1. By
Order of the High Court (Smyth J.) dated the 12th day of May, 1997, the
Applicant was granted liberty to seek relief by way of Judicial Review against
the Respondents including:-
2. The
Applicant, Mr. Simon O'Leary was called to the Irish Bar in 1965 and practised
as a barrister on the Eastern and Dublin Circuits of the Bar for some eight
years before taking senior appointments in the Office of the Attorney General
(in 1973) and subsequently in the Office of the Director of Public Prosecutions
(in 1977).
3. Pursuant
to the provisions of Section 3 of the Law Reform Commission Act, 1975
(hereinafter referred to as the 1975 Act), Mr. O'Leary was appointed a
Commissioner of the Law Reform Commission by the Second named Respondent
(hereinafter referred to as the Government) for a term of 5 years with effect
from the 2nd day of January, 1987 on secondment from his position in the Office
of the D.P.P. and thereafter he was re-appointed for a further term of 5 years
with effect from the 2nd January, 1992 on secondment from the same position.
4. The
First named Respondent (the Minister for Finance) is a member of the Government
and pursuant to the provisions of the Civil Service Regulation Act (No. 46 of
1956) [hereinafter referred to as the 1956 Act] , he is the person who is,
inter alia, responsible for the fixing of (1) the terms and conditions of
service of Civil Servants and (2) the conditions governing the promotion of
Civil Servants and he is empowered for that purpose to make "such arrangements
as he thinks fit and may cancel or vary such arrangements" (see Section 17(2)
of the 1956 Act).
7. Secretary)
would be maintained and preserved upon subsequent reviews and increases of
their respective salaries and the Government never agreed to such terms and the
First named Respondents never entered into any "arrangement" with Mr. O'Leary
that he did not and could not have a legitimate expectation that his salary
would be paid and maintained on such terms and at such rates.
8. In
November of 1986, Mr. O'Leary, who was then Senior Legal Assistant in the
office of the D.P.P. was contacted by the then Attorney General, John Rogers,
S.C. who, acting on behalf of the Government offered to appoint Mr. O'Leary as
a Commissioner of the Law Reform Commission with effect from the 2nd day of
January, 1987.
9. In
response, Mr. O'Leary advised Mr. Rogers that he would accept the appointment
provided that the appointment was deemed to be and seen to be a clear promotion
in the Civil Service from Mr. O'Leary's position as a Senior Legal Assistant in
the office of the D.P.P. and that Mr. O'Leary would be remunerated at the level
of Secretary.
Subsequently,
Mr. Rogers advised Mr. O'Leary that the Government was not agreeable to his
promotion on the terms which he had sought and in consequence Mr. O'Leary
declined the appointment which had been offered to him.
10. In
early December of 1986, Mr. O'Leary was contacted by Mr. James Hamilton, a
Senior Official in the office of the Attorney General who had been instructed
by Mr. Rogers to discuss with Mr. O'Leary the terms upon which he would be
prepared to accept an appointment to the Law Reform Commission.
12. Although
Mr. Hamilton was careful to point out that he was testifying to events which
had occurred more than ten years earlier, his recollection is broadly
consistent with that of Mr. O'Leary in relation to their discussions.
13. The
reduction to writing of the ".... terms upon which the Applicant would be
prepared to accept appointment...." comprises a Memorandum (hereinafter
referred to as the 1986 Memorandum) prepared by Mr. Hamilton and expressly
approved by Mr. O'Leary. It provided as follows:-
14. By
letter dated the 23rd December, 1986 from the then Attorney General the
Government approved Mr. O'Leary's appointment as a full-time member of the Law
Reform Commission with effect from the 2nd January, 1987 as follows:-
15. The
letter confirming Mr. O'Leary's appointment was accompanied by the 1986
Memorandum and by the document which was described in the letter of appointment
as ".... the Department of the Public Service minute of the 18th December,
1986...." (hereinafter referred to as the 1986 Minute) which was headed on
note-paper from the Department of the Public Service and provided as follows:-
16. Mr.
O'Leary duly took up his appointment with effect from the 2nd day of January,
1987 and in 1989 the Review Group recommended that the salary of a Judge of the
High Court should be upgraded from that of a Secretary in the Civil Service and
the recommendations of the Review Group were implemented with effect from the
1st day of July, 1989, from which date no connection existed between the rate
of remuneration paid to the President of the Law Reform Commission and the rate
paid to the Secretary (General Service) in the Civil Service.
