Supreme Court of Ireland Decisions

1. This is the decision of the Supreme Court on the reference to it by the President of Part V of the Planning and Development Bill 1999 (hereafter “the Bill” ) pronounced pursuant to Article 26, s. 2, sub-s. 1 of the Constitution.

2. By order given under her hand and seal on the 30th June 2000 President Mary McAleese after consultation with the Council of State, referred, in pursuance of the provisions of Article 26 of the Constitution, Part V of the Bill to the Supreme Court for a decision on the question as to whether the said Part [*2] V or any provision or provisions thereof is or are repugnant to the Constitution or to any provision thereof.

3. Counsel were assigned by the court to present arguments on the question referred to the court by the President. Prior to the oral hearing, counsel assigned by the court presented written submissions to the court, including submissions that certain provisions of Part V of the Bill were repugnant to the Constitution. Submissions in writing by and on behalf of the Attorney General were presented to the court, including submissions that none of the provisions of Part V were repugnant to the Constitution.

4. The oral hearing then took place before the court on the 24th and 25th July. During the course of the hearing, the court heard oral submissions by counsel assigned by the court and by the Attorney General and counsel appearing with him.

5. Before the detailed provisions of Part V are referred to, it might be helpful to summarise what appear to be the main features of the statutory scheme which it purports to establish. [*3]

6. It is clear that the purpose of the statutory scheme is to facilitate the purchase of houses by people who would otherwise not be in a position to buy houses and to ensure, so far as possible, that housing developments of this nature are not isolated from the general community.

7. This is sought to be achieved through the planning mechanism. Each planning authority is to include in its development plan a “housing strategy” . It is envisaged that this will provide for the designation within the area of a planning authority of a specified percentage of the lands zoned for residential use for the provision of what is called “affordable housing” and also for the provision of housing for persons coming within certain defined categories, such as, for example, the homeless, travellers and people living in unfit or overcrowded accommodation.

8. Where the owner of land zoned for residential uses, or a mixture of residential and other uses, applies for permission for a housing development on the land, the planning authority, or An Bord Pleanála, as a condition of granting the permission may require him to enter into an agreement under which he either cedes up to 20% of the land comprising the development for such purposes or provides serviced sites or houses actually built for such purposes. [*4]

9. The price for such land to be paid by the planning authority is to be calculated by reference to its existing use value, i.e. on the assumption that no development other than exempted development would be allowed on the land. In the case of land purchased before the publication of the Bill, the landowner will be entitled to be paid the sum he actually paid for the land, if it is higher than the existing use value. There are also provisions for the payment of interest. In the case of land acquired by inheritance or gift before the publication of the Bill, he will be entitled to its value as of the date of the death or the gift, if that is higher than the existing use value.

10. Developments consisting of the provision of four or fewer houses or for housing on land of 0.2 hectares or less are not affected by these provisions. There are also provisions enabling the planning authority to “claw back” a percentage of the profits made by persons to whom such housing is allocated in the event of a resale.

11. The long title of the Bill describes it as

12. Part V of the Bill is headed

13. Section 94 of the Bill deals with what are described in Part V as “Housing Strategies” . It requires every planning authority to include in the development plan it is required to make under s. 12 of the Act

14. A housing strategy must take into account the existing and likely future need for housing of the following categories of person (hereafter “the special categories” ):

15. The housing strategy must also take into account the existing and likely future need for what is described as “affordable housing” . That is defined by s. 93 (1) as houses or land made available for “eligible persons” . They, in turn, are defined as follows:

16. Section 94(3) provides that the housing strategy must also take into account

17. A housing strategy must include an estimate of the amount of housing for the persons in the special categories and affordable housing required in the area of the development plan during the period of the development plan. The estimate may state different requirements for different areas within the area of the development plan. The planning authority may exclude eligible persons who have previously owned a house.

18. The housing strategy must provide that as a general policy a specified percentage, not being more than 20% of the land zoned for residential use, or for a mixture of residential and other uses, shall be reserved for the provision of housing for the special categories or for affordable housing. However, this is not to prevent any person (including a local authority) from using more than [*9] 20% of such land for residential use, or for a mixture of residential and other uses, for the provision of housing for such purposes.

19. In making the estimate of the amount required for affordable housing, the planning authority must have regard to the following matters set out in s. 94 (5)(a)

20. Section 95 contains provisions requiring the planning authority to ensure that sufficient suitable land is zoned for residential use, or for a mixture of residential and other uses, to meet the requirements of the housing strategy, and to ensure that a scarcity of such land does not occur at any time during the period of the development plan. It also provides that, in order to counteract what is described as “undue segregation in housing between persons of different social backgrounds”, the planning authority may indicate in respect of any particular area that is zoned for residential use, or a mixture of residential and other uses, that there is no requirement for housing for the special categories or for affordable housing or that a lower percentage than that specified in the housing strategy may be required instead.

21. Section 96 provides that, where a development plan objective requires that a specified percentage of any land zoned solely for residential use, or for a mixture of residential and other uses, is to be made available for housing for the special categories or for affordable housing, the remaining provisions of the section are to apply to an application for permission for the development of [*11] houses, or where an application relates to a mixture of development, that part of the application which relates to the development of houses. This is to be in addition to the provisions of s. 34 of the Bill which sets out the powers and duties of the planning authority in relation to the granting or refusal of permission for the development of land and the conditions which may be attached to such permissions. Since the submissions of counsel assigned by the court as to the possible invalidity of Part V of the Bill were principally, although not exclusively, related to this section, it is set out in full in the Appendix to this judgment.

