Neutral Citation:  IEHC 260
THE HIGH COURT
[2013 No 3150 S]
ALLIED IRISH BANK
FRANCIS O’BRIEN AND MICHAEL FINGLETON
JUDGMENT of Ms. Justice Baker delivered on the 27th day of March, 2015
1. The plaintiff in these proceedings seeks summary judgment against the defendants arising out of a loan facility granted to them jointly and severely in or around the month of October 2006. The first defendant has consented to judgment being entered against him for the amounts claimed and the motion for judgment has proceeded against the second defendant only. The second defendant has sworn two replying affidavits in respect of the motion, the first on the 18th June, 2014, and the second on the 31st July, 2014.
2. The motion is grounded on the affidavit of Joe Lyons sworn on the 25th March, 2014 in which is exhibited a facility letter of the 4th October, 2006 addressed to Mr Fingleton at his personal address which contains the terms on which the Bank offered to lend to Mr Fingleton the sum of €4.6 million. A similar letter was sent to the first defendant, a former member of Seanad Éireann, also at his personal address, and the terms of each of the letters are identical. The stated purpose of the loan was the purchase of two tracts of land, one comprising 9.6 acres of zoned agricultural land at Laragh, Co. Monaghan, and the other comprising 6.25 acres of zoned agricultural at Corcagham, Co. Monaghan. The loan was stated to be repayable on demand and at the pleasure of the Bank and was subject to interest roll over for one year and “clearance in full at that time”.
3. The letter outlined six special conditions, most of which related to the security to be provided, but special condition three provided that the Bank would have full, joint and several recourse to both borrowers. Charges were to be put in place over the lands intended to be purchased, which were to be held in the sole name of the first defendant, and a charge was to be created by him over other lands stated to be in his name, the precise beneficial interest in which is unclear from the documentation.
4. The interest rate has been a matter of some controversy in the course of the hearing before me and I set out in full the provisions in the letter of sanction relating to interest: “Prime rate vary plus 1.5%, currently 5% per annum”.
5. The letter stated that the loan offer was also subject to the Bank’s General Terms and Conditions Governing Business Lending contained in a booklet dated March 2006, and a copy was stated to be enclosed. There is in bold print the following statement: “These are legal documents and should be read very carefully”.
6. The loan was drawn down and while certain difficulties arose with regard to the putting in place of the charges by way of security, this matter has not been raised as a possible defence in the proceedings.
7. The statement of account exhibited in the grounding affidavit of Joe Lyons shows transactions on the account since the monies were drawn down on the 27th October, 2006 and from this it is apparent that small payments were credited to the account from time to time, the last of which was in June 2009, and interest and surcharge interest has been applied to the outstanding balance from time to time. No argument is raised with regard to the amount of surcharge interest and I note that in general surcharge interest was charged at zero percent, apart from on one or two occasions during the currency of the loan.
8. As at the date of the swearing of the grounding affidavit the amount stated to be owed was the sum of €5,454,279.29, calculated up to the 7th June, 2013.
2) Mr Fingleton said that he is entitled to the benefit of Consumer Protection Codes, and in particular the Code issued by the Central Bank in 2006. He no longer asserts that he is a “consumer” for the purposes of those Codes but points to the fact that parts of the Code apply to persons defined as “customers” of regulated financial entities, and asserts that he was at all material times a customer for that purpose and entitled to the benefit of that part of the Code in force at the time the contract of loan was concluded.
3) He asserts that the Bank had a duty to invite and consider submissions from him before making demand under the facility and/or before commencing these proceedings. In that context he asserts that certain public law obligations arise having regard to the status of the Bank as a body charged with performing its functions in the public interest pursuant to the s.48 of the Credit Institutions (Stabilisation) Act 2010, that an obligation has arisen to afford him fair procedures, and that as the bank refused to engage with him and to consider the submissions he sought to make, the demand is not properly made. He argues that he has a bona fide claim that he was entitled to be heard by the Bank before it made demand on him and that in those circumstances the matter is not properly before the Court.