17. By
letter dated the 2nd April, 1990, Mr. O'Leary wrote to Mr. Colm Gallagher (the
author of the 1986 Minute) reminding him that ".... it was agreed and recorded
that in the event of a High Court Judge's salary being "upgraded" above as
Secretary, the situation would be reviewed.... I request that I now be paid as
a Secretary and that this should apply retrospectively....".
18. He
spoke to Mr. Gallagher on a number of additional occasions and repeated his
request suggesting that he send further reminders but Mr. Gallagher indicated
that it would not be "politic" to do so but since there was no response, Mr.
O'Leary felt obliged to write again to Mr. Gallagher by letter dated the 20th
February, 1991 calling upon the Government to ".... do the honourable thing and
follow through....." but again he had no response.
19. Mr.
O'Leary was re-appointed as a member of the Law Reform Commission by letter
dated the 9th January, 1992 from the then Attorney General, Mr. Harold A.
Whelehan, S.C. "... for a period expiring on the 1st January, 1997, on the same
terms as applied during your recently expired period as a member of the
Commission".
20. Mr.
O'Leary replied by letter dated the 21st January, 1992 accepting the
appointment and enclosing a copy of the letter which he had sent to Mr.
Gallagher in April 1990 indicating that ".. the letter speaks for itself..."
and pointing out that he had not received a reply despite reminders. He
concluded the letter as follows:-
22. On
the 9th February, 1995, Mr. O'Leary wrote to the then Attorney General, Mr.
Dermot Gleeson, S.C., and repeated what he had stated earlier in his letters to
Mr. Gallagher and to Mr. Whelehan explaining that "... at the outset I must say
that there is not much involved. If there were, I would have been writing to
you and your predecessors every month. I have also written several times to
the Department of Finance without reply. My case appears to be sandwiched
somewhere between the doctrine of doing that which ought to have been done and
the de minimus rule."
23. He
enclosed a copy of the 1986 Memorandum. By letter dated the 22nd May, 1995,
Mr. Gleeson replied enclosing a copy of a letter dated the 18th May, 1995 from
the then Minister for Finance, Mr. Ruairi Quinn, T.D., to Mr. Gleeson in which
Mr. Quinn rejected Mr. O'Leary's contention that he was entitled to a rate of
remuneration equivalent to that of Secretary and stating that he had some
recollection of "... the background to this case" indicating that the "....
approach was... influenced by the fact that the duties of a member of the
Commission, however professionally challenging, did not have the range,
managerial responsibilities or accountability of the Secretary of the even
smallest department."
24. Mr.
O'Leary replied by letter dated the 23rd May, 1995 to Mr. Gleeson in which he
fundamentally disagreed with Mr. Quinn's recollection and contention.
25. Mr.
O'Leary's appointment as Commissioner to the Law Reform Commission expired on
the 1st March, 1997 (he accepted an additional two months appointment to assist
the Commission) and subsequently he had discussions with Mr. Colm Gallagher as
to the terms of his return to the Civil Service and it was indicated to him
that the then Minister for Finance took the view that upon Mr. O'Leary's return
to the office of the D.P.P., his remuneration should revert to the level
appropriate to Deputy Secretary. An alternative proposal was put to Mr.
O'Leary involving work in the office of the Revenue Commissioners. This
proposal contemplated Mr. O'Leary retaining his existing rate of remuneration
which would be frozen at its rate in February of 1997 until such time as the
rate of remuneration applicable to a Deputy Secretary in the Civil Service
".... caught up with" Mr. O'Leary's (frozen) rate of remuneration whereupon Mr.
O'Leary would revert to the rate of remuneration payable to a Deputy Secretary.
This proposal was one of two "options" offered to Mr. O'Leary by letter of Mr.
Colm Gallagher dated the 20th February, 1997 in reply to which Mr. O'Leary on
the 24th February, 1997 wrote to Mr. John Hurley, the then Secretary of the
Personnel and Remuneration Division in the Department of Finance, referring to
the 1986 Memorandum and his understanding of the terms and conditions of his
appointment to the Law Reform Commission and thereafter and indicating that he
had a legitimate expectations arising "... inter alia, from those terms of
agreement, the longevity of my service as a Commissioner and from subsequent
correspondence".
