J & J Haire Company Ltd and Others v Min for Health and Others

• Jurisdiction: Ireland
• Judge: Mr. Justice McMahon
• Judgment Date: 17 December 2009
• Neutral Citation: [2009] IEHC 562
• Court: High Court
• Date: 17 December 2009

J & J Haire & Company Ltd & Ors v Min for Health & Ors

[2009] IEHC 562

BETWEEN

J. & J. HAIRE & COMPANY LIMITED, THOMASTOWN PHARMACY LIMITED, BORRIS PHARMACY LIMITED, GRAIGNAMANAGH PHARMACY LIMITED AND HAIRE PHARMACY HOLDINGS LIMITED

PLAINTIFFS

AND

THE MINISTER FOR HEALTH AND CHILDREN, THE MINISTER FOR FINANCE, IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

[2009] IEHC 562

[No. 6546 P./2009]

THE HIGH COURT

COMPANY LAW

Statute

Regulations - Validity - Property rights - Contract - Equality - Discrimination - Burden of proof of discrimination - Legislative powers - Ministerial power - Delegation - Principles and policies - Method of promulgating regulations - Whether property rights infringed by alteration of contract - Whether breach of contract in altering contract pursuant to statutory power rather than contractual power - Whether legislation unjust attack on property rights - Whether regulations beyond principles and policies - Whether secondary legislation could take effect prior to publishing - Blake v AG [1982] IR 117, Condon v Minister for Labour (No 2) (Unrep, McWilliam J, 11/6/1980), Hempenstall v Minister for the Environment [1994] 2 IR 20, Shanley v Commissioners for Public Works [1992] 2 IR 477 Moynihan v Greensmyth [1977] IR 55, Hamilton v Hamilton [1982] IR 466 and The Health (Amendment) (No 2) Bill 2004 [2005] IESC 7 [2005] 1 IR 105 considered; Irish Pharmaceutical Union v Minister for Health and Children [2007] IEHC 222 (Unrep, Clarke J, 29/6/2007) distinguished; Cityview Press v An Chomhairle Oiliúna [1980] IR 381 applied; Murphy v AG [1982] IR 241, Brennan v AG [1983] ILRM 449, JD v Residential Institutions Redress Board [2009] IESC 59 (Unrep, SC, 27/7/2009), The Employment Equality Bill, 1996 [1997] 2 IR 321 and Madigan v Attorney General [1986] ILRM 136 applied; Heinrich (Case C-345/06) [2009] 3 CMLR 7, Skoma-Lux v Celní reditelství Olomouc (Case C-161/06) [2007] ECR I-10841 and ROM-projecten v Staatssecretaris van Economische Zaken (Case C-158/06) [2007] ECR I-5103 distinguished - Financial Emergency Measures in the Public Interest (Reduction in Payments to State Solicitors) Regulations 2009 (SI 159/2009) - Health Professionals (Reduction of Payments to Consultant Psychiatrists) Regulations 2009 (SI 172/2009) - Health Professionals (Reduction of Payments to Community Pharmacist Contractors) Regulations 2009 (SI 246/2009) - Statutory Instruments Act 1947 (No 44), s 3 - Statutory Instruments (Amendment) Act 1955 (No 26), s 2 - Financial Emergency Measures in the Public Interest Act 2009 (No 5) ss 9 & 10 - Constitution of Ireland Articles 25.4.1 and 40.3.2 - Claim dismissed (2006/37 HLC - McMahon J - 17/12/2009) [2009] IEHC 562

JJ Haire & Co Ltd v Minister for Health and Children

Facts: The plaintiff pharmacy companies challenged inter alia the constitutionality of Regulations made pursuant to ss. 9 and 10 of the Financial Emergency Measures in the Public Interest Act 2009, which provided Ministerial powers to reduce payments in respect of services provided to the State by various service provides, making a reduction of 8% in most cases. The plaintiffs challenged in particular the Health Professional (Reduction of Payments to Community pharmacy Contractors) Regulations 2009 (SI No. 246 of 2009) and alleged that the Regulations were not published or promulgated in a proper manner, that the Minister did not comply with the consultation procedure mandated in s. 9(4) of the Act of 2009 requiring meaningful consultation, that the Minister exceeded the provisions of the Act in making swingeing reductions and that the reduction in remuneration was disproportionate and unequal and breached the property rights of the plaintiff pursuant to Article 40.3.2 and 43.

