Reid v Industrial Development Agency

• Jurisdiction: Ireland
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 05 November 2015
• Neutral Citation: [2015] IESC 82
• Court: Supreme Court
• Docket Number: [S.C. Nos. 442, 446 &453 of 2013],[S.C. Nos. 442, 446 & 453 of 2013]
• Date: 05 November 2015

Between:

Thomas Reid

Applicant/Appellant

and

Industrial Development Agency, Ireland and the Attorney General

Respondents/Appellants

[2015] IESC 82

Mr. Justice William M. McKechnie

Denham C.J.

O'Donnell J.

McKechnie J.

Laffoy J.

Charleton J.

[S.C. Nos. 442, 446 & 453 of 2013]

THE SUPREME COURT

Land – Industrial development – Compulsory powers – Respondent seeking to acquire, by statutory compulsion, the lands, premises and hereditaments of the appellant – Whether the exercise by the respondent of compulsory powers was vitiated by objective bias

Facts: The first respondent, the Industrial Development Agency (IDA), invoked the provisions of the industrial development legislation so as to acquire, by statutory compulsion, the lands, premises and hereditaments of the appellant, Mr Reid, which are situated at Blakestown, Maynooth, Co. Kildare. Mr Reid objected to this proposal and in the judicial review proceedings which issued, he challenged its validity on several grounds, all of which were rejected by the High Court in September, 2013. The appellant appealed to the Supreme Court against the High Court judgment. The exercise by the first respondent of compulsory powers was challenged, as being ultra vires the parent legislation (s. 16 of the Industrial Development Act 1986) and as having been pre-determined by prior judgment, or otherwise as being vitiated by objective bias. In addition, it was alleged that such powers were unconstitutional as being in violation of both personal and property rights given thereby, and also that the same were in breach of the appellant”s rights under both the European Convention on Human Rights and the European Convention on Human Rights Act 2003. The IDA submitted that despite the fact that under the 1986 Act it has the power to take possession of the lands and dwelling by compulsion, it instead sought in the first instance to acquire the lands by agreement. When this failed it made the decision in issue; which decision was made fairly and lawfully based on the material before it and in accordance with the provisions of s. 16 of the 1986 Act. The IDA submitted that the process was entirely open and fully transparent.

Held by McKechnie J that, having considered O”Brien v Bord na Móna [1983] IR 255, the intended acquisition of Mr Reid”s lands was not because such lands were presently required by the IDA, but rather that such were for future use, so that if and when a particular undertaking should seek to develop them, they would be immediately available at such time. In consequence, McKechnie J considered that what the IDA was doing was acquiring a ‘land bank’ for potential and prospective future use. McKechnie J held that s.16 of the 1986 Act did not confer any power on the IDA to acquire lands not required for immediate use, but which might be utilised at some future time; for such to be the case, there would have had to be an express statutory provision to that effect. In light of the constitutional protection given to property rights, and in applying the appropriate principles of construction, it seemed to McKechnie J that the 1986 Act could not be read in the manner suggested by the Authority, even through the process of implication. According, McKechnie J held the making of the compulsory purchase order in November, 2012, to be ultra vires s. 16 of the 1986 Act. McKechnie J held that it could not possibly be an answer to suggest that since the IDA deals only with ‘industrial undertakings’, that fact of itself can give rise to a finding that the proviso has been met; the assessment of due compliance must be case specific. McKechnie J was satisfied that it would be impossible without a particular undertaking having been identified to come to a conclusion that the provisions of s. 25(2) of the 1986 Act had been or could be met. McKechnie J held that the preconditions as specified in s. 16 of the 1986 Act for the exercise by the IDA of its compulsory powers had not been satisfied. Applying the reasonable apprehension test (Bula Ltd v Tara Mines Ltd (No.6) [2004] IR 412), McKechnie J held that a reasonable observer, knowing the importance which the IDA attached to the lands, could reasonably have doubted whether the Chairman was in a position to remain as objective and as impartially detached from the decision, in view of the connecting factor, as otherwise he might have been expected to be.

McKechnie J held that he would allow the appeal.

Appeal allowed.