26. He
explained that he had no alternative but to exercise the option of returning to
the office of the D.P.P. but expressly stated that his return was without
prejudice to his claim that he was entitled to be remunerated at the rate
applicable to a Secretary. In his letter Mr. O'Leary indicated that if his
claim (or a compromise) could not be met (or achieved) he would institute
proceedings and he instituted the proceedings herein shortly after receipt of a
letter from Mr. Hurley dated the 28th February, 1997 in which his claim was
rejected.
27. When
Mr. O'Leary resumed his position as Senior Legal Assistant in the office of the
D.P.P. at a salary of £62,732 per annum, the salary then payable to a
Secretary was £78,350 per annum. Mr. O'Leary's rate of remuneration as a
Commissioner of the Law Reform Commission at the date of the termination of his
appointment was £76,507 per annum.
28. Mr.
O'Leary has averred to the presence within the Civil Service of "an established
precedent... that after long service in a position one always held one's salary
on a personal basis".
29. He
went on to instance Ambassadors who had served in "Grade A posts" who retained
their salaries when reverting to "Grade B posts" and he expressly referred to
persons appointed as "Secretary or to a post equivalent to that of Secretary
and who were following the termination of their term as Secretary or in such
equivalent post, if not appointed Secretary to another Department, entitled to
retain the salary payable to them while Secretary or in any such similar post
elsewhere in the Civil Service" and he went on to refer to individual cases.
30. In
an Affidavit sworn on the 8th day of July, 1997, Mr. Colm Gallagher rejected
Mr. O'Leary's contention and referred to the facts that "no such 'established
precedent' even exists or existed as contended for.... I am personally aware,
having worked in the areas of the Civil Service dealing with staffing matters
since 1969 of no such long established precedent. Indeed, I am aware of long
and well-established arrangements to the contrary.... In the case of
Secretaries appointed for seven year terms, specific arrangements which do not
involve automatic retention of salary, and which involve a reduction in the
normal potential length of service form part of the offer of appointment made
to them from the outset".
31. However,
contrary to Mr. Gallagher's averment, it is clear from perusal of a document
marked "secret" dated the 5th March, 1987 and headed "Department of the
Taoiseach" that there was a specific Government decision on the 5th March, 1987
which made special arrangements for Secretaries of Departments who were
appointed for terms of not more than seven years and who had served out their
term of office. In general, those arrangements ensured that such persons were
not disadvantaged financially by reason of having completed their terms of
office.
32. In
addition, Mr. Gallagher averred to "... a long established practice that Civil
Servants seconded to the Public Service.... do not on their return to the Civil
Service retain any additional emoluments which they acquired in the context of
their non-Civil Service appointments" but did not identify any specific cases
and, in dealing with Mr. O'Leary's reference to certain Secretaries of
Departments and certain categories of Ambassador, he stated that these
references were "... inappropriate... since the persons in question remained at
all times holders of posts within the Civil Service".
34. Sub-sections
(12) and (13) of Section 3 of the 1975 are not relevant to these proceedings.
37. It
is of importance to recall that those two documents were prepared subsequent to
and arising out of discussions between Mr. O'Leary and Mr. James Hamilton.
38. It
was an important time in Mr. O'Leary's professional life. He had been offered
a senior position as a Law Reform Commissioner by the Attorney General of the
State and had
refused
that
offer because the Attorney could not meet Mr. O'Leary's requirements that (a)
his appointment was to be treated as a promotion with the Civil Service and (b)
that he would be remunerated at the rate applicable to the position of Secretary.
39. Having
refused that appointment, he was approached a second time on behalf of the
Attorney General by Mr. Hamilton who has testified on Affidavit that "... I was
instructed by the Attorney General.... to discuss with the Applicant the terms
upon which he would be prepared to accept the appointment to the Law Reform
Commission" and that ".... I had clear instructions from the Attorney General
to indicate to the Applicant as I did on a number of occasions that there would
not be agreement to pay to him a salary fixed at that of a Secretary/High Court
Judge. Over a short period of time it proved possible to reduce to writing the
terms upon which the Applicant would be prepared to accept appointment to the
position....".
40. Clearly,
the discussions between Mr. Hamilton and Mr. O'Leary were of greater importance
to Mr. O'Leary than to Mr. Hamilton who has also quite properly and fairly
pointed out in his Affidavit that the matters to which he was referring took
place more than ten years prior to the date of his averments but it is clear
from Mr. Hamilton's testimony on Affidavit that:-
41. Mr.
Hamilton's testimony as outlined above is wholly consistent with the testimony
adduced on Affidavit by Mr. O'Leary and with the 1986 Memorandum.