22. The effect of s. 96 can be summarised as follows. Where a person applies for permission for the development of houses or a mixture of developments, including housing, on land which is zoned for residential use, or a mixture of residential and other uses, and the planning authority have included an objective in the development plan requiring a specified percentage of it to be made available for housing for the specified categories or affordable housing, the planning authority, or An Bord Pleanála, may require as a condition of a grant of permission that the applicant enter into an agreement of a specified nature with the planning authority. [*12]

23. The agreement in question may take one of three forms. First, it may provide for the transfer to the planning authority of the ownership of the land required by the agreement to be reserved for the provision of housing for the specified categories or affordable housing. Secondly, it may provide for the building of a specified number of houses of a particular description and their transfer to the planning authority or persons nominated by the planning authority at a price to be determined in accordance with the provisions of the section. Thirdly, it may provide for the transfer of a specified number of fully or partially serviced sites to the planning authority, or persons nominated by the planning authority, at a price to be determined in accordance with the provisions of the agreement.

24. The applicant cannot be required to enter into an agreement to transfer houses or sites. He may opt instead to transfer land and, it is only where he decides not to transfer land, that he can be required to enter into an agreement to transfer houses or sites.

25. The price of houses and sites to be transferred under the agreement is to be determined on the basis of the site cost of the houses being calculated as if it was equal to the cost of land transferred to the authority under the first [*13] procedure and the building and attributable development costs, as agreed between the authority and the developer, including profit on the cost.

26. For the purposes of such an agreement, the planning authority must have regard to

27. The applicant must, when making an application to which s. 96 applies, specify the manner in which he or she would propose to comply with the condition requiring an agreement to be entered into were the planning authority to attach such condition. Where the authority grants the permission to the applicant subject to such condition, it must have regard to the proposals he has made.

28. Similar provisions apply where the land was purchased before 25th August 1999 by the applicant pursuant to an enforceable agreement entered into before that date or an exercise of an option in writing granted or acquired before that date. There are also similar provisions where the applicant is a mortgagee in possession of land purchased before the 25th August 1999.

29. In the case of any other land - i.e. land acquired after the 25th August 1999 - the applicant is to be entitled only to its existing use value calculated on the basis already indicated.

30. Where because of the size, shape or “other attributes of the site” , the planning authority, or An Bord Pleanála on appeal, considers that an agreement under these provisions is not practical, the planning authority or An Bord Pleanála may as a condition of a grant of permission require the payment of the planning authority of an amount equivalent in value to a transfer of the land to the authority under those provisions. Any amount paid under this provision is to be accounted for in a separate account and may only be applied by a planning authority as capital for its functions under Part V or by the housing authority for its functions in relation to the provision of housing under the Housing Acts 1966 to 1998.

31. Any other disputes in relation to any matter which may be the subject of an agreement under these provisions may be referred by the planning authority or any other prospective party to the agreement to An Bord Pleanála for determination. Where it is a condition of the granting of permission that such an agreement is to be entered into and, because of a dispute in respect of any matter relating to the agreement, it is not entered into before the expiration of eight weeks from the date of the grant of permission, the applicant or any other person with an interest in the land which the application relates may refer the dispute to An Bord Pleanála or a property arbitrator, whichever is appropriate.

32. Pending such provision, the planning authority is required to maintain the land or sites in a manner which does not detract, and is not likely to detract, to a material degree from the amenity, character or appearance of land or houses in the neighbourhood of the land or sites.

33. Where a planning authority becomes satisfied that land, site or a house transferred to it under these provisions is no longer required for the purposes mentioned in the last paragraph, it may use the land, site or house for another purpose connected with its functions or sell it for the best price reasonably obtainable. In either case, it must pay an amount equal to the market value of [*18] the land, site or house or the proceeds of sale into the separate account to which reference has already been made.

34. These provisions are not to apply to applications for permission for development consisting of the provision of houses by a body approved for the purposes of s. 6 of the Housing (Miscellaneous Provisions) Act 1992 for the provision of housing for persons in the specified categories where such houses are to be made available for letting only. Nor is it to apply to the conversion of an existing building or the reconstruction of a building to create one or more dwellings, provided that 50 per cent or more of the existing external fabric of the building is retained. It is also not to apply to the carrying out of works to an existing house.

35. The section provides that a permission granted under Part IV of the Local Government (Planning and Development) Act 1963 (proposed to be repealed and replaced by the Bill) or under the corresponding provisions of the Bill pursuant to an application made after the 25th August 1999, and to which Part V would have applied if the application for permission had been made after the inclusion of a housing strategy in the development plan, is to cease to have effect on the 31st December 2002 or on the expiry of a period of two years from the date of the grant of permission which ever is the later. This will [*19] apply to the entire development, where the development to which the permission relates is not commenced by that date or the expiry of that period. Where the development has commenced by that date or before the expiry of the period, it is to apply to any portion of the development consisting of buildings the external walls of which have not been completed. This latter provision is stated to be without prejudice to the obligation on the person carrying out the development to fulfil the other requirements of the permission in relation to so much of the development as is not affected by these provisions.