Held by McMahon J. that the onus lay on the plaintiffs to challenge the constitutionality of s. 9 of the Act of 2009. No comparative evidence had been shown that suggested that the pharmacists had been treated differently from other health professionals. The Court was not in a position to conclude that the equals were being treated differently or vice versa. The Regulations were not ultra vires the Minister under the Act of 2009. Given the emergency nature of the legislation, the provisions provided a measure of balance and proportionality. Significantly, the Act provided for a review of the operation of the Act and every year after the review, bearing in mind changing circumstances.

Reporter: E.F.

HEALTH ACT 1970 S59(1)

HEALTH ACT 1970 S59(3)

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST (REDUCTION IN PAYMENTS TO STATE SOLICITORS) REGS 2009 SI 159/2009

HEALTH PROFESSIONALS (REDUCTION OF PAYMENTS TO CONSULTANT PSYCHIATRISTS) REGS 2009 SI 172/2009

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST (REDUCTION IN PAYMENTS TO VETERINARY PRACTITIONERS) REGS 2009 SI 216/2009

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S10

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S13

HEALTH PROFESSIONALS (REDUCTION OF PAYMENTS TO COMMUNITY PHARMACY CONTRACTORS) REGS 2009 SI 246/2009 REG 2

HEALTH PROFESSIONALS (REDUCTION OF PAYMENTS TO COMMUNITY PHARMACY CONTRACTORS) REGS 2009 SI 246/2009 REG 3

HEALTH PROFESSIONALS (REDUCTION OF PAYMENTS TO COMMUNITY PHARMACY CONTRACTORS) REGS 2009 SI 246/2009 REG 4

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(4)

HICKEY & ORS v HEALTH SERVICE EXECUTIVE UNREP FINLAY-GEOGHEGAN 11.9.2008 2008/29/6303 2008 IEHC 290

IRISH PHARMACEUTICAL UNION & ORS v MIN FOR HEALTH & ORS UNREP CLARKE 29.6.2007 2007/29/6011 2007 IEHC 222

MADIGAN v AG & ORS 1986 ILRM 136

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(16)

STATUTORY INSTRUMENTS ACT 1947 S3

STATUTORY INSTRUMENTS (AMDT) ACT 1955 S1

STATUTORY INSTRUMENTS ACT 1947 S3(2)

STATUTORY INSTRUMENTS ACT 1947 S3(1)

STATUTORY INSTRUMENTS ACT 1947 S3(3)

CONSTITUTION ART 25.4.1

PROCEEDINGS BROUGHT BY HEINRICH 2009 3 CMLR 7

SKOMA-LUX SRO v CELNI REDITELSTVI OLOMOUC 2007 ECR I-10841 2008 1 CMLR 50

STICHTING ROM-PROJECTEN v STAATSSECRETARIS VAN ECONOMISCHE ZAKEN 2007 ECR I-5103 2007 3 CMLR 21

TREATY OF ROME ART 254(2)

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(7)