10. I will consider each of these possible defences in turn but before doing this I turn to consider the law that governs the entry of judgment on foot of a summary summons.
12. Various formulae have been used to describe the test and in essence the test is that a court has to be satisfied that it is clear, or perhaps very clear, that a defendant has no case and that there is no issue to be tried, or that the issues are clear and can be resolved without oral evidence.
13. Clarke J. in G.E Capital Woodchester Limited & Anor. v. Aktiv Kapital & Ors.  IEHC 512 stressed the latitude a court should in general afford a defendant and that an indulgence would be given to a defendant who could show that certain evidence helpful to his defence was likely to exist but was not yet available to him until discovery or interrogatories. He made the point however that it was not open to the defendant on a summary judgment application “to make a vague and generalised contention which would amount to nothing more than an assertion that something useful to his case might turn up on discovery or the like”. The test requires that there be a credible basis for an assertion, and a perhaps fair way to characterise the test when there is a conflict of fact is that a defendant’s stated defence must be taken at its height, and on the basis that facts alleged will be proven by him or her.
14. The matter is different however where the defence urged by a defendant is based on legal argument and Clarke J. in Chadwicks Ltd. v. Byrne Roofing Ltd.  IEHC 47 took the view that when the defence depended on an issue of law it was a matter for the court to determine whether that issue could be tried on a summary motion or whether it required to be remitted for further consideration at a plenary hearing. Issues involving mixed questions of fact and law would in general not fall within the category of what he described as a “sufficiently nett or straight forward” legal question.
15. The matters sought to be raised by the second defendant in defence are similar in characterisation to those identified by Charleton J. in Danske Bank v. Durkan New Homes  IEHC 278 where he gave the example of a case involving a construction of a document which might involve a question of law, and Charleton J. went further perhaps than Clarke J. had gone in the earlier cases in saying that it was “the obligation of the court to resolve” a question of law arising on affidavit evidence, rather than having the matter remitted to plenary hearing. While the Supreme Court on appeal in that case  IESC 22, rejected the suggestion that there might be an obligation on the court to resolve a question of law, it accepted that the court may do so, and stressed that the test for the court was whether the defendant had a established an arguable defence.
16. The court then has a discretion whether to enter upon a hearing of a summary motion when legal questions are raised and may remit the entire matter for plenary hearing even if no issues of fact are in dispute, or even if the issues of fact are to be resolved in favour of a defendant.
17. There is nothing straight forward or simple about the legal arguments that are made by the defendant in this case but they are in my view questions that can be resolved at this stage on a summary application and I take the view that the issues may be resolved by me without a plenary hearing and that no injustice would be caused to the second defendant by my so doing. In that regard I note that full arguments were made by counsel for both sides and each of them fully argued the relevant legal points with the assistance of a substantial number of authorities and statutory provisions.
18. I will consider the various defences raised by the defendant in the context of this test as I deal with each one of them.
The terms of the contract
20. The general terms and conditions have been exhibited in affidavits before me and I note in particular that clause 5 deals with the determination of the applicable interest rates and identifies various categories of rates including premium business, market related, and the one relevant to the loan sanction in issue in this case, “prime” interest rates. Prime interest rates are referred to in a number of places in the general conditions but no identified interest rate is of course contained therein as this rate changes and is stated to change weekly or more or less frequently, and the various rates are stated to be, and are in fact, advertised in nationally circulating newspapers. Mr Fingleton does not state on affidavit that he was unaware from time to time of what the precise interest rates were on the facility but he does say that the Bank “failed to furnish me with the full details of the interest rate terms applicable to the facility”. He says he is “confident in my recollection that the terms in respect of the calculation of the prime rate were not given or sent to me”.
21. Mr Fingleton’s argument with regard to the fact, and it is accepted by me as a fact for the purposes of this motion, that he did not receive the general conditions of lending, is that he denies that the Bank’s claim for interest is properly calculated or properly claimed in that he was unaware of the contractual rate said to be applicable to his loan. When pressed, his counsel accepts that it is possible to sever the claim for interest from that for the principal sum due, and an approximate figure of €1,200,000 is claimed by the Bank in respect of interest.