36. Section 97 provides that the section just dealt with (s.96) is not to apply to development

37. A planning authority cannot grant a certificate where the applicant, or any person with whom he is acting in concert

38. Where the planning authority refuses to grant a certificate, it must inform the applicant by notice in writing of its reasons for so refusing. The applicant is then entitled, not later than three weeks from the date of the notification of refusal, to appeal to the Circuit Court for an order directing the planning authority to grant the applicant the certificate. (The time for appealing may be extended by the court). The court may either dismiss the appeal and affirm the refusal of the planning authority or allow the appeal and direct the planning authority to grant the applicant a certificate and, if the latter course is adopted, the planning authority must comply with the direction.

39. There are also provisions enabling the planning authority to revoke a certificate on an application to that effect by the owner of the land or a person acting with his permission, but may not do so where permission has been granted in respect of the development.

40. Section 98 provides for the allocation of affordable housing. Under its provisions, a planning authority must establish a scheme which determines the order of priority to be accorded to eligible persons. Without prejudice to the generality of these provisions, the planning authority in establishing such a scheme are to have regard to the following:-

41. The planning authority may review a scheme made under the section and make amendments to it or a new scheme and must carry out such a review, when making or reviewing a development plan under Part II of the Bill.

42. Section 99 enables the planning authority to impose controls on the resale of houses or sites provided or made available by them under these provisions. The sale or lease of the houses or sites are to be subject to such conditions as may be specified by the planning authority and, without prejudice to the generality of that provision, they may provide for

43. Where the amount payable to the planning authority under these provisions would reduce the proceeds of the sale (disregarding solicitors’ and estate agents’ fees and costs) below the price actually paid, the amount payable shall be reduced to the extent necessary to avoid that result. Thus, in the example given, if the house were resold for £90,000, the amount payable out of the proceeds of sale would be £15,000 and not £25,000.

44. In calculating the amount payable to the planning authority under these provisions, due allowance is to be made for any “material improvements” [*25] made by the person to whom the house or land is sold. That does not include decoration or any improvements carried out on the land, including the construction of a house. In default of agreement, the amount is to be fixed under the arbitration procedures to which reference has already been made.

45. Monies accruing to a planning authority from such a resale are to be paid into the separate account to which reference has already been made and are to be subject to the requirements in relation to that account already mentioned.

46. Section 100 provides for the making of regulations by the Minister

47. Section 100 (2) provides that regulations made under subsection (1) may apply either generally or by reference to a specified class or classes of eligible persons or to any other matter as may be considered by the Minister for the Environment to be appropriate.

48. Section 101 provides that, where a planning authority performing any function under Part V is not the housing authority for the area for the function, it is to consult with the housing authority for the area with respect to the performance of that function.

49. Counsel assigned by the court submitted that certain provisions of Part V of the Bill were repugnant to the Constitution as being in violation of Article 40.3.2 and Article 43 protecting the property rights of the citizen and/or Article 40.1 guaranteeing the equality before the law of all citizens as human persons.

50. Counsel submitted that, in reaching a conclusion as to whether Part V of the Bill violated any of these provisions of the Constitution, it was important to bear in mind a number of features of the legislation.

51. First, it was said that the definition of “eligible persons” was in somewhat general terms. A person whose income was not adequate, because of the specified criteria, to meet mortgage repayments for the purpose of the accommodation he required, was not as a result automatically qualified as an eligible person. The planning authority were also entitled to take into account “any other financial circumstances of the eligible person” and this, it was urged, gave the planning authority a huge measure of discretion over a matter that was ultimately fundamental in determining the amount of land which had to be transferred to the planning authority. Planning authorities might apply these provisions in a significantly different manner, thus leading to an unevenness throughout the country as to the determination of eligibility, which in turn was to be a major determinant of the amount of land which had to be transferred on an application for permission. It was said that this was particularly striking when one bore in mind that the percentage relationship [*28] between mortgage payments and income was fixed in a uniform way throughout the country. It was also said that the imprecise definition of “accommodation needs” could result in applicants for development being required to contribute to housing for people who are better off than they were. That was not satisfactorily met by s. 100(1)(a) enabling the Minister to make regulations specifying the criteria for determining the size of accommodation required by eligible persons.

52. Secondly, it was submitted that the fact that it was left to the planning authority to determine the percentage of land - subject to the maximum of twenty per cent - to be transferred to the planning authority for the purposes of social and affordable housing would lead to unjust and anomalous consequences. Clearly, the requirements for such housing in different areas of the country would differ for a variety of socio-economic factors, including the fact that the State in the past may have benefited some areas more than others and that some local authorities had been less effective in meeting their obligations to provide such housing under the Housing Acts. Thus, the specified percentage to which an applicant for planning permission in a particular area will be subject would be determined, not by his ability to contribute to the social need, but by the neglect of housing authorities in the past of their duties for which he was not certainly not responsible. It was [*29] notable, in this context, that the planning authority, in determining what the specified percentage should be and how much land should be transferred in any particular instance to them was not obliged to have any regard whatever to the financial circumstances of individual applicants for permission.

53. Thirdly, it was submitted that the singling out of applicants for permission for housing development for adverse treatment in order to increase the supply of social and affordable housing was wholly unjustifiable for a number of reasons. Those who simply retained a land bank without making any attempt to develop it were not affected. Neither were applicants for commercial development. Neither were those who made substantial profits from the increase in house prices, such as builders, builders’ suppliers and financial institutions. One possible consequence would be that commercial development would be encouraged at the expense of the housing development which it was the policy of the legislation to stimulate.