42. Paragraph
(1) of the 1986 Memorandum provides in the clearest possible terms that Mr.
O'Leary considered that an appropriate salary "... for someone in his
circumstances...." was that of a "Secretary/High Court Judge". The paragraph
was careful however to explain that Mr. O'Leary had been told that "... because
of the desire to maintain a differential between the President (who is a High
Court Judge) and other Commissioners, this is not on offer...".
43. Accordingly,
the
reason
advanced
by the Respondents as to why Mr. O'Leary was not to be paid at the rate
equivalent to that of a "Secretary/High Court Judge" was "...because of the
desire to maintain the differential between the President (who is a High Court
Judge) and other Commissioner...".
44. Mr.
O'Leary and Mr. Hamilton jointly went on to explain in the 1986 Memorandum that
there was also "... a need to maintain the clearest possible differential
between a Commissioner..." (the position to which Mr. O'Leary was to be
"promoted") and "... the Senior Law Research post...." (a position equivalent
to that which Mr. O'Leary was leaving) so that, he was prepared to accept a
salary "....between the two or closer to the Secretary's figure...." and the
Memorandum provides for a differential of £500 between the salary payable
to Mr. O'Leary and that which was then payable to a "...Secretary/High Court
Judge...".
45. Paragraph
(3) of the 1986 memorandum restates the "...need to maintain a differential
between the President and an ordinary Commissioner..." and states that "...in
the event of a High Court Judge's salary being upgraded above Secretary level
the situation would be reviewed...".
46. The
"terms and conditions" of Mr. O'Leary's appointment were declared by the then
Attorney General, Mr. Rogers in his letter of appointment dated 23rd December,
1986 to be those "...as set out..." in the 1986 Minute.
48. For
practical purposes, I am satisfied on the evidence that when Mr. O'Leary took
up his appointment on 1st January, 1987 the (then) Minister for Public Service
and the Government (through the agency of the Attorney General) had agreed with
Mr. O'Leary as follows:-
49. A
critical term agreed between the parties related to Mr. O'Leary's
promotion
within the Civil Service. This term was of such importance to Mr. O'Leary that
he found himself compelled to refuse the offer of the senior appointment made
to him personally by the then Attorney General.
50. When
Mr. Hamilton was instructed by the then Attorney General to discuss with Mr.
O'Leary "...the terms upon which he would be prepared to accept an
appointment..." he found that Mr. O'Leary "...had a very particular request
that his appointment be seen to be a promotion and not a side-ways move...".
This was the first term referred to by Mr. Hamilton in his affidavit and was
clearly a term upon which Mr. O'Leary was insisting. He made it clear and it
was expressly stated within the 1986 Memorandum that he was not prepared to
accept "....a side-ways move.." within the Civil Service. He emphasised that
point in unequivocal terms (a) to Mr. Rogers, (b) to Mr. Hamilton, and (c) to
the Minister for the Public Service (who read and understood the 1986
Memorandum) and his appointment was formally and expressly sanctioned on that
understanding.
51. Since
there is no formal category or grade of Civil Servant between the level of
Deputy-Secretary and Secretary (General Service), Mr. O'Leary's promotion could
only be reflected in his rate of remuneration. This was agreed at a level
which was £500 less than the level appropriate for "Secretary/High Court
Judge" with a provision for "review" dependent upon the recommendations of the
Review Group.
52. It
has been suggested that the Minister's understanding (and possibly that of the
Government) as to what was agreed was different from that of Mr. O'Leary, I do
not accept that such is the case. In his letter to Mr. Gleeson, the (then)
Minister for the Public Service acknowledged that at the time "....Mr. O'Leary
was, as he states, anxious to make some visible gain from his appointment and
the figure of £500 below the then salary of a Departmental Secretary was
settled upon and sanctioned by me....".
53. However,
Mr. O'Leary had gone further than what was suggested by the Minister in that
letter. He expressly required that his appointment would be seen to be a
"promotion" and not a "side-ways" move within the Civil Service and his
appointment was expressly sanctioned on that understanding so that I find it
difficult to accept the contention that in fact Mr. O'Leary's appointment was
not a "promotion" and was in fact a "side-ways move" which was likely to place
Mr. O'Leary at a significant disadvantage in his professional life at a future
date.