Judgment of Mr. Justice William M. McKechnie delivered on the 5th day of November, 2015

Introduction:

1 The first named respondent has invoked the provisions of the industrial development legislation so as to acquire, by statutory compulsion, the lands, premises and hereditaments, of the appellant, which are situated at Blakestown, Maynooth, County Kildare. Mr. Reid strongly objects to this proposal and in the judicial review proceedings which issued, he challenged its validity on several grounds, all of which were rejected by the High Court in a judgment delivered on the 19th September, 2013. The resulting appeal, which was advanced on the same grounds as those originally presented, now forms the subject matter of this judgment. Depending on the decision arrived at the cross-appeal by each respondent on the question of costs may or may not arise.

2 Of the grounds relied upon, some are of particular interest to the first named respondent in that the exercise by it of compulsory powers is challenged, as being ultra vires the parent legislation and secondly, as having been pre-determined by prior judgment, or otherwise as being vitiated by objective bias. In addition, it is alleged that such powers are unconstitutional as being in violation of both personal and property rights given thereby, and also that the same are in breach of the appellant's rights under both the European Convention on Human Rights and the European Convention on Human Rights Act 2003. Therefore, the case, by reason of the issues raised, is of considerable significance to both parties, but obviously for quite distinct and different reasons.

The Lands and the House:

3 Subject to pecuniary legacies which are not relevant, the appellant is the owner in fee simple of the lands and premises comprised in Folio 1104 of the Register of Freeholders, County Kildare. The holding comprises 72 acres of farmland on which is located the family farmhouse known as ‘Hedsor House’ together with associated outbuildings and garden area. These lands were originally operated as a dairy farm, but since 1996 they have been used for grazing dry stock. The appellant, who is the third generation of Reids' to farm these lands having been acquired by the family in 1904, has lived on the farm all his life, and since he left school in 1979, he has worked fulltime on its operations. He became solely responsible for the enterprise on the death of his father in 1983 and he is now in exclusive occupation of the lands. He wishes to continue to live in his home and to remain a farmer. He therefore has no interest in selling or being forced to sell such lands.

4 ‘Hedsor House’ is a protected structure, registered as such, in the Record of Protected Structures in the Kildare county development plan and has been for several years; it can be dated to circa 1760. Neither the house nor the lands are located within any area identified for development in either the county plan or the relevant local area plans. As the holding is situated immediately to the west of the ‘development’ boundary for Leixlip, it is in fact subject to the County Plan (2011 to 2017) rather than to any local plan. Accordingly, the provisions of ‘Section 10.5’ which is headed ‘Rural Development’, apply. This means that the lands which are not specifically zoned shall be regarded as being primarily agricultural in ‘use’ terms. Furthermore, the land is located in the Rye Water Valley at Carton and it is bound to the west by Carton House Demesne, a Natura 2000 site. The house is also a protected structure, and as expressly stated in the county development plan, it is the local authority's policy to maintain views to and from the house and within the demesne itself. To the east, a short distance away, is the extensive Information and Communications Technology (‘ICT’) facility operated by Intel. Therefore, when one is considering the potential for industrial development of these lands, the same must be evaluated having regard to their location and to the proximity of both neighbouring structures and adjoining lands.

The IDA:

5 The first named respondent, which was originally established by the Industrial Development Authority Act 1950, continued to exist in that form until the enactment of the Industrial Development Act 1993 (‘the 1993 Act’). Pursuant to s. 5 thereof, a new body to be known as ‘Forfás’ was created, with two agencies to be known respectively as ‘Forbairt’ and the ‘Industrial Development Agency (Ireland) (IDA)’. The functions of the IDA were specified in s. 8 of the 1993 Act, with s. 9 making provision for the assignment to it of the powers and functions formerly conferred by the Industrial Development Act 1986 (‘the 1986 Act’). In 1995, it was made clear that notwithstanding any other statutory provision, the IDA continued to have the powers set out in s. 16 of the 1986 Act. That body has, as its primary focus, the securing of foreign direct investment through establishing, developing and attracting industrial undertakings, into and within the State. It has the power to make investments in and provide support to such undertakings, and also to make available grants and other financial facilities as the occasion allows or demands. Throughout its entire history the IDA has met considerable success, with the economic impact...