22. It seems to me that I can resolve this part of the claim without remitting the claim to plenary hearing. In that regard I note and follow the statement of Finlay Geoghegan J. in AIB plc v. Galvin Developments, which I mention above, to the effect that the incorporation of the bank’s general terms and conditions was done by means of the well established principle of contract law that terms may be incorporated into a contract by express reference. I adopt the following dicta by her in that case, in which the defendants had also sought to rely on the failure of the bank to furnish the general conditions, as follows:-
24. I consider that no injustice would be done to the second defendant were I to now come to a conclusion with regard to his argument that the non availability of the general terms and conditions at the time of the contract offer him an arguable or bona fide defence. I have read the general conditions and nothing in those conditions, apart from the provisions relating to the determination of the interest rates from time to time, is relevant to the defence raised by Mr Fingleton, and he can identify no term or condition contained in the general terms on which he might rely in defence. In particular I note that the specific contractual terms identified in the letter of loan sanction made this facility repayable on demand, albeit there was a short interest roll-up period, which expired after one year. I note also that the interest rate is identified as being 1.25% over prime rate, stated as then being 5%. Mr Fingleton has not argued before me, nor could it be credibly said having regard to the evidence before me, that interest ever came to be applied at a rate greater than prime rate plus the 1.2% additional rate agreed expressly to apply to the loan. The relevant applicable rate is identified in each and every Bank statement which was sent to Mr Fingleton at the address in the facility letter and the address that he identifies as his residential address in his replying affidavits. The interest rates changed very frequently indeed and I note by way of example that the rate was changed on the 11th December 2007, 18th December 2007, 28th December 2007, 2nd January 2008, 8th January 2008 and the 15th January 2008. Only on two occasions did the rate fall to be applied above 6.125%, the rates expressly first identified in the letter of sanction. Nowhere in his affidavit does the applicant, the second defendant, assert that he did not receive the bank statements, and I reject the argument by Mr Fingleton that he did not understand, nor contractually agree to the variation of the rates from time to time in accordance with the Bank’s “prime” rate. Those rates were identified on a very frequent basis in bank statements which appear to have been sent at least once a year and which identify changes in the interest rates, and on any given page of the statements the rate is shown as varying up to 10 or 15 times in a year.
25. Mr Fingleton does not assert that he did not agree to pay interest on his loan, he does not assert that the rate was fixed, he does not assert that a different rate of interest was applicable. He does not assert that what was applied by the Bank was a rate other than the prime interest rate plus 1.25%. He was the chief executive of a major Irish bank at the time of this loan facility and, while I would not be prepared to extrapolate much with regard to his knowledge of the plaintiff Bank’s internal affairs and interest calculations from that mere fact alone, it cannot be a matter of insignificance that the second defendant would well have understood the contents of his annual statements of account, the fact that the interest rate which was applied to his loan varied and was described as being a “prime rate”, and the fact that the prime rates were advertised in national newspapers from time to time. Even were it to be accepted that, even accepting as I do, he did not receive the general terms and conditions of commercial lending, nothing in those general terms adds to the characterisation of the interest rate as prime plus 1.25%, nor does anything in the general conditions add to the way in which that rate is calculated, save to say that the rate varies from time to time, and the fact that the rate varies is clear on the letter of loan sanction itself.
26. Taking the second defendant’s case at its height, then, it seems to me that he has not made an arguable defence that the plaintiff is not entitled to charge interest on the monies advanced, and at the rates claimed and the non availability of the general conditions add nothing of substance to the terms of the loan as contained in the letter of offer.
