Joan Collins v Minister for Finance and Others

• Jurisdiction: Ireland
• Judgment Date: 26 November 2013
• Neutral Citation: [2013] IEHC 530
• Date: 26 November 2013
• Docket Number: [2013 No. 4961P]
• Court: High Court

Collins v Min For Finance & Ors

(DIVISIONAL COURT)

BETWEEN/

JOAN COLLINS

PLAINTIFF

AND

THE MINISTER FOR FINANCE, IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

[2013] IEHC 530

MR. JUSTICE KELLY

MRS. JUSTICE FINLAY GEOGHEGAN

MR. JUSTICE HOGAN

[No. 4961 P./2013]

THE HIGH COURT

CONSTITUTIONAL LAW

Government

Challenge to constitutionality of provision of financial support to credit institutions - Bank guarantee - Executive branch of government - Vires and constitutionality of procedures by which promissory notes issued - Whether public moneys could be voted and appropriated without specification of upper limit - Legislative framework - Locus standi - Mootness - Vires of ministerial powers - Budgetary process - Scope of ministerial discretion - Whether legislation contained sufficient principles and policies - Whether legislation conferred unfettered and unreviewable discretionary power - Whether concept of appropriate implied upper limit - Objects and effects of appropriation requirements - MacDonncha v Minister for Education [2013] IEHC 226, (Unrep, Hogan J, 29/5/2013); Hall v Minister for Finance [2013] IEHC 38, (Unrep, Kearns P, 31/1/2013); City View Press Ltd v An Chomhairle Oiliuna [1980] IR 381; McDaid v Sheehy [1991] 1 IR 1; Laurentiu v Minister for Justice [1999] 4 IR 26; McGowan v Labour Court [2013] IESC 21, (Unrep, SC, 9/5/2013); State (Lynch) v Cooney [1982] IR 337 and Mallak v Minister for Justice [2012] IESC 59, [2013] 1 ILRM 73 considered - Credit Institutions (Financial Support) Act 2008 (No 18), ss 2 and 6 - Constitution of Ireland 1937, Arts 5, 15, 17, 22 and 28 - Claim dismissed (2013/2961P - Divisional High Court - 26/11/2013) [2013] IEHC 530

Collins v Minister for Finance

Facts: The plaintiff was a Dáil Deputy for the constituency of Dublin South Central who brought proceedings challenging the legality and constitutionality of the procedure whereby significant financial support was given to two credit institutions: Anglo Irish Bank and Educational Building Society. This support was given to the institutions in the form of promissory notes on the 17th June 2010 and the 22 December 2010, such notes not having been subjected to a vote by Dáil Éireann. In response to serious financial difficulties that credit institutions were experiencing in 2008, the Credit Institutions (Financial Support) Act 2008 ('the 2008 Act') was enacted into law on the 2nd October 2008 to provide financial support to these institutions. Section 6 of that Act outlined the powers of the Minister for Finance ('the Minister') to give the requisite financial support, which according to s. 1 included a loan, a guarantee, an exchange of assets and any other kind of financial accommodation or support. At s.6(3), it was outlined how the Minister"s power in this regard would expire on 29th September 2010. However, the Financial Measures (Miscellaneous Provisions) Act 2009 amended this section to state that the Minister"s power to give financial assistance to credit institutions would expire on 29th September 2010 or a later date specified by the Minister. The Minister subsequently extended this deadline from time to time by way of statutory instrument.

The Plaintiff argued that the Minister appropriated large sums of public funds in favour of the two credit institutions without there being an opportunity to vote on such a measure being taken. Dáil Éireann had originally voted in favour of the Minister having this power until the 29th September 2010, but the Minister was given the power to extend this deadline without a vote from parliament following the passing of Financial Measures (Miscellaneous Provisions) Act 2009. It was the extended deadline that the two promissory notes were given under (which had been set at 31st December 2015 by that stage) and they both outlined how there were to be payments made after the 31st December 2015. It was argued that by specifying that repayments should be made after this date, the Minister had acted ultra vires. The plaintiff also stated that it was undemocratic for an individual who was technically independent of Dáil Éireann to be able to use such power without input from the legislative sphere; and that s. 6 of the 2008 Act was, therefore, unconstitutional.

Held by Kelly J, Finlay Geoghegan J and Hogan J that in regards to the argument that the Minister"s action in issuing two promissory notes was illegal, it was said that under s. 6(3) of the 2008 Act (as amended) the Minister was entitled to make promissory notes on the dates that he did and that they could specify when repayments were to be made even if that was after the deadline when the Minister"s power to issue promissory notes would expire. Such a situation had been envisaged and permitted by the amendments that were included pursuant to the Financial Measures (Miscellaneous Provisions) Act 2009. Instead, it was said that s. 6(3) (as amended) prohibited the keeping in place of promissory notes after the deadline or the payment of financial support under the note after that deadline. The Minister was, therefore, determined to have acted legally.

