exempted development and that, accordingly, the respondents could not, as a matter of law, include the mining ban in their development plan.

13 The applicants had relied on a further ground in support of their claim, i.e. that the mining ban was in breach of the policy of the governmentasconveyed to them in a letter dated the 16th December 1991 written on behalf of the Minister for Energy and that, accordingly, the respondents had not had regard, as they were statutorily obliged to do, to the policy of the government. The learned High Court judge, however, while satisfied that the respondents had acted in disregard of government policy, did not find it necessary to come to any conclusion as to the effect in law of their having done so, having regard to his conclusion that, in any event, the mining ban was ultra vires.

14 On the 1lth December 1995, the applicants brought a notice of motion seeking directions as to the time and mode of trial of the applicants' claim for damages. It was ordered by consent that points of claim and defence should be delivered, that discovery should be made by both parties and that the applicants should be at liberty to amend their claim for damages by extending it to a claim for damages for breach of duty not to inflict damage by acting ultra vires and to respect the applicants' legitimate expectations, for misfeasance in public office and for wrongful interference with the applicants' constitutionalrights.

15 The application came on for hearing before Kelly J. In his written judgment delivered on the 20th August 1998, the learned High Court judge dismissed the applicants' claim for damages. In particular, while finding that the respondents were negligent in adopting the mining ban, in the sense thatthey did something which no reasonable authority would have done, he was satisfied that the negligence in question did not give rise to any right to damages.

16 The applicants have appealed to this court from the dismissal by the learned High Court judge of their claim for damages. While no notice to vary the judgment in the High Court was served on behalf of the respondents, arguments were advanced to this court on the hearing of the appeal to the effect that the findings of negligence by the High Court judge were erroneous in point of law.

The mining ban

17 It is now necessary to consider in some more detail the circumstances in which the mining ban was adopted by the respondents.

18 The question as to whether mining should be permitted in the Westport area gave rise to acute controversy in the early 1990s. It had come to a head with the work carried out by Burmin Exploration and Development Plc. and Tara Mines Plc. on the slopes of Croagh Patrick. There was similar opposition to a proposed development by Ivernia West in an area about a mile south east of the Westport urban district area.

19 When the applicants obtained their prospecting licences, the development plan which had been made by the respondents under Part 3 of the 1963 Act did not contain a mining ban. In 1990, a new draft development plan was put on public display by the respondents. Paragraph 3.6.1 of the draft plan, dealing with mineral extraction, was as follows:-

"It is clear that there are large potential mineral resources within the county from the scale of exploration currently underway. Development of these resources will have major implications for the environment, water resources, acquaculture, tourism andemployment."

Policy

"It is the...