27. Before I conclude my observations with regard to this ground of defence I note that counsel made an argument, albeit perhaps with less force than other arguments he made, that the absence of the general conditions had the effect that there was no consensus ad idem between the Bank and the second defendant, such that the second defendant is not contractually bound, and that there was no contract or that no terms and conditions of lending were agreed. In that regard I adopt the dicta of Finlay Geoghegan J. in AIB plc v. Galvin Developments, cited above, and I hold that as a matter of law, and without needing to hear any further oral evidence on the matter, the general terms and conditions were incorporated by reference in this contract. I also find assistance from the judgment of Clarke J. in ACC Bank plc v. Kelly & Anor.  IEHC 7 where the court, albeit on a full plenary hearing, considered inter alia the argument that the defendants were unaware that their loan was a demand facility. At para. 7.5 Clarke J. noted the position of a person who signs a document without adequately reading it and makes the following comment:-
29. This is not a contract that is required to be made in writing, but it was a contract in respect of which many of the terms were reduced to writing. Some of the terms would in the normal way have been negotiated, and Mr Fingleton asserts that it was the first defendant who negotiated the terms and conditions. I have no doubt having regard to the amount of the loan and the particular status of the first defendant as a member of the Oireachtas and the second defendant as the chief executive of a large bank in Ireland, that the loan facility and the applicable interest rates were negotiated and agreed in as favourable terms as were available. In that regard I note that while the land was to be purchased by the two borrowers jointly the legal title was to be held by the first defendant only. Complex arrangements needed to be put in place in those circumstances to properly protect the interests of Mr Fingleton in the purchase, and those complex arrangements could not have been reached and agreed to by the Bank without some negotiations and agreement on the somewhat unusual terms on which the borrowing was to happen. The loan was a full recourse loan and Mr Fingleton, and the first defendant, would have had reason to seek to protect their private assets from any claim of the Bank, which further supports my view that the second defendant must be held to be bound by the general conditions of the Bank’s commercial lending, and these conditions were ones in which he had or ought to have had a personal interest.
30. Accordingly, I reject the argument that the second defendant has an arguable ground of defence arising from the argument that he did not receive the general terms and conditions at the time he signed the letter of loan offer.
The Consumer Protection Code August 2006
32. Accordingly, and this is accepted by counsel for the second defendant, he is confined in his argument with regard to the applicability of the Code to chapter one of the Code which is entitled “General Principles”, and those general principles apply to customers of a regulated bank.
33. A customer is defined as follows:-
35. Chapter one of the Code is the applicable part and it sets out in twelve numbered paragraphs the general principles which govern the dealings of a regulated entity with its customers. The chapter requires that such a regulated entity “must ensure that in all its dealings” it complies with these general principles. The principles are broadly stated as an obligation to act honestly, fairly, with due care and skill, not to act recklessly or negligently, not to exert undue pressure or undue influence, to correct errors, handle complaints, and to prevent access to basic financial services. The second defendant relies on one element in the list namely that at entry six which I quote in full, and which requires a regulated bank to make :-
37. It is asserted by the second defendant that the precise status of the regulatory codes issued by the Central Bank under the relevant enabling legislation is as yet not clear. I am pointed to a long line of authorities including Zurich Bank v. McConnon  IEHC 75, Stepstone Mortgage Funding v. Fitzell Ltd.  IEHC 142, Irish Life and Permanent plc v. Duff  IEHC 43, ICS Building Society v. Lambert  IEHC 581 and my own judgment in Ryan v. Dankse Bank  IEHC 236, as illustrations of the extent to which the status of the Code has yet to be definitively determined.
38. I have already noted in my judgment of Ryan v. Danske Bank that the two “currents” which can be identified in recent case law evolved in two classes of remedies, those relating to claims for possession by a bank of which Stepstone Mortgage Funding v. Fitzell Ltd., Irish Life and Permanent plc v. Duff and ICS Building Society v. Lambert are examples, and those relating to claims for debt where no discretionary element exists at common law and where none can be imported or is required to be imported from the Code.