In regards to the constitutionality challenge, it was held that it was clear from the provisions of the Constitution of Ireland that the appropriation of public money involves the participation of the Government, the Dáil and, in the case of the enactment of legislation, the wider Oireachtas. Such functions were required in order for the democratic nature of the state as outlined in Article 5 of the Constitution to be realised. It was also pointed out that Article 15.2.1 of the Constitution provided a safeguard by requiring any legislation delegating discretionary powers (such as the powers under which the Minister issued the promissory notes) must contain sufficient 'principles and policies' to satisfy the requirements of that Article. Applying those provisions, it was held that s. 6(3) of the 2008 Act was not unconstitutional because the 'principles and policies' test was satisfied and because it did not give the Minister any unrestricted discretion, namely through s. 2 of the 2008 Act which limited the exercise of the powers. However, there had been no challenge to s. 2. The particular section was, therefore, determined to be constitutional.

Claim dismissed.

CONSTITUTION ART 5

MACDONNCHA v MIN FOR EDUCATION UNREP HOGAN 29.5.2013 2013 IEHC 226

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(3)

FINANCIAL MEASURES (MISC PROVISIONS) ACT 2009

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

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S74

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 PART 1

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

IRISH BANK RESOLUTION CORPORATION ACT 2013 S17

HALL v MIN FOR FINANCE & ORS UNREP KEARNS 31.1.2013 2013 IEHC 39

IRISH BANK RESOLUTION CORPORATION ACT 2013 S17(1)

FINANCE ACT 1970 S54

CENTRAL FUND (PERMANENT PROVISIONS) ACT 1965

CONSTITUTION ART 17.1.2

POSTAL & TELECOMMUNICATIONS SERVICES ACT 1983

PUBLIC HOSPITALS (AMDT) ACT 1990 S6

CONSTITUTION ART 28.4.4

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

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

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

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

CONSTITUTION ART 11

CONSTITUTION ART 17

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

ANGLO IRISH BANK CORPORATION ACT 2009 S33

IRISH BANK RESOLUTION CORPORATION ACT 2013 S17(2)

CONSTITUTION ART 15.2.1

CONSTITUTION ART 17

CONSTITUTION ART 28.4.1

CONSTITUTION ART 28.4.4

CONSTITUTION ART 33

CONSTITUTION ART 33.2

CONSTITUTION ART 17.1.1

CONSTITUTION ART 22.1.1

CONSTITUTION ART 21.1.1

CONSTITUTION ART 21.1.2

CONSTITUTION ART 17.2

CONSTITUTION ART 17.1.2

CONSTITUTION ART 5

CONSTITUTION ART 11

CONSTITUTION ART 28

CITY VIEW PRESS LTD v ANCO 1980 IR 381

MCDAID v SHEEHY 1991 1 IR 1

LAURENTIU v MIN FOR JUSTICE 1999 4 IR 26

MCGOWAN & ORS v LABOUR COURT & ORS UNREP SUPREME 9.5.2013 2013 IESC 21

CITYVIEW PRESS v AN CHOMHAIRLE OILIUNA 1980 IR 381

INDUSTRIAL TRAINING ACT 1967 S21

INDUSTRIAL TRAINING ACT 1967 S21(3)

INDUSTRIAL TRAINING ACT 1967 S21(4)

INDUSTRIAL TRAINING ACT 1967 S21(6)

IMPOSITION OF DUTIES ACT 1957 S1

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

STATE (LYNCH) v COONEY 1982 IR 337

MALLAK v MIN FOR JUSTICE 2013 1 ILRM 73 2012 IESC 59

CONSTITUTION ART 15

CONSTITUTION ART 21

CONSTITUTION ART 22

CONSTITUTION ART 28

Part I - Introduction

1 1. The plaintiff is a Dáil Deputy for the constituency of Dublin South Central. She was first elected following the General Election which was held in February, 2011. In these proceedings the plaintiff challenges the vires and constitutionality of the procedure whereby over €30bn. was given by the State by way of financial support to two particular credit institutions, namely, Anglo Irish Bank and Educational Building Society. This was done by means of promissory notes issued by the Minister for Finance on various dates in 2010. The impugned promissory notes are those issued to EBS and Anglo on 17 ^th June 2010 and 22 December 2010 respectively. It is agreed that there was no separate vote in Dáil Éireann in respect of these notes. Apart from the intrinsic importance of the validity of this procedure, the plaintiff has also raised a series of constitutional questions in relation to the operation of the State's finances many of which have heretofore received little or no judicial consideration.

The bank guarantee...