54. It
may well be that the then Minister's recollection of the events of December of
1986 was not clear when he wrote to Mr. Gleeson on 18th May, 1995 particularly
since what is stated in paragraph 3 of that letter is quite inconsistent with
the documentary and other evidence adduced at the hearing.
55. As
I indicated earlier the discussions which took place between Mr. Hamilton and
Mr. O'Leary in December of 1986 were of greater importance to Mr. O'Leary than
to Mr. Hamilton for the reasons which I have outlined earlier. This is borne
out by the fact that throughout the following nine years Mr. O'Leary regularly
and consistently wrote to both Respondents referring to the agreement which he
had reached and asking for implementation.
56. He
did not receive a response until 22nd May, 1995 when he was sent a copy of the
letter from the (then) Minister for the Public Service to Mr. Gleeson dated
18th May, 1995. As I have already indicated the Minister was at that time
seeking to recollect events which had occurred nine years previously and at
least some of his recollection may not have been accurate and I have the clear
impression that he cannot be of assistance in relation to the detail which is
of some importance to the determination of the issues in this case. I have,
however, no reservations about Mr. O'Leary's recollection of events having
regard to their importance for him and to the fact that he wrote regularly and
consistently to the Respondents reminding them of what had been agreed.
57. The
First named Respondent is empowered pursuant to Section 17 of the 1956 Act to
fix the terms and conditions of service of Civil Servants and to fix the
conditions governing the promotion of Civil Servants. This statutory power is
exercisable by way of an administrative act appointing Civil Servants who thus
become holders of an office to which they are appointed by a Minister.
58. Although
no evidence was adduced at the hearing to that intent, I am assuming that Mr.
O'Leary was first appointed as a Civil Servant to the office of the Attorney
General in 1973 (and subsequently to the office of the D.P.P. in 1977) by the
First named Respondent in the exercise of his statutory power pursuant to
Section 17 of the 1956 Act. Accordingly in 1986 Mr. O'Leary was the holder of
an office to which he had been appointed by a Minister and the responsibility
for fixing the terms and conditions applicable to his office rested by Statute
upon the First named Respondent.
59. Section
17(2) of the 1956 Act empowers the First named Respondent to "...for the
purposes of subsection (1) of this Section, make such arrangements as he thinks
fit and may cancel or vary such arrangements...".
60. That
subsection has been construed as conferring upon the First named Respondent the
power to enter into contractual arrangements - see
McMahon
-v- The Minister for Finance
,
Kenny J., unreported 13th May, 1963 and
Patrick
Gilheaney -v- The Revenue Commissioners,
Costello J. (as he then was), unreported 4th October, 1995.
61. However,
the First named Respondent is confined by Statute as to the nature and
character of any contract into which he may enter with a serving Civil Servant
whose original appointment was not contractual in nature but was made (as was
Mr. O'Leary's) by the exercise of a statutory power.
62. Since
the purposes of subsection (1) of Section 17 of the 1956 Act include the fixing
of "....the conditions governing the promotion of Civil Servants...." (see
subsection (1)(b)(ii) thereof and since the First named Respondent is empowered
to "...make such arrangements as he thinks fit..." in respect of those purposes
(see Section 17(2) of the 1956 Act) there is no statutory bar upon the entry by
the First named Respondent into contractual relations with serving Civil
Servants whose original appointment has been by the exercise of a statutory
power. Indeed the subsection concerned appears to contemplate such contractual
relations in the form of "arrangements" for the "promotion of Civil Servants".
63. The
nature and extent of such a contract, however, is restricted since the power
conferred upon the First named Respondent to "...cancel or vary such
arrangements.." (which is discretionary) cannot be fettered by contract.
64. The
existence of such a contract will in each case depend upon the evidence as to
whether or not parties intended to contract with one another and in the instant
case will depend upon whether or not evidence has been adduced at the hearing
which establishes that the Respondents and Mr. O'Leary intended to contract
with one another or make an "arrangement", which was intended to have the
effect of "....governing the promotion.." of Mr. O'Leary in his capacity as a
Civil Servant.
65. I
am quite satisfied on the evidence and in particular having regard to (a) the
discussions between Mr. Rogers and Mr. O'Leary, (b) the discussions between Mr.