39. However it seems to me irrespective of any perceived difference in the authorities that this case falls to be considered in the context of the first case of which I am aware where the legal status of the Code came to be considered. This is the judgment of Birmingham J. in Zurich Bank v. McConnon and it is of particular note that that judgment related to a loan which had been advanced before the 1st July, 2007 when the 2006 Code came into operation save with regard to the general principles applicable to customers which I have outlined above, and which are the sole elements of that Code on which Mr Fingleton may seek to rely.
40. Laffoy J. in Stepstone Mortgage Funding v. Fitzell Ltd. pointed to the fact that Birmingham J.’s comments with regard to the Code were obiter, and she correctly so characterised his comments in that Mr McConnon claimed to be, but was held not to be, a consumer for the purposes of the Code. However Birmingham J.’s comments with regard to the position and role of the general conditions of the Code contained in chapter one, are directly referable to the issue that arises in this case, and that defendant also placed reliance on those general principles, arguing that these general conditions implied a term into the contract between the parties, breach of which created rights for the defendant. Birmingham J., assuming for the purposes of the argument that the general conditions in the Code did apply, took the view that they did not assist the defendant as there is nothing in the Code, or in the power of the Financial Regulator to administer sanctions for the contravention of the Code under Part IIIC of the Central Bank Act 1942, to suggest “that a breach of the code renders the contract null and void or otherwise exempts the borrower from the liability to repay”.
41. Birmingham J. noted the difficulties from the general law of contract with regard to implied terms, and the common law requirement that such a term would pass the “officious bystander” test and went on to say the following which does inform my thinking:-
43. The last case in the line of authorities dealing with the effect of the Code is the judgment of McGovern J. in Freeman & Anor. v. Bank of Scotland & Ors.  IEHC 284, delivered on the 29th May, 2014. In that case one issue that arose was the Bank’s Code of Practice on the transfer of mortgages and a second document entitled “Assets Securitisation” McGovern J., having reviewed the authorities from Zurich Bank v. McConnon through to the judgment of Ryan J. in ACC Bank plc. v. Deacon  IEHC 427 made the following comment:-
45. In the circumstances and having regard to the authorities I consider that breach of the general conditions in the Code of Conduct of 2006, the only part of that Code applicable at the time the loan was advanced to Mr Fingleton, does not afford him an arguable defence to the claim for judgment, and he has identified no breach of the Code which would be actionable even were it to be shown that the Code had become incorporated into his contract with the Bank. The height of Mr Fingleton’s argument is that the Bank failed to furnish him with details of charges applicable to his loan, and as I have already held that the details were incorporated into the signed loan documentation, I am of the view that the Bank has shown sufficient compliance with its obligations under the Code
46. I am not satisfied that the second defendant has shown that he has an arguable defence on this ground.
Was the Bank obliged to afford natural or constitutional justice?
48. The second defendant argues that the bank failed to engage with his submissions, and indeed he goes further and says that the bank failed to invite submissions from him before the letter of demand and the proceedings issued. He asserts that the plaintiff bank is a public body, is almost wholly state owned and must for that reason be amenable to the application of principles of public law and he says, and there can be no denying this, that the service of a letter of demand by the Bank is an adverse decision which can, and did in fact, impact on his property and financial interest. He relies on the judgment of the Supreme Court in Dellway Investments Ltd. v. NAMA  4 IR 1, the judgment of Finlay Geoghegan J. in Treasury Holdings v. NAMA  IEHC 297, and the judgment of Cregan J. in Flynn v. NALM  IEHC 408
49. He makes the point that the status of the Bank was affected by the Credit Institutions (Stabilisation) Act 2010 (the “Act of 2010”) enacted inter alia to protect the State’s interests in respect of guarantees given by the State to support the relevant financial institutions and that the plaintiff Bank being a bank that obtained the benefit of this guarantee, is by virtue of the Act obliged to “align its activities with the public interest and other purposes of the Act.”