54. Fourthly, it was submitted that the method by which compensation was to be assessed for land compulsorily transferred to the planning authority was in many respects arbitrary and unfair. A person who had inherited land twenty years ago would be forced to accept either its value as of that date or its existing use value. In most cases, either valuation would be far below that of [*30] land which had been acquired in the years immediately preceding the publication of the legislation. No rational basis could be put forward for such a differentiation. Similarly, those who had bought land many years before the publication of the legislation and who had very good reasons for not developing the land - e.g. because they wished to use it for farming - were heavily penalised in comparison with those who bought the land at a time closer to the relevant date.

55. Fifthly, it was submitted that these difficulties were compounded by the absence of any payment for improvements carried out to the land by the applicant and of any compensation for injurious affection to the remaining land.

56. It was submitted that, while it was undoubtedly important and indeed essential for the executive and the legislature to do everything within their power to remedy the serious socio-economic problems resulting from the high level of house prices now prevailing, it should not be done by requiring one section of the population - owners legitimately wishing to develop their land -to bear a disproportionate share of alleviating the social ills in question. The transfer of the burden seemed to be based on the premise that such landowners were reaping a benefit from the increase in the value of their land brought about [*31] by rezoning decisions and that it was reasonable to require them to accept some reduction in those profits for the benefit of the community as a whole. That approach, however, it was said, had insufficient regard to the other factors which had contributed to the present high cost of housing. It was accepted that the steep acceleration in the cost of houses over the past decade not merely made it difficult for persons in the special categories to obtain housing accommodation, but also put such accommodation beyond the reach of persons with low or even moderate incomes. But this was the result, it was urged, of a number of factors for which landowners were not in any way responsible: the failure of central government and local authorities to provide affordable housing and the necessary infrastructure, the fact that wages had not kept pace with the increase in house prices and the constraints imposed on such wage increases by successive agreements between governments and various interest groups. The inadequate supply of housing which, it was acknowledged, was probably the most important feature in contributing to the present difficulties was a matter for society as a whole and not one somewhat arbitrarily selected group, to remedy.

57. While it was accepted that Part V, in common with the rest of the Bill, was entitled to the presumption of constitutionality, it was submitted that it [*32] violated the guarantees as to private property and equality before the law contained in the relevant articles of the Constitution.

58. It was accepted by counsel assigned by the court that, in considering the Bill, the court ought to apply the principle laid down in a number of decisions of the court to the effect that, where it was claimed that a Bill is repugnant to the Constitution, such repugnancy must be clearly established. It was further conceded that the objective of Part V, i.e. to provide housing for persons who either would have difficulty in obtaining housing or would be unable to obtain housing if left to rely on their own resources, was in the interests of the common good. It was submitted that the first issue which the court had to address was whether the relevant provisions providing for the compulsory transfer of land, sites or houses to the local authority constituted an unjust attack on property rights, having regard to the measure of compensation provided for affected landowners. The second issue was whether the relevant provisions were vitiated by invidious discrimination to an extent which rendered them repugnant to the Constitution. The third issue was whether the relevant provisions delegating to the local authority and/or the Minister for the Environment important critical decisions in regard to the compulsory transfer provisions constituted an unauthorised delegation of legislative power contrary to Article 15.2 of the Constitution.

59. In considering those questions, the fact that the compensation to which the applicant for permission would be entitled in respect of the land which he was obliged to cede to the planning authority was not based on the market value of the land was of critical importance. While it had been held in Dreher .V. Irish Land Commission (1984) ILRM 904 that the absence of a provision for the payment of compensation based on the market value of the property being taken did not, of itself, mean that the legislation was unconstitutional, that decision was one of a series of decisions arising from the operations of the Irish Land Commission from which no general principle could safely be extracted. In contrast, it was submitted, that the absence of compensation had been found to be fatal to the constitutionality of the relevant legislation in Blake .v. The Attorney General (1982) IR 117. Similarly, the decision of the court in In re Article 26 and the Employment Equality Bill 1996 (1997) 2 IR 321 [*34] demonstrated that, while the purpose of legislation might be laudable and intended to serve the common good, it would be found to be unconstitutional if it sought to transfer the burden of achieving that objective to a particular section of the community in an unfair and discriminatory manner.

60. It was further urged that where this was done without compensation - or, as in this case, compensation which fell significantly below the actual value of the property taken - and without regard to the financial capacity and needs of those being benefited and those adversely affected, it constituted an unjust attack on the property rights of the latter and could not be justified by reference to Article 43. In support of this proposition, counsel relied on the decision of the court in Blake .v. The Attorney General (1982) 2 IR 117. In the present case, it was said that the remarkably wide ranging category of “eligible persons” and the complete absence of any reference to the financial circumstances of the affected landowners made the reasoning of the latter decision peculiarly applicable. Moreover, where a statutory scheme of this nature affecting property rights operated in an inconsistent manner throughout the country, by reason of that fact it also constituted an unjust attack on property rights, as had been held by the court in Brennan .v. The Attorney General (1994) ILRM 355.

