J. & J. HAIRE & COMPANY Ltd v MINISTER for HEALTH

• Jurisdiction: Ireland
• Judgment Date: 17 December 2009
• Date: 17 December 2009
• Docket Number: [2009 No. 6546 P]
• Court: High Court

[2009] IEHC 562,

High Court

[2009 No. 6546 P]

J. & J. Haire & Company Ltd. v. Minister for Health

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 Minster for Finance, Ireland and The Attorney General

Defendants

Cases mentioned in this report:-

An Blascaod Mór Teo. v. Commissioner of Public Works (No. 3)[2000] 1 I.R. 6; [2000] 1 I.L.R.M. 401.

Attorney General v. Southern Industrial Trust (1957) 94 I.L.T.R. 161.

Blake v. The Attorney General [1982] I.R. 117; [1981] I.L.R.M. 34.

Brennan v. Attorney General [1983] I.L.R.M. 449.

Buckley and Others (Sinn Fein) v. Attorney General and Another. [1950] I.R. 67.

Cityview Press v. An Chomhairle Oiliúna [1980] I.R. 381.

Condon v. Minister for Labour (No. 2) (Unreported, High Court, McWilliam J., 11th June, 1980).

J.D. v. Residential Institutions Redress Board[2009] IESC 59, [2010] 1 I.R. 262.

The Employment Equality Bill, 1996 [1997] 2 I.R. 321; [1996] 2 I.L.R.M. 374.

Foley v. The Irish Land Commission and Another[1952] I.R. 118.

Hamilton v. Hamilton [1982] I.R. 466; [1982] I.L.R.M. 290.

The Health (Amendment) (No. 2) Bill 2004 [2005] IESC 7, [2005] 1 I.R. 105; [2005] 1 I.L.R.M. 401.

Heinrich (Case C-345/06) [2009] 3 C.M.L.R. 7; [2009] W.L.R. (D) 93 [ECJ].

Hempenstall v. Minister for the Environment [1994] 2 I.R. 20; [1993] I.L.R.M. 318.

Hickey v. Health Service Executive [2008] IEHC 290, [2009] 3 I.R. 156.

Irish Pharmaceutical Union v. Minister for Health[2007] IEHC 222, (Unreported, High Court, Clarke J., 29th June, 2007).

Madigan v. Attorney General [1986] I.L.R.M. 136.

Moynihan v. Greensmyth [1977] I.R. 55.

Murphy v. The Attorney General [1982] I.R. 241.

O'Brien v. Keogh [1972] I.R. 144.

O'Brien v. Manufacturing Engineering Co. Ltd. [1973] I.R. 334.

Pigs Marketing Board v. Donnelly (Dublin), Ltd.[1939] I.R. 413.

The Planning and Development Bill, 1999 [2000] 2 I.R. 321; [2001] 1 I.L.R.M. 81.

R. v. Minister for Agriculture, Fisheries and Food ex parte National Farmers' Union (Case C - 157/96) [1998] E.C.R. I-221.

ROM-projecten v. Staatssecretaris van Economische Zaken (Case C-158/06) [2007] E.C.R. I-5103; [2007] 3 C.M.L.R. 21.

Shanley v. Commissioners for Public Works in Ireland[1992] 2 I.R. 477.

Skoma-Lux v. Celníøeditelství Olomouc (Case C-161/06) [2007] E.C.R. I-10841; [2008] 1 C.M.L.R. 50.

Constitution - Statute - Regulations - Validity - Contract - Property rights - 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 of primary Act - Whether secondary legislation could take effect prior to its publication - Financial Emergency Measures in the Public Interest (Reduction in Payments to State Solicitors) Regulations 2009 (S.I. No. 159) - Health Professionals (Reduction of Payments to Consultant Psychiatrists) Regulations 2009 (S.I. No. 172) - Health Professionals (Reduction of Payments to Community Pharmacist Contractors) Regulations 2009 (S.I. No. 246) - 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§.

Plenary summons

The facts have been summarised in the headnote and are more fully set out in the judgment of McMahon J., infra.

The proceedings were commenced by plenary summons issued on the 17th July, 2009. The case was heard by the High Court (McMahon J.) on the 27th, 28th, 29th and 30th October and the 3rd, 4th, 5th, 6th and 10th November, 2009.

The plaintiffs were pharmacists engaged in the provision of medicines to eligible members of the public under a contract agreed with the Health Service Executive. That contract allowed the first defendant ("the Minister"), after consultation with a pharmacist's representative body, to approve or direct the rates to be paid in return for the provision of services under the contract. It also provided that nothing in the contract was to interfere with the statutory functions of the Minister.