50. Counsel for the Bank argues that the Bank is not a public body, albeit that it is almost wholly State owned but that even if the Bank is a public or State body in a general sense that not all functions of the Bank can be characterised as public functions, and that the power of the Bank to demand repayment was one that arises from a wholly private contract into which there cannot be imported a public law obligation of fairness. He also points to the fact that shares in the company are traded on the Stock Exchange, and that while it may be a state owned body its private banking functions are not public functions amenable to public law remedies and protections.
51. I will consider the arguments in two parts, first by reference to the Act of 2010 and second by reference to the line of authority on the statutory functions of NAMA and its associated entities.
Discussion on the Credit Institutions (Stabilisation) Act 2010
and whereas it is necessary, in the public interest, to maintain the stability of those credit institutions and the financial system in the state;
and whereas the functions and powers conferred by this act are necessary to secure financial stability and to effect a reorganisation of certain credit institutions;
and whereas the considerable financial support provided by the state to certain credit institutions has helped those institutions to meet their financial and regulatory obligations;
and whereas the urgent reorganisation of certain credit institutions is of systemic importance to the state;”
(2) The duty imposed by subsection (1)—
(a) is owed by the directors to the Minister on behalf of the State, and
(b) takes priority over any other duty of the directors to the extent of any inconsistency.
(3) The Minister may make and publish guidelines in relation to the duty imposed by subsection (1). A director may rely on any such guidelines in demonstrating his or her compliance with that duty.
(4) If the Minister is of the opinion that it is no longer necessary for this section to apply in relation to a particular relevant institution, he or she may so order.
(5) The Minister shall lay a copy of an order under subsection (4) before each House of the Oireachtas as soon as may be after the order is made.”
(i) to facilitate the availability of credit in the economy of the State,
(ii) to protect the State’s interest in respect of the guarantees given by the State under the Act of 2008 and to support the steps taken by the Government in that regard,
(iii) to protect the interests of taxpayers,
(iv) to restore confidence in the banking sector and to underpin Government support measures in relation to that sector, and
(v) to align the activities of the relevant institutions and the duties and responsibilities of their officers and employees with the public interest and the other purposes of this Act”
56. The starting point for the distinction between powers and duties which come within the realm of public law is the decision of Finlay C.J. in Beirne v. Commissioner of An Garda Síochána  1 I.L.R.M 1 where he at p. 2 of the judgment of the Supreme Court said the following:-
Where the decision being carried out by a decision making authority, as occurs in this case, is of a nature which might ordinarily be seen as coming within the public domain, that decision can only be excluded from the reach of the jurisdiction in judicial review if it can be shown that it solely and exclusively derived from an individual contract made in private law.”
58. Denham J. expressly referred to Beirne v. Commissioner for An Garda Síochána in her decision, but it is to be noted that the question she was asking was whether the duty being performed by the employer, in the first case the Garda Commissioner, and in the second case the Fire Service “is of a nature which might ordinarily be seen as coming within the public domain”.
59. In Treasury Holdings v. NAMA Finlay Geoghegan J. applied the principles from Beirne v. Commissioner for An Garda Síochána and O’Donnell v. Tipperary (South Riding) County Council and held that the statutory framework which established NAMA was such that it brought NAMA within the realm of public law in the performance of its functions, and she noted that the right to make the decisions impugned in that case did not “derive solely from contract or the consent or agreement of Treasury”. NAMA’s entitlement to exercise the lender’s rights, formerly the rights enjoyed by the mortgagee or chargee of the various security documents executed by Treasury which entitled it inter alia to appoint a receiver, was a right which NAMA acquired from the participating institution, the lender, by operation of law pursuant to s. 90 of the Act and by virtue of the provisions of s. 99 and in some instances s. 147 of the Act. In particular NAMA was required by the legislation to exercise its discretion to enforce “for the purpose of achieving its public interest, statutory purposes as set out in s. 10”.
60. Cregan J. followed the judgment of Finlay Geoghegan J. in Treasury Holdings v. NAMA in his judgment in Flynn v. NALM, and held that the decision of NALM to call in the Flynn loans involved the exercise by that body of a public power, thus bringing into play the right of the plaintiff to be heard, and the duty on the part of NALM to act fairly and in a reasonable manner.