Hamilton and Mr. O'Leary, (c) the 1986 Memorandum and (d) the 1986 Minute, that
it was the clear intention of the parties to these proceedings to enter into
contractual relations governing Mr. O'Leary's promotion in 1986 and I am
satisfied that they did so.
66. I
am further satisfied that the First named Respondent retained the power vested
in him by Section 17(2) of the 1956 Act to "cancel or vary" the contract into
which he had entered with Mr. O'Leary and I will deal with the appropriate
exercise of that power, in so far as it affects the parties to the contract
under review later in this judgment.
67. In
summary, I am satisfied on the evidence that the Respondents jointly and
severally entered into a contract with Mr. O'Leary and agreed to Mr. O'Leary's
promotion within the Civil Service to a position which was unique within the
Civil Service in that it was to rank significantly above the rank of Deputy
Secretary and slightly below the rank of Secretary (General Service) and was to
be identified by the fact that it would be remunerated at a rate which on 1st
January, 1987 was £500 less than the rate applicable to a Secretary
(General Service) within the Civil Service.
68. I
am satisfied on the evidence that the Respondents agreed to Mr. O'Leary's
promotion and the First named Respondent exercised the powers conferred upon
him by Section 17(2) of the 1956 Act and made an arrangement with Mr. O'Leary
fixing the conditions governing Mr. O'Leary's promotion in order to facilitate
the appointment of Mr. O'Leary as a Commissioner of the Law Reform Commission
by the Government pursuant to the provisions of Section 3 of the 1975 Act and
in accordance with the expressed wishes of the Government at that time.
69. The
determination of issue 3 above requires the consideration of the evidence as to
the events and discussions which occurred in December of 1986 relative to the
appointment of Mr. O'Leary as a Commissioner of the Law Reform Commission which
I have already considered in detail above.
70. The
determination of this issue also requires the consideration of the practice
within the Civil Service and the "legitimate expectations" of certain senior
Civil Servants having regard to the nature, extent and circumstances of their
appointment.
71. In
so far as issue No. 3 is concerned, I have already found that the Respondents
entered into an agreement with Mr. O'Leary in the specific terms which I have
outlined above.
72. It
has been argued on behalf of the Respondents that the so called doctrine of
"legitimate expectation" cannot have any application to Mr. O'Leary's
appointment having regard to the decision of Costello J. (as he then was) in
the case of
Patrick
Gilheaney -v- The Revenue Commissioners
,
unreported 4th October, 1995.
73. In
that case Mr. Gilheaney was Executive Officer in the Office of the Revenue
Commissioners who applied for promotion as Press Officer in the same office
which in turn had the grade of Higher Executive Officer. He was not
immediately successful but was placed on a panel for future promotion but
before that could happen, a decision was taken to fill the vacancy by means of
a transfer of a Higher Executive Officer and not by means of the promotion of
an Executive Officer. He claimed that this decision was invalid because, inter
alia, the decision to make the appointment otherwise than from the panel
established by the Revenue Commissioners breached the legitimate expectation
which he held that that appointment would be made from the panel.
74. In
rejecting his claim, Costello J. referred with approval to the views which he
had himself expressed in the case of
Tara
Properties Limited -v- The Minister for Energy
,
1993 I.L.R.M. 771 stating, inter alia:-
77. Nonetheless
an expectation, albeit heavily conditional, can arise out of the exercise of
such a power provided the benefit conferred is not one which will "later be
refused by the Minister in the public interest".
78. It
is also clear that when a statutory power to confer a benefit is exercised by a
Minister it also confers a corresponding right upon the beneficiary to receive
the benefit and that such a right will be enforced by the Courts "... until
such time as the right is cancelled or varied by the valid exercise of the
power in that behalf contained in Section 17...." (of the 1956 Act); and
79. The
so called "doctrine of legitimate expectation" has been considered and reviewed
in a most helpful fashion by McCracken J. in
Abrahamson
-v- The Law Society of Ireland
(1996) 1 I.R. 409.
81. Although
observing that he found some of the decisions which have influenced the
development of the doctrine of legitimate expectation "....very difficult to
reconcile....", McCracken J. held that the foregoing statement of the law
"...seems to me to accord with fundamental equitable principles...." (see page
418).
82. I
have found that the Respondents jointly and severally entered into a contract
with Mr. O'Leary.
