Supreme Court of Ireland Decisions

1. Cases concerning the disappointment of legitimate expectations have formed part of the regular diet of the courts in judicial review matters since at least the decision of the Supreme Court in Webb v Ireland [1988] IR 353. (" Webb") The law has not been comprehensively reviewed in this Court, though some remarks about it are to be found in the recent judgments in Glencar v Mayo County Council (unreported judgment of 19th July 2001), where essentially it was decided on the facts that no recognisable legitimate expectation had been established.

2. Similarly, in the present case, the applicant, as the holder of a sea fishery licence, failed in his application for judicial review of a decision by the first named respondent ("the

3. Minister"), to refuse him the right to use the tonnage of his vessel on de-registration as replacement capacity so as to facilitate the entry of another vessel into the fishing fleet. The learned trial judge, O’Sullivan J, held that the applicant did not satisfy the threshold requirement of being able to point to a legitimate, in the sense of a reasonably entertained, expectation that he would receive this benefit at the hands of the Minister.

4. Before recounting the relevant facts, I will advert to the few comparatively simple surrounding legal provisions, which are fully set out in the judgment of O’Sullivan J.

5. Sea fishing is governed by the Fisheries Acts and registration of boats is governed by the Merchant Shipping Acts.

6. The Minister is empowered to license boats, registered under the Merchant Shipping Acts, for sea fishing, by 222B of the Fisheries (Consolidation) Act, 1959 inserted by section 2 of the Fisheries (Amendment) Act, 1983. The Minister may allow or refuse an application for a license and may impose terms and conditions on licenses he grants. He may also make regulations exempting classes of boats from licensing. However, it was (at the relevant time) an offence, unless exempt, to use an unlicensed sea-fishing boat for sea-fishing.

7. The applicant’s boat, the "Angela Madeleine" , being under 65' in length, was exempt from licensing pursuant to the Licensing of Sea-fishing Boats (Exemption) Regulation of 17 ^th August 1983 (SI No 245 of 1983). This regulation was revoked by the Licensing of Sea-fishing Boats (Exemption) (Revocation) Regulations 1994 (SI No 444 1994) with effect from 1 ^st January 1995 to comply with EC Regulation Council Regulation 3690/93. I will return to this issue at a later stage.

8. Despite this exemption, the applicant had to license his boat. In order for Bord Iascaigh Mhara (BIM) to be able to register a mortgage to secure their loan made to the applicant on the boat, the boat had to be registered. Section 8 of the Fisheries (Amendment) Act, 1983 required that, to be registered, a boat had to have a sea-fishing license.

9. The applicant is a fisherman and mussel farmer and owner of a 35 foot sea-fishing boat, the “Angela Madeleine.” He works from Kilmakillogue Harbour, Lauragh, Killarney. He had his boat built in 1991 by Dingle Boats Teoranta, with the benefit of a loan and grant from BIM as well as a grant from European Community funds (FEOGA).

10. For an appreciation of the applicant’s complaint it is necessary to explain the policy background to the Minister’s refusal. It is an amalgam of national and European Community policies. It is notorious that Community fish stocks are under more or less constant threat from over-fishing. Community policies include fish quotas and, what is relevant to this case, the reduction of fishing capacity. The long term objective is to achieve a balance between fishing effect and available stocks. Commission Decision 88/142/EEC of 11 December 1987 (modified on 23 December 1988) required Ireland to significantly reduce its fishing fleet in stages up to 1991. Fleet tonnage was to be cut from 58,845 tonnes to 43,941 tonnes (a 25% reduction). In August 1989, the Minister set up a review committee to examine licensing policy and to recommend measures for the control of the fleet in line with the State’s obligations.

11. As it happens, the applicant made his first application for a license under section 222B, quoted above, on 13 ^th March 1990. The vessel was not specified as it had not yet been built, but under the heading, “Methods of Fishing” , he stated : “mussel farming by long line system & potting.” Under “species in order of priority,” he filled in: “mussels, crab, lobster

12. In May 1990, upon consideration of the report of the committee, the Minister adopted a 100% replacement policy in respect of new entrants to the fleet. In order to license a new vessel, a tonnage equivalent to that of the new vessel would have to be withdrawn from the register. In practical terms, an applicant seeking a new sea fishing boat license would have to acquire vessels or capacity which are entered on the sea fishing boat register of capacity at least equivalent to that of the proposed new vessel. However, in view of Community regulations,aquaculture vessels and vessels engaged exclusively in bivalve fishing were exempt from this requirement.