CONSTITUTION ART 15.2

CITYVIEW PRESS LTD & FOGARTY v CHOMHAIRLE OILIUNA & ORS 1980 IR 381

INDUSTRIAL TRAINING ACT 1967

CONSTITUTION ART 40.3.2

CONSTITUTION ART 43

BLAKE & ORS v AG 1982 IR 117

ART 26 OF THE CONSTITUTION & PART v OF PLANNING & DEVELOPMENT BILL 1999, IN RE 2000 2 IR 321 2001 1 ILRM 81 2000/16/5933

HOGAN & WHYTE JM KELLY: THE IRISH CONSTITUTION 4ED 2003 1978-1993

CONDON & ORS v MIN FOR LABOUR & AG UNREP MCWILLIAM 11.6.1980

SHANLEY v CMRS OF PUBLIC WORKS IN IRELAND & AG 1992 2 IR 477 1991/13/3280

LANDLORD & TENANT (AMDT) ACT 1980 S4

LANDLORD & TENANT ACT 1931

LANDLORD & TENANT (AMDT) ACT 1980 S4(2)

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(5)

HEMPENSTALL & ORS v MIN FOR ENVIRONMENT 1994 2 IR 20 1993/3/645

HOGAN & WHYTE JM KELLY: THE IRISH CONSTITUTION 4ED 2003 1994-2004

MOYNIHAN v GREENSMYTH 1977 IR 55

HAMILTON v HAMILTON & DUNNE 1982 IR 466 1982 ILRM 290 1982/4/800

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(13)

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(8)

CONSTITUTION ART 43.2.1

ART 26 OF THE CONSTITUTION & HEALTH (AMDT) (NO 2) BILL 2004, IN RE 2005 1 IR 105 2005 1 ILRM 401 2005/29/5927 2005 IESC 7

FINANCIAL EMERGENCY MEASURES IN THE PUBLIC INTEREST ACT 2009 S9(1)

CONSTITUTION ART 40.1

BRENNAN & ORS v AG & WEXFORD CO COUNCIL 1983 ILRM 449 1982/14/2701

BLASCAOD MOR TEORANTA & ORS v CMRS OF PUBLIC WORKS IN IRELAND & ORS (NO 3) 2000 1 IR 6 2000 1 ILRM 401 1999/1/72

MURPHY v AG 1982 IR 241

D (J) v RESIDENTIAL INSTITUTIONS REDRESS REVIEW COMMITTEE & ORS UNREP SUPREME 27.7.2009 2009 IESC 59

BUCKLEY & ORS (SINN FEIN) v AG & POWER 1950 IR 67

ART 26 OF THE CONSTITUTION & EMPLOYMENT EQUALITY BILL 1996, IN RE 1997 2 IR 321 1998/18/6758

R v MINISTER FOR AGRICULTURE, FISHERIES AND FOOD, EX PARTE NATIONAL FARMERS UNION 1998 ECR I-2211

1 Mr. Justice McMahon on the 17th day of December, 2009

1. Introduction and Background

2 Under the Health Act 1970, a new system for providing free general medical services and medicines to eligible persons was introduced. Section 59(1) and 59(3) of the Act imposed on the then Health Boards - now the Health Service Executive ("the HSE") - mandatory obligations to discharge the functions imposed by those subsections, namely to supply without charge medicines and other products to certain eligible persons.

3 Prior to 1970 persons entitled to free medicines obtained the prescribed medicines through the public dispensaries. The new method provided for distribution of medicines, etc., to eligible persons, through the existing network of independent pharmacists spread throughout the country. Clearly, to do this, agreement would have to be reached with the pharmacists. Negotiations were commenced between the Department of Health on behalf of the Minister and the Irish Pharmaceutical Union ("the IPU"), or more properly the Pharmaceutical Contractors' Committee ("the PCC"), on behalf of the pharmacists. A standard template agreement was finalised in a memorandum dated October 1971 and this template was adopted by each pharmacy when it made its individual agreement with the Health Board (now the HSE). The original agreement negotiated in 1971 was amended from time to time and was the contract which the plaintiffs had with the HSE at the time relevant to these proceedings. Further details of this contract will be addressed later in this judgement, but in essence the pharmacists were to distribute the medicines, etc., free of charge to the eligible persons and were to...