61. It was further submitted that the statutory scheme violated the guarantee of equality before the law. While it was accepted that, as had been held in Quinn’s Supermarket Limited .v. Attorney General (1972) IR 1, the guarantee was not absolute in its nature, the somewhat narrow construction of Article 40.1 which had been adopted in that case, i.e. that the qualifying words “as human persons” indicated that the inequality proscribed by the article was one based on matters such as race, gender, religion or political opinions, had not found favour in later decisions of the court such as McKenna .v. An Taoiseach [*36] (No.2) (1995) IR 10 and Howard .v. The Commissioner of Public Works (1994) 1 IR 101. It was submitted that inequalities which unfairly or arbitrarily restricted a person’s property rights or means of earning livelihood or which made a person unfairly bear a disproportionate share of a burden which should be assumed by society as a whole were prohibited by Article 40.1. In the present case, the legislation unfairly and invidiously discriminated between landowners who proposed to develop their land for housing and persons who do not intend to develop their land. The latter category may simply be retaining the land as a long term investment without developing it and thereby be conferring no benefit on society. Where that person’s land is compulsorily acquired for housing by a local authority under the Housing Acts, he will have a right to compensation at market value. The person who desires to develop land and make housing available effectively pays a substantial penalty.

62. Counsel also relied on the different treatment for particular categories of person in the assessment of compensation to which reference has already been made as constituting further invidious discrimination. Similar considerations applied to the failure to have any regard to the relative financial circumstances of the developer and the persons entitled to affordable housing and the different treatment of persons applying for housing development and commercial development.

63. It was submitted that the constitutional frailty of s. 93(3) was not cured by the power given to the Minister under s. 100(1) to make regulations, since that power was confined to regulations

64. The significance of the wide-ranging powers thus vested in planning authority, counsel said, was that the list of eligible persons entitled to affordable housing could become so large that the entire of the twenty percent reserved for housing for the special categories or affordable housing could be required in the case of every housing development, although that was plainly not what was envisaged in the other provisions under Part V.

65. These defects in Part V, counsel submitted. could have been avoided by more precise statutory definitions of eligible persons which did not leave so large an area of discretion to planning authorities.

66. It was pointed out that the first objective had formed part of the policy of successive governments since the foundation of the State and that the failure to meet the second objective had given rise to grave social problems in recent decades and that, in the case of the second objecction, it had also been the policy of successive Governments for a considerable period to bring it about.

67. It was submitted that, to the extent that the submissions of counsel assigned by the court were based on the premiss that the present difficulties being experienced in the provision of affordable housing were the result of inaction by central government or local authorities, it was ill-founded. They said that the amount spent on what could be broadly described as “social housing” had been increasing in every year for the past four years and that it was proposed to expend sums in the order of six billion pounds on such housing over the next six years.

68. It was submitted that the Bill, including Part V, enjoyed the presumption of constitutionality. The court should not decide that Part V of the Bill or any part thereof was repugnant to the Constitution unless that repugnancy had been clearly established.

69. It was submitted that, in approaching that question, it was essential to bear in mind that the Bill, in providing for the payment of compensation at a level which would admittedly be lower than the market value of the relevant portion of the land as it would normally be determined on a compulsorily acquisition, was doing no more than requiring the landowner, if he wished to develop the land, to surrender some part of the enhanced value of his property which had resulted from the operation of a planning regime intended for the benefit of the community as a whole. Thus, the impugned provisions operated only where a person applied for permission to develop the land and related at most to twenty percent of the land. Even in relation to that portion, there was no question of the applicant not being compensated: instead, he was [*42] compensated at a level which left out of account some of the enhanced value of the land resulting from its being zoned for residential use. The submissions of counsel assigned by the court amounted in effect to an argument that, in the case of every interference with property rights, even where mandated by the common good, the acquiring authority should be required to compensate the owner at the level of market value. That was wrong in principle and contrary to the jurisprudence of this court as reflected in Dreher .v. Irish Land Commission and O'Callaghan .v. The Commissioners of Public Works . The provisions in the present case were clearly intended to ensure that those who, quite legitimately, wished to realise the potential of their land, should be required to contribute a relatively modest proportion of the enhanced value resulting from planning decisions, including the rezoning of the land to the attainment of an important social objective. That was not only a permissible restriction on the exercise of private property rights, but was also reasonably proportionate to the end sought to be achieved, and hence could not be said to constitute an unjust attack on property rights.

70. They further submitted that, having regard to the decisions of the High Court in Murtagh Properties .v. Cleary (1972) IR 330, Nova Media Services .v. Minister for Posts and Telegraphs (1984) ILRM 161 and Attorney General .v. Paperlink Limited (1984) ILRM 373, the court was entitled to have regard to the Directive Principles of Social Policy set out in Article 45 and, in particular, the requirement that

71. As to the submission that these provisions also violated the constitutional guarantee of equality before the law, it was submitted this was not, and could never have been intended to be, an absolute guarantee of equality in all circumstances. Even if it could be said that the construction adopted of Article 40.1 in Quinn's Supermarket Ltd. .v. The Attorney General was somewhat narrow, it would be extending the application of the guarantee far beyond what [*45] was envisaged to hold that the distinctions necessarily drawn by Part V of the Bill between different categories of landowners offended the guarantee of equality before the law.