13. To the extent that the applicant’s application included crabs and lobster, he would have been required to show replacement of equivalent tonnage. On 6 ^th June 1990, the Minister wrote to the applicant stating that “preference would be given to applicants who have proposed tonnage replacement” and that “applicants will have to demonstrate that they intend to remove a significant level of active tonnage from the Fishing Boat Register to facilitate the entry of new entrants.” The letter went on to ask “ whether there [was] a replacement element associated with his application” and asked the applicant to furnish details. The applicant replied on 25 ^th June 1990, furnishing an amount of detail. His letter contains the following:

14. The Minister replied on 26 ^th April to the effect that he was prepared, in principle, to offer a license but specified a number of conditions, particularly, that which read: “the tonnage in question is to be used for aquaculture purposes only and you will not be allowed dispose of the tonnage for general purposes.” O’Sullivan J. explains that the terms “mariculture” and “aquaculture” are interchangeable: they relate to mussel fishing and fishing for “bi-valve molluscs ” (clams, scallops, razor clams), a sector also denoted by the word “specific.” The applicant was informed also that he had to send written acceptance of the offer within four weeks and that if it was not taken up any further request for a license would be considered as a new application and subject to whatever policy criteria might then be in force. The applicant wrote in reply on 1 ^st May 1991:

15. The applicant was informed by the Department of the Marine of his port number and letters, which must be displayed. At the end of May, the boat was launched and he commenced to fish even before the license was issued .

16. The license duly issued. It is dated 28 ^th August, and operated only for the period from 26 ^th August to 30 ^th November 1991. This was because the sole purpose of the license was to enable the boat to be registered for the reasons already given. It contained no condition of the sort that had been notified regarding use of the boat for aquaculture nor, indeed any condition concerning the type of fishing which was permitted, or replacement tonnage.

17. The applicant claimed that the absence from the license of any such condition meant that the conditional offer of 26 ^th April, restricting fishing to aquaculture, had lapsed prior to the issue of the license.

18. At first, the applicant fished for crab and lobster, with pots, and fished for mussels only in the winter. He continued fishing with pots from 1991 to 1993, selling the catch to processing factories and French buyers. He did not commence fishing for demersal species of white fish (cod, haddock, hake and whiting) until 1994. However, the applicant says that the Department of the Marine include fishing with pots in the demersal sector. What is more, the officers of the Department made no complaint about the type of fishing he was engaged in and issued him with books in which to record his catch. As already noted, he would have had to show replacement tonnage if he had persisted in his application to fish for crab, lobster and shrimp.

19. Clearly, the third paragraph, by including the demersal sector to any extent in the categorisation, and the fourth paragraph, by allowing the applicant’s vessel to be used for replacement capacity purposes, was directly at odds with the letter of 26 ^th April 1991. Despite the last paragraph, no further letter was, in fact, sent and the applicant says he assumed that the position expressed in the letter of 1 ^st October stood. He continued to fish as he had done and expended monies on his vessel.

20. Early in 1997, the applicant commenced to experience financial difficulties. He was under pressure inter alia from BIM. He decided to sell his tonnage through the agency of a solicitor, Patrick Crowley, who advertises for tonnage in “The Skipper” newspaper. A side effect of the licensing policy combined with the ministerial policy of replacement was that a trade had developed in licensed “tonnage,” which, as noted by the learned trial judge had “become a valuable commodity in itself.” An agreement for sale of the applicant’s tonnage was made in March 1997, subject to the Minister’s approval, which was expected to take about three weeks to obtain. Meantime the agreed consideration was transferred to the account of Mr Crowley, solicitor, who was handling the transaction to await the approval. At first, the Minister was favourable to the request and the proceeds of sale were even transferred on or about 27 ^th March 1997 into the applicant’s bank account after discharge of the amounts due to BIM. On 4 ^th April, the Minister wrote stating that “the Department’s letter of 26 April 1991 to the owner (Mr Daly) indicated that the tonnage could not be disposed of for general fishery purposes.” The Department of the Marine explained it’s position more fully in a letter to the applicant on 10 ^th June 1997. It read:

21. Thus the transaction was frustrated at the last moment.

22. The above account of the facts does not do full justice to the evidence cited by the applicant to support his legitimate expectations case. It