83. I
have also found that the First named Respondent retained the power vested in
him by Section 17(2) of the 1956 Act to "cancel or vary" that contract and I am
further satisfied that the contract comes within the narrow band of contracts
referred to by Costello J. (as he then was) in "
Gilheaney"
as contracts entered into which are made subject to the ministerial power of
variation or cancellation on the basis of an understanding that generally it is
not in the interest of the public service that the statutory power would be
exercised.
84. The
First named Respondent has exercised a statutory power to confer a benefit upon
Mr. O'Leary (by way of an administrative act intended to fix the terms and
conditions relating to Mr. O'Leary's promotion).
85. As
I have already indicated, such an exercise of statutory power conferred upon
Mr. O'Leary a corresponding right to receive that benefit and that right will
be enforced by the Courts "...until such time as the right is cancelled or
varied by the valid exercise of the power in that behalf contained in Section
17..." (see
Gilheaney
at p.28).
86. As
I have already indicated herein a legitimate expectation can arise out of the
exercise of a discretionary statutory power provided that the benefit conferred
is not one which will "later be refused by the Minister in the public interest".
87. Since
I have found that the contract between the First named Respondent and Mr.
O'Leary is one of that category of contract which is entered into on the basis
of an understanding that generally it is not in the interest of the public
service that the statutory power would be exercised and since it also probably
comprised an "arrangement" entered into "...which the parties regard as binding
on them in the interests of the public service and act accordingly..." (see
Gilheaney
at p.28). I do not believe that the First named Respondent can "...in the
public interest" refuse Mr. O'Leary the benefit which he has conferred upon him
and which arises out of the "arrangement" which he has made with Mr. O'Leary
and the contract into which he has entered with him and the statutory power
which he has exercised.
88. Accordingly,
I am satisfied that Mr. O'Leary has a legitimate expectation that he will
receive the benefits of the contract into which he entered with the First named
Respondent and that the latter is estopped from denying Mr. O'Leary the
benefits arising from that contract or "arrangement" (and the exercise of the
statutory power by the First named Respondent).
89. I
make no finding as to whether or not the First named Respondent has in fact
exercised his statutory power to cancel or vary the terms of the benefit which
was conferred upon Mr. O'Leary. If he has not done so, then contractual rights
against the First named Respondent may also be vested in Mr. O'Leary but in my
judgment it matters little because I see no reason why contractual rights
should not co-exist with rights arising out of the doctrine of "legitimate
expectation" or the equitable concept of promissory estoppel.
90. It
follows from my earlier finding that Mr. O'Leary acquired contractual rights
against the Government because I can find nothing within the 1975 Act or
elsewhere restricting the power of the Government to enter into binding
contracts with individuals which may arise from the exercise by the Government
of statutory powers. Whether such contracts are properly enforceable against
the State or the Government which is in power at the date of litigation is a
question which was not raised at the trial and is a matter upon which I am
prepared to hear argument from Counsel if that is necessary.
91. I
express no particular view on the presence or absence within the Civil Service
of "an established precedent...that after long service in a position one always
held one's salary on a personal basis".
92. Since
I have identified Mr. O'Leary's legitimate expectation arising out of his
relationship with the Respondents it is unnecessary for me to determine issue
No.(3)(c) above.
93. In
so far as issue No.(4) is concerned I think it is of significance that in his
Order dated 12th May, 1997, Smyth J. gave Mr. O'Leary "...leave to apply by way
of Application for Judicial Review for the reliefs set out at paragraph
D(1-10)....in the Statement..." grounding his application. He declined to give
Mr. O'Leary liberty to seek the reliefs sought at paragraph 11 and 12 in the
same Statement, that is to say, "damages" and "interest pursuant to Statute"
and I respectfully agree with his decision.
94. I
have found herein that the Respondents jointly and severally entered into a
contract with Mr. O'Leary and that he has a legitimate expectation that he will
receive the benefits arising out of that contract.
95. It
is not my function in the proceedings herein to determine (a) whether or not
there have been breaches of that contract by either of the parties or (b) any
questions relating to the rights of either party to recover damages from the
other arising out of such alleged breaches. Issue No.(4) involves the
determination of such a question and I do not believe that it is appropriate
for me to do so.
96. In
summary then, I am satisfied that Mr. O'Leary is entitled to declaratory relief
against the Respondents and I will make the appropriate Order after discussion
with Counsel on behalf of both parties.