72. As to the argument based on what was claimed to be the unequal treatment afforded to landowners on the one hand and eligible persons on the other hand, it was submitted that the Oireachtas had arrived at a fair and reasonable balance between the competing interests involved. Clear legislative guidelines had been given as to the basis on which persons could be classified as eligible persons and, far from ignoring the circumstances of individual landowners, care had been taken to exclude entirely from the ambit of the Bill relatively small scale development.

73. As to the submission that the degree of discretion afforded to the planning authorities violated Article 15.2 of the Constitution as being an impermissible form of delegated legislation, it was said that this was wholly unsupported by the decisions of this court and the High Court. In City View Press Ltd. and Anor. .v. An Comhairle Oiliúna and Others (1980) IR 381, the empowering legislation had not indicated what factors were to be taken into account by AnCo in imposing particular levies on employers and it was held by McMahon J. in the High Court that this did not offend the provisions of [*46] Article 15.1. His decision to that effect had not been appealed to this court. By contrast, in Laurentiu .v. Minister for Justice (2000) 1 ILRM 1, this court had found the power given to the Minister for Justice to make orders in respect of aliens so wide ranging as to constitute an impermissible abdication by the Oireachtas of its legislative role. That could not conceivably be said to the position in the present case.

74. It was held by the former Supreme Court in Re Offences against the State (Amendment) Bill, (1940) IR 470 that a Bill referred to the court by the President pursuant to Article 26 enjoys the same presumption of constitutionality as an act of the Oireachtas. No argument has been advanced to the court in this case that that view of the law, which was reaffirmed in other references before the former court and this court, was in any way erroneous. It follows, that what has sometimes been called the “double construction” rule applies and that, if in respect of any provision or provisions of Part V of the Bill two or more constructions are reasonably open, one of which is constitutional and the other is unconstitutional, it must be presumed that the Oireachtas intended only the constitutional construction: see McDonald .v. Bord na gCon (No. 2) , (1965) IR 217. It also follows that, in accordance with the decision of the court in East Donegal Co-operative Ltd. .v. Attorney [*47] General (1970) IR 317 it is to be presumed that the Oireachtas intended that any proceedings, procedures, discretions or adjudications permitted, provided for or prescribed by Part V of the Bill would be conducted in accordance with the principles of constitutional justice and that any departure from those principles would be restrained or corrected by the courts.

75. Article 43 of the Constitution under the heading “Private Property ” provides that

76. The decided cases demonstrate that the interpretation of these Articles and, in particular, the analysis of the relationship between Article 40.2 and Article 43 have not been free from difficulty.

77. At a comparatively early stage in the history of the Constitution, the former Supreme Court in Buckley and Others .v. Attorney General (1950) IR 67 emphatically rejected the proposition that the effect of Article 43 was merely to prevent the total abolition of private property in the State. It was also made clear that the courts were entitled to determine whether, in any particular case, a restriction of rights of private property was required by the exigencies of the common good. The finding by the court in a later case, Attorney General .v. Southern Industrial Trust (1960) 94 ILTR 161 that the delimitation of private property rights and the assessment of what the common good required [*49] were “matters primarily for the consideration of the Oireachtas” has been recognised in subsequent authorities as being in conflict with the statement of the law in Buckley and Others .v. The Attorney General and the former decision has not been followed: see Central Dublin Development Association .v. Attorney General (1975) 109 ILTR 69 and Blake .v. Attorney General (1982) IR 117.

78. In the latter case, which concerned a challenge to the constitutionality of the Rent Restrictions Act 1960, O’Higgins C.J. speaking for this court, drew the following distinction between the effects of Articles 43 and 40:-

79. In that case, the court held that the legislation in question could not be regarded as regulating or delimiting the property rights comprehended by Article 43 and that, accordingly, its validity fell to be determined solely by reference to the provisions of Article 40.3.2. The sole question to be determined was whether the impugned provisions of the Act constituted an unjust attack on the property rights of the plaintiffs.

80. It is clear, particularly when the later decisions of the court are examined, that this approach cannot now be adopted without at least some reservations. It is no doubt the case that the individual citizen who challenges the constitutional validity of legislation which purports to delimit or regulate the property rights [*51] undertakes the burden of establishing that the legislation in question constitutes an unjust attack on those rights within the meaning of Article 40. It is also possible to envisage an extreme case in which the Oireachtas by some form of attainder legislation purported to confiscate the property of an individual citizen without any social justification whatever. In such a case, no enquiry would be called for as to whether the legislation also conformed to the requirements of Article 43. The challenge typically arises, however, as it has done here, in circumstances where the State contend that the legislation is required by the exigencies of the common good. In such cases, it is inevitable that there will be an enquiry as to whether, objectively viewed, it could be regarded as so required and as to whether the restrictions or delimitations effected of the property rights of individual citizens (including the plaintiff in cases other than references under Article 26) are reasonably proportionate to the ends sought to be achieved.

81. That the provisions of Article 43 are relevant to the enquiry undertaken by the courts where they are considering a challenge to the constitutionality of legislation on the ground that it constitutes an unjust attack on the property rights of the citizen within the meaning of Article 40 was made clear in the subsequent decision of this court in Dreher .v. Irish Land Commission (1984) ILRM 94 which it will be necessary to consider at a later point.