61. The first question I must determine is whether the decisions made by the plaintiff in respect of the defendant are within the public realm. I accept that the State is a majority or almost the full owner of the shareholding in the Bank. The Bank is engaged in commercial activities, but it is not for its commercial duties an entity through which the executive powers of the State are exercised, and it does not advance money on behalf of the State or collect money on behalf of the State. The State collection of monies advanced to the banks has to some extent been hived off to other entities in the form of NAMA and NALM, which has been given the statutory function of recovering monies advanced by the State. NAMA and NALM insofar as they seek to collect debts from customers of participating institutions do so by virtue of a statutory power and as the statutory successor of banks that were at one time commercial private banks.
62. AIB Bank fell into public hands by virtue of the State guarantee, and, put simply, the exchange of shares as part of the consideration for that guarantee. The fact that the Bank’s shares continue to trade in the market is not definitive with regard to its legal status but it is not a matter of insignificance. AIB is not a body established by statute, and this distinguishes the factors giving rise to the decisions in Beirne v. Commissioner of An Garda Síochána and O’Donnell v. Tipperary (South Riding) County Council which informed the decisions in Dellway v. NAMA, Treasury Holdings v. NAMA and Flynn v. NALM, each of which depended on the fact that the functions and powers were public functions of bodies established to perform those functions.
63. The law relating to judicial review has advanced even in the intervening years since O’Donnell v. Tipperary (South Riding) County Council was decided, but an overriding principle as to the applicability of public law remedies has to be that a body, whether established by statute or otherwise, must perform and be obliged to perform its functions in the public interest, and whether in a given case the decision impugned is one that arises from the exercise of a public power. There are certain classes of functions which might arise within such a body which would be wholly private and not for that reason ones which are obliged to be performed in the public interest.
64. An example of this is found in the case law concerning schools and some discussion was had in the course of the hearing before me that, while the Minister for Education pays the salary of teachers, that fact alone does not make the relationship between the Minister and the teacher one of public law, and it is the tripartite relationship that exists as a result of the Education Act 1998 that creates a public law element, albeit such element is not found in regard to each and every part of the school’s relationship with its staff. Certain bodies which have a public element in their functions, such as schools, operate in general in the public interest as was noted by McGovern J. in Blackrock College v. Browne  IEHC 607 but that fact of itself does not import a public law element in all facets of the operation of the school.
65. I delivered judgment in Conroy v. Board of Management of Gorey Community School  IEHC 103 in which I held that a chaplain in a school could not avail of public law remedies notwithstanding that his salary was paid by the State and that he was employed in a community school. That decision was based on a view that the Minister for Education had no role in the appointment of a chaplain, in the fixing of terms of and conditions for the appointment of a chaplain, or in the assessment of the qualifications and duties of such a chaplain. That judgment distinguished the considered reasoning of O’Malley J in Kelly v. Board of Management of St Joseph’s National School  IEHC 392 where she held that a public law element arose from the interplay between the Minister for Education acting as protector of the public interest and the mandatory statutory disciplinary procedures for teaching staff.
66. A distinction drawn by the ECJ in the case of Foster v British Gas plc (CaseC-188/89)  ECR I-3313 is useful by way of analogy. Mrs. Foster argued that British Gas was part of the British State as board members were appointed by the UK government, and it was required to submit periodic reports to the Secretary of State. The ECJ held that the question of what was a state body would depend on whether the organisation was subject to the authority or control of the state, and whether it provided a public service. The following extract from the judgment is illuminating:-
19 The Court has accordingly held that provisions of a directive could be relied on against tax authorities ( the judgments in Case 8/81 Becker, cited above, and in Case C-221/88 ECSC v Acciaierie e Ferriere Busseni ( in liquidation )  ECR I-495 ), local or regional authorities ( judgment in Case 103/88 Fratelli Costanzo v Comune di Milano  ECR 1839 ), constitutionally independent authorities responsible for the maintenance of public order and safety ( judgment in Case 222/84 Johnston v Chief Constable of the Royal Ulster Constabulary  ECR 1651 ), and public authorities providing public health services ( judgment in Case 152/84 Marshall, cited above ).
