Hall v Min for Finance and Others

• Jurisdiction: Ireland
• Judge: Kearns P.
• Judgment Date: 31 January 2013
• Neutral Citation: [2013] IEHC 39
• Court: High Court
• Docket Number: [2012 No. 3230 P]
• Date: 31 January 2013

[2013] IEHC 39

THE HIGH COURT

[No. 3230 P/2012]

Hall v Min for Finance & Ors

BETWEEN

DAVID HALL

PLAINTIFF

AND

MINISTER FOR FINANCE, IRELAND, THE ATTORNEY GENERAL AND THE CENTRAL BANK OF IRELAND

DEFENDANTS

AND

THE IRISH BANK RESOLUTION CORPORATION AND THE EDUCATIONAL BUILDING SOCIETY

NOTICE PARTIES

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S1

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S2

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(12)

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(1)

CONSTITUTION ART 17

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(3)

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(3A)

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(4)

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) SCHEME 2008 SI 411/2008

CREDIT INSTITUTIONS (ELIGIBLE LIABILITIES GUARANTEE) SCHEME 2009 SI 490/2009

CREDIT INSTITUTIONS (ELIGIBLE LIABILITIES GUARANTEE) SCHEME 2009 SI 470/2010

CREDIT INSTITUTIONS (ELIGIBLE LIABILITIES GUARANTEE) (AMENDMENT) (NO. 2) SCHEME 2010 SI 546/2010

CREDIT INSTITUTIONS (ELIGIBLE LIABILITIES GUARANTEE)(AMENDMENT) SCHEME 2011 SI 634/2011

CREDIT INSTITUTIONS (ELIGIBLE LIABILITIES GUARANTEE) (AMENDMENT) SCHEME 2012 SI 519/2012

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) ORDER 2009 SI 488/2009

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) ORDER 2010 SI 471/2010

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE NO.2 ) ORDER 2010 SI 548/2010

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) ORDER 2011 SI 256/2011

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) (NO. 2) Order 2011 SI 636/2011

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) ORDER 2012 SI No. 225/2012

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) (FINANCIAL SUPPORT DATE) (NO. 2) ORDER 2012.SI 520/2012

EXCHEQUER & AUDIT DEPARTMENT ACT 1921

MINISTERS & SECRETARIES ACT 1924 (AMD)

CONSTITUTION ART 33

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) BILL 2008

CREDIT INSTITUTIONS (FINANCIAL SUPPORT) ACT 2008 S6(15)

EXCHEQUER & AUDIT DEPARTMENTS ACT 1866 S14

ADAPTATION OF ENACTMENTS ACT 1922

CONSTITUTION 1922 ART 37

CONSTITUTION ART 17.2

CONSTITUTION ART 33.1

FINANCE ACT 1970 S54

FINANCE (NO2) Act 1981 S18(1)

FINANCE ACT 1970 S54(1)

CAHILL v SUTTON 1980 IR 269

KELLY IRISH CONSTITUTION 4ED 2003

STATUTE OF LIMITATIONS 1957 S11(2)

EAST DONEGAL CO-OPERATIVE v AG 1970 IR 317

CONSTITUTION ART 17

CROTTY v AN TAOISEACH 1987 1 IR 713

MCKENNA v AN TAOISEACH (NO 2) 1995 2 IR 10, 1996 1 ILRM 81

T (D) v MINISTER FOR EDUCATION 2001 4 IR 259

RIORDAN v GOVT OF IRELAND 2009 3 IR 745

CONSTITUTIONAL LAW

Statute

Validity -Locus standi - Ius tertii - Delay in bringing application - Support to financial institutions - Promissory notes - Whether litigant's rights infringed or threatened - Whether justification for relaxation of locus standi rules - Whether appropriate plaintiff existed - Cahill v Sutton [1980] IR 269; Crotty v An Taoiseach [1987] IR 713; TD v Minister for Education [2001] 4 IR 259; East Donegal Co-Operative Livestock Mart Ltd v Attorney General [1970] IR 317; McKenna v An Taoiseach (No 2) [1995] 2 IR 10 and Riordan v Government of Ireland [2009] IESC 44, [2009] 3 IR 745 considered - Credit Institutions (Financial Support) Act 2008 (No 18), s 6 - Constitution of Ireland 1937, Article 17 - Claim dismissed (2012/3230P - Kearns P - 31/1/2013) [2013] IEHC 39