82. It can scarcely be disputed that it was within the competence of the Oireachtas to decide that the achievement of these objectives would be socially just and required by the common good. It is accepted on behalf of the State that the use of planning legislation, which has traditionally been concerned with the orderly and beneficial planning and development of the physical environment, for a purely social objective of this nature is novel and even radical The court is satisfied, however, that it is an objective which it was entirely within the competence of the Oireachtas to decide to attain, as best it could, by the use of planning machinery. The essential question for resolution, in the context of Article 40 and Article 43 , is whether the means employed constitute an unjust attack on property rights.

83. The approach which, in general, should be taken by the courts in considering whether a constitutional right has been validly abridged were stated as follows by Costello J., as he then was, in Heaney v. Ireland (1994) 3 IR 593 in a passage subsequently approved by this court:-

84. In considering the application of these principles to Part V of the Bill, it is important to bear in mind that, where the property of the citizen is compulsorily acquired by the State or one of its agencies for what are deemed by the legislature to be important social objectives, it has in general been recognised that he or she is entitled to at least the market value of the property so taken as constituting fair compensation for the invasion of his property rights. However, that this generally recognised right, although unquestionably of importance, is not absolute was made clear in two decisions of this court.

85. It was pointed out in that case that there was a statutory requirement that the land bonds should be issued at a rate which kept them as near as could be to par value during the period of the issue. As already noted, during the currency of the period when they could have been realised by the plaintiff, they actually stood at one stage above par. The case, accordingly, should be regarded as one which was essentially decided on its special facts, as Henchy J. made clear in a brief concurring judgment.

86. The plaintiff, in O'Callaghan .v. The Commissioners of Public Works in Ireland and Another , had bought land at Loughshinny on the coast of County [*58] Dublin which included a 38½ acre site occupied by a prehistoric promontory fort. This had been listed for preservation under the relevant legislation, which also prohibited the owner from interfering with the site without giving prior notice to the Commissioners of Public Works. Soon after acquiring the land, the plaintiff, who was aware that the land contained an ancient monument, employed contractors to plough a part of the area occupied by the fort. The Commissioners then made a preservation order which prevented the plaintiff from carrying out the ploughing operations on the lands in question. The legislation contained no provision for the payment of compensation in respect of such an order and the plaintiff instituted proceedings claiming that this was an unjust attack on the property rights of citizens within the meaning of Article 40.3.2.

87. In the judgment of the court upholding the High Court decision refusing the plaintiff’s claim, O'Higgins C.J. said that:-

88. Again, while the court held in that case that the absence of any provision for compensation did not invalidate the imposition by statute of the restriction in question, the fact that the plaintiff was aware of the existence of such a restriction at the time that he acquired the land seems to have played at least some part in the ultimate result.

89. There can be no doubt that a person who is compulsorily deprived of his or her property in the interests of the common good should normally be fully compensated at a level equivalent to at least the market value of the acquired property. As Walsh J. in Dreher pointed out, even that may not be a sufficient measure of compensation in some cases: hence the additional elements of compensation payable in compulsory acquisitions of land effected under the Land Clauses Consolidation Act as determined under the Assessment of Land [*60] (Acquisition Of Compensation) Act 1919 as subsequently amended, by virtue of which the landowner is to be compensated, not merely for the market value of his land, but also for such additional elements of damage to him as disturbance, injurious affection and severance.

90. There are, however, special considerations applicable in the case of restrictions on the use of land imposed under planning legislation, such as those now under consideration. Under the Local Government (Planning and Development) Act, 1963 proposed to be repealed and re-enacted with many modifications by the Bill, where the value of an interest of any person existing in land to which a planning decision related was reduced, the person was entitled to be paid by way of compensation the amount of such reduction of value and, in the case of the occupier of the land, the damage (if any) to his trade, business or profession carried on on the land. This prima facie entitlement to compensation was, however, severely curtailed in a number of respects and the validity of these provisions in constitutional terms was considered in detail by Kenny J. in Central Dublin Development Association .v. Attorney General . He rejected the contention that such limitations constituted an arbitrary confiscation of such rights: he said that a provision, in particular circumstances envisaged by the legislation, that an interference with one of the rights of property was not to be the subject matter of compensation was not a [*61] breach of Article 43 and did not fail to defend and vindicate the personal rights of property. He also concluded that it was not an unjust attack upon such rights.

91. Planning legislation of the nature now under consideration is of general application and has been a feature of our law ever since the enactment of the Town and Regional Planning Act, 1934, although it did not take its modern, comprehensive form until the enactment of the 1963 Act Every person who acquires or inherits land takes it subject to any restrictions which the general law of planning imposes on the use of the property in the public interest. Inevitably, the fact that permission for a particular type of development may not be available for the land will, in certain circumstances, depreciate the value in the open market of that land. Conversely, where the person obtains a permission for a particular development the value of the land in the open market may be enhanced. As Finlay C.J. observed in Pine Valley Developments and Others .v. The Minister for the Environment and the Attorney General (1987) IR 23:-

92. However, it may be noted that in United States .v. Fuller and Another (409 US) 488, it was held that where the Government had “condemned” - i.e. sought to acquire compulsorily - certain lands, the assessment of compensation could legitimately be made on the basis that an element of the value of the land arising from the availability of grazing permits in respect of other land need not be taken into account. Rehnquist C.J. speaking for the court said:

93. In the present case, as a condition of obtaining a planning permission for the development of lands for residential purposes, the owner may be required to cede some part of the enhanced value of the land deriving both from its zoning for residential purposes and the grant of permission in order to meet what is considered by the Oireachtas to be a desirable social objective, namely the provision of affordable housing and housing for persons in the special categories and of integrated housing. Applying the tests proposed by Costello J. in Heaney .v. Ireland and subsequently endorsed by this court, the court in the case of the present Bill is satisfied that the scheme passes those [*64] tests. They are rationally connected to an objective of sufficient importance to warrant interference with a constitutionally protected right and, given the serious social problems which they are designed to meet, they undoubtedly relate to concerns which, in a free and democratic society, should be regarded as pressing and substantial. At the same time, the court is satisfied that they impair those rights as little as possible and their effects on those rights are proportionate to the objectives sought to be attained.