20 It follows from the foregoing that a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the State, for providing a public service under the control of the State and has for that purpose special powers beyond those which result from the normal rules applicable in relations between individuals is included in any event among the bodies against which the provisions of a directive capable of having direct effect may be relied upon.”
69. Whilst I accept that certain of the functions of the Bank may now by virtue of the Act of 2010 be deemed to be public functions, I do not accept that the public nature of the duties imposed on the directors of the Bank to have regard to the interest of the taxpayer are such that the Bank exercises or performs a public function in all matters relating to the operation of private bank accounts, and the recovery of commercial and non state loans by it.
70. Accordingly, I am not persuaded by the second defendant’s argument that there is imported into the private contractual banking and day-to-day relationship between the Bank and its customers the principles of public law. I do not say this merely on account of the fact that the contrary proposition could be said to be inconvenient for banking relationships, or indeed that such an argument has not been successfully made in earlier cases, but rather because the Bank is and remains a private commercial entity engaged in the ordinary business of banking, and while the directors in the overall management of the Bank have an obligation to consider the State interests and the interests of the taxpayer that public interest element was imposed upon the directors in their general management of the bank and not in its day-to-day private contractual dealings and does not to my mind penetrate into, or retrospectively inform, the contractual arrangements that the Bank had at the time the Act came into force.
71. Further, the context and recited purposes for which the 2010 obligations on the Bank were imposed are not such in my mind that require the Bank to engage with public law type of propriety in all of its relationships with its customers. Indeed one could say that the various Codes of Conduct issued by the Central Bank, especially the Code issued in 2012 after the Act of 2010 was already in force, impose certain obligations on unregulated entities, and that there would have been no requirement to impose such were they to be implied or imposed as a matter of public law, arising from the Act of 2010.
72. Finally I reject the associated argument advanced by the second defendant that the plaintiff is an “organ of State” for the purposes of the European Convention on Human Rights Act, 2003, such that certain rights would arise in favour of the second defendant against any body so characterised as an organ of State.
73. An organ of State is defined in s. 1 of the Act of 2003 as follows:-
Discussion: the Dellway principles
76. Treasury Holdings v NAMA and the judgment of Cregan J. in Flynn v. NALM were both cases where the lending institution was a creature of statute, and where its functions and powers to enforce repayment of loans were wholly created by statute, and vested in it by s.99 of the Act. In that regard I regard it as important that Finlay Geoghegan J. pointed to the fact that the right to enforce the loans did not “derive solely from contract or the consent or agreement of Treasury”, and said as follows:-
78. Finlay Geoghegan J. took the view that the decision of NAMA to enforce was a decision amenable to judicial review and summarised the relevant authority in the Supreme Court decision of Dellway Investments v. NAMA with regard to the question before her as follows:-
Clearly, as they are adversely affected by the decision to enforce, it follows therefore in the light of the principles set out in Dellway and in Treasury Holdings that they have a right to be heard.”
81. The judgment of Finlay Geoghegan J. in Treasury Holdings v. NAMA as well as the judgment of the Supreme Court in Dellway Investments Ltd. v. NAMA were made in the context of a discretionary power conferred on a body by statute, and that the obligation to exercise its discretionary power in the context of a requirement of fairness arose because of the way by which the body was constituted.
82. I reject the argument that there is implied into the Bank’s contractual arrangement with its clients or customers an obligation akin to the public law obligation that arises in respect of the statutory bodies NALM and NAMA. Those bodies are quite clearly public bodies and have express public law powers which carry public law duties. The Bank is not such and it relies in this case on contractual powers and not on special powers conferred by statute, and the argument by analogy from the line of cases commencing with Dellway Investments Ltd. v. NAMA is not applicable to the service by the Bank on Mr Fingleton of the demand for payment.