Hall v Minister for Finance

PRACTICE AND PROCEDURE

Locus standi

Provision of financial support to certain institutions by means of special investment shares and promissory notes - Plaintiff seeking declaration that provision of financial support without vote by Dáil Éireann unlawful - Plaintiff not a member of Dáil Éireann - Whether plaintiff attempting to assert ius tertii - Whether plaintiff suffering particular prejudice - Whether delay in bring application by plaintiff - Whether plaintiff having locus standi - Cahill v Sutton [1980] IR 269 applied - Crotty v An Taoiseach [1987] IR 713; McKenna v An Taoiseach (No 2) [1995] 2 IR 10 distinguished - Riordan v Government of Ireland [2009] IESC 44, [2009] 3 IR 745 considered - Claim dismissed (2012/3230P - Kearns P - 31/1/2013) [2013] IEHC 39

Hall v Minister for Finance

Facts: The plaintiff was a private citizen who sought to challenge the validity of a mechanism introduced by the Minister for Finance whereby financial support by means of promissory notes was provided to three financial institutions in 2010. He contended that financial support provided pursuant to s. 6 Credit Institutions (Financial Support) Act 2008 constituted an appropriation of funds in violation of Article 17 of the Constitution. He sought a declaration that the appropriate of revenue was unlawful, given that the Minister had been authorised otherwise than by vote of Dáil Éireann. The defendants alleged that the plaintiff lacked locus standi to mount this particular challenge and could not assert any damage to him which was unique or distinct from that which affected all other citizens.

Held by Kearns P that the plaintiff was endeavouring to assert jus tertii. The Court would dismiss the claim of the plaintiff on the basis that he lacked locus standi.

1 JUDGMENT of Kearns P. delivered on the 31st day of January, 2013

2 The plaintiff in these proceedings is an Irish citizen who operates a private ambulance company employing some 70 staff in the State. He has brought these proceedings to challenge the validity of the mechanism or procedures adopted by the Minister for Finance whereby financial support by means of promissory notes was provided to three financial institutions in 2010. He is not a member of the Oireachtas but brings these proceedings as a taxpayer and concerned citizen.

3 In the aftermath of the banking crisis which led to the bank guarantee provided by the Government in September 2008, the Oireachtas thereafter passed the Credit Institutions (Financial Support) Act 2008 (hereinafter "the Act") on 2 ^nd October, 2008. It quickly became apparent that, over and above the Government guarantee, various credit institutions, including the notice parties herein, required capital support. During the course of 2009 and 2010, a total of €4.1 billion was provided to Anglo Irish Bank (to which the assets of Irish Nationwide Building Society were transferred in July, 2011) in the form of ordinary equity and special investment shares (the consideration for which was cash) and a total of €30.6 billion in the form of capital contributions (the consideration for which was promissory notes provided by the State). Anglo Irish Bank changed its name to Irish Bank Resolution Corporation (IBRC) on 14 October, 2011. As the promissory notes could be written up for full value in the accounts of the recipient financial institution, the institution in question thereby remained solvent and, in the case of IBRC, the promissory notes are pledged as collateral for Exceptional Liquidity Assistance funding provided to IBRC under a special master repurchase agreement with the Central Bank of Ireland. The total capital thus provided to IBRC was €34.7 billion. Capital was also provided to the Educational Building Society (EBS) by way of €625 million in the form of special investment shares and €250 million by way of a promissory note.

4 In making this provision, the Minister for Finance relied upon the provisions of the Credit Institutions (Financial Support) Act 2008 which, in its long title, is described as:-

"An Act to provide, in the public interest, for maintaining the stability of the financial system in the State and for that purpose to provide for financial support by the Minister for Finance in respect of certain credit institutions, to amend the Competition Act 2002 and other enactments, and to provide for connected matters."

5 "Financial support" was defined in s. 1 of the Act as including a loan, a guarantee, an exchange of assets and any other kind of financial accommodation or support.

6 Section 2 of the Act (in unamended form) provided as follows:-

7 2 "(1) The Minister has, in the public interest, the functions provided for under this Act because, after consulting the Governor and the regulatory authority, the Minister is of the opinion that-

8 (a) there is a serious threat to the stability of credit institutions in the State generally, or would be such a threat if those functions were not performed,

9 (b) the performance of those functions is necessary, in the public interest, for maintaining the stability of the financial system in the State, and

10 (c) the performance of those functions is necessary to remedy a serious disturbance in the economy of the State."

11 Section 6 of the Act authorises the Minister to provide financial support for credit institutions as and from the relevant date (being 30 ^th September, 2008) as follows:-

12 2 "(1) As and from the relevant date, the Minister may provide financial support in respect of the borrowings, liabilities and obligations of any credit institution or subsidiary which the Minister may specify by order having regard to the matters set out in s. 2, the extent and nature of the obligations (including the degree of control over possible abuse of the financial support) undertaken and which might be undertaken in the future and the resources available to him or her in that behalf.

13 (2) In subsection (1) a reference to borrowings, liabilities and obligations includes borrowings, liabilities and obligations to the Central Bank or any person.

14 (3) Financial support shall not be provided under this section for any period beyond 29 ^th September 2010, and any financial support provided under this section shall not continue beyond...