94. Nor in the view of the court could the scheme be regarded as arbitrary, unfair or based on irrational considerations. It was reasonable to differentiate between those persons who bought their land after the Bill had been published and those who had bought before and to afford somewhat more generous treatment to the latter category. The court is further satisfied that it was not unfair or arbitrary to distinguish between those who acquired land by purchase before August 1999 and those who acquired it by inheritance before that date. It is true that the latter category are not to be entitled to interest, but there is undoubtedly a distinction in principle between their position and that of those who purchased property: it was not unreasonable to treat the latter as being entitled to interest in respect of the purchase money paid by them, whether in the form of mortgage interest or otherwise, depending on the circumstances of the particular purchase. At the same time, the impact of the statutory scheme is [*65] limited so that those carrying out developments consisting of the provision of four or fewer houses or housing on land of 0.2 hectares or less can obtain certificates relieving them from the provisions of section 96. In addition, as already noted, there are elaborate provisions enabling the planning authority to “claw back” profits effected on the resale of houses built in pursuance of the statutory scheme.

95. Support for the view that the statutory scheme set out in Part V of the Bill does not constitute an impermissible violation of private property rights is to be found in the decision of the European Court of Human Rights in James .v. United Kingdom (1986) 8 EHRR 123. In that case the trustees of the Westminster Estate in London had been deprived of the ownership of a number of properties forming part of the estate through the exercise by tenants of those properties of rights of acquisition conferred by the relevant English legislation. They complained inter alia that the compulsory transfer of these properties and the calculation of the price received for the transfer amounted to a breach of Article 1 of Protocol No. 1 of the European Convention on Human Rights and Fundamental Freedoms which reads:

96. One of the grounds of challenge was that the Act deprived the applicants of their property at a price “always below, and often far below the market value.”

97. Having found that the stated social objectives of the legislation in question came within what is described in the jurisprudence of that court as the “margin of appreciation” of the contracting State, the court went on to find as follows:-

98. In these circumstances, it is not necessary to express any opinion on the submission advanced by the Attorney General that the court , in deciding this Reference, should have regard to the Directive Principles of Social Policy set out in Article 45 of the Constitution. The court notes that, in the High Court judgments where account was taken of the Directive Principles, no question appears to have arisen of their application in the making of laws by the Oireachtas. The question as to whether those High Court decisions were correctly decided and, if so, whether they should be followed in a case such as the present must await resolution in another case.

99. Article 40.1 provides that:-

100. Speaking for the majority of this court in Quinn’s Supermarket .v. Attorney General , Walsh J. said of this Article:-

101. The arguments advanced by counsel assigned by the court under this heading necessarily overlapped to a considerable extent with those advanced by them in relation to the private property articles. The court has already rejected the argument that the legislation unfairly and invidiously discriminates between landowners who propose to develop their land for housing and persons who do not intend to develop their land. It has also rejected arguments based on the different treatment for particular categories of person in the assessment of compensation.

102. It was also urged that the general scheme of Part V discriminated invidiously and unfairly between the affected landowners and the persons benefiting from the scheme and that the result was to require some people to bear a disproportionate share of what should be the responsibility of society as a whole.

103. It should be pointed out that, in reaching that conclusion, the court has had regard to the observation by Kenny J. in Ryan .v. Attorney General (1965) IR 283 that the presumption that every Act of the Oireachtas is constitutional until the contrary is clearly established applies with particular force to legislation dealing with controversial social and economic matters. It is [*72] peculiarly the province of the Oireachtas to seek to reconcile in this area the conflicting rights of different sections of society and that clearly places a heavy onus on those who assert that the manner in which they have sought to reconcile those conflicting rights is in breach of the guarantee of equality.

104. The court is satisfied that it has not been established that Part V of the Bill is repugnant to Article 40 of the Constitution.

105. Article 15.2 of the Constitution provides that:-

106. To the same effect is the decision of this court in Laurentiu .v. Minister for Justice .

107. In the present case, it is undoubtedly envisaged in the statutory scheme that some matters are to be determined either by planning authorities in relation to their particular areas or by the Minister for the Environment.

108. As already noted, counsel assigned by the court submitted that the requirement in s. 93(3) that a planning authority, in determining the eligibility of a person for the purposes of Part V, should take into account “any other financial circumstances” of the eligible person and persons who might reasonably be expected to reside with them had left a huge area of discretion to the planning authority which violated the provisions of Article 15. 1.

109. The court is satisfied that it has not been established that the provisions of Part V of the Bill are repugnant having regard to Article 15.1 of the Constitution.

110. The decision of the court is, for the reasons stated, that none of the provisions of Part V of the Bill are repugnant to the Constitution.

111. The President will be so informed.