In response to a downturn in the public finances the Government introduced the Financial Emergency Measures in the Public Interest Act 2009 ("the Act") which allowed for the reduction of amounts paid by the State to certain persons, including pharmacists. Pursuant to powers under this Act, the Minister introduced the Health Professionals (Reduction of Payments to Community Pharmacist Contractors) Regulations 2009 ("the Regulations") which reduced payments made to pharmacists under the scheme.

The plaintiffs brought proceedings challenging the constitutionality of both the Act of 2009 and the Regulations. They argued, inter alia, that the Act was unconstitutional in so far as it allowed the Minister to unilaterally alter contracts between the plaintiffs and the Health Service Executive; that the contractual property rights which they enjoyed under their contract with the Health Service Executive had been infringed in an arbitrary, capricious and discriminatory manner; that the Minister had exceeded her powers under the Act and was not merely giving effect to its principles and policies in introducing the Regulations; that the Regulations infringed the principles of equality in that other professionals received a lesser reduction in their rates; that the Minister had failed to engage in a meaningful consultation with pharmacists as required under the Act and that the Regulations were not published or promulgated in a proper manner in that they were signed prior to being laid before the Houses of the Oireachtas. They further argued that the Minister had acted in breach of contract by failing to employ the provisions of the contract to alter the rates payable under it.

Held by the High Court (McMahon J.), in refusing the relief sought, 1, that the plaintiffs' constitutional property rights were no more or no less than those they enjoyed under the contract. As the Minister was entitled to vary the rates under the contract, the varying of those rates pursuant to a statutory power did not infringe any constitutional right of the plaintiffs.

Blake v. The Attorney General [1982] I.R. 117; Condon v. Minister for Labour (No. 2) (Unreported, High Court, McWilliam J., 11th June, 1980); Hempenstall v. Minister for the Environment[1994] 2 I.R. 20 andShanley v. Commissioners for Public Works in Ireland[1992] 2 I.R. 477 considered; Irish Pharmaceutical Union v. Minister for Health [2007] IEHC 222, (Unreported, High Court, Clarke J., 29th June, 2007) distinguished.

2. That the reduction of the rates in question did not constitute an unjust attack on the plaintiffs' property rights as alleged by them. The Act of 2009 was a measured, proportionate and carefully drawn response to an unprecedented economic crisis and had a number of significant safeguards contained in it.

Moynihan v. Greensmyth [1977] I.R. 55;Hamilton v. Hamilton[1982] I.R. 466 and The Health (Amendment) (No. 2) Bill 2004 [2005] IESC 7, [2005] 1 I.R. 105 considered.

3. That the purpose of the Act of 2009 was to reduce State spending and the reductions effected by the Minister in introducing the cuts were merely giving effect to that purpose. The Minister had not, therefore, gone beyond the principles and policies contained in the legislation itself.

Cityview Press v. An Chomhairle Oiliúna [1980] I.R. 381 applied.

4. That the Minister had not acted in breach of contract in choosing to engage in a consultation process established in the legislation rather than that provided for in the contract itself, particularly since the process contained in the legislation was more onerous and afforded the plaintiffs more protection. The plaintiffs had also failed to offer any evidence that the consultation process which had taken place with regard to the reductions in payments was inadequate.

5. That the plaintiffs had failed to offer any evidence of unequal treatment and they bore the burden of proof in this regard. The mere fact that the reduction in payments to pharmacists was greater than that to other professionals was not sufficient to show unequal treatment since no comparative evidence of the circumstances or contracts of those other professionals had been tendered to the court. In any event the equality protection under the Constitution extended to humans only and could not be relied upon by companies or other legal entities.

Murphy v. The Attorney General [1982] I.R. 241;Brennan v. Attorney General[1983] I.L.R.M. 449;J.D. v. Residential Institutions Redress Board[2009] IESC 59, [2010] 1 I.R. 262 and The Employment Equality Bill, 1996[1997] 2 I.R. 321 applied.

6. That the promulgation of the Regulations complied with the requirements of Irish law and the plaintiffs had not, in any event, been prejudiced by any perceived shortcomings in this regard.

Madigan v. Attorney General [1986] I.L.R.M. 136applied; Heinrich (Case C-345/06) [2009] 3 C.M.L.R. 7,Skoma-Lux v. Celníøeditelství Olomouc (Case C-161/06) [2007] E.C.R. I-10841 and ROM-projecten v. Staatssecretaris van Economische Zaken (Case C-158/06)[2007] E.C.R. I-5103 distinguished.

Cur. adv. vult.

McMahon J. 17th December, 2009

Introduction and background

[1] 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 (3) of the Act imposed on the then Health Boards - now the Health Service Executive ("the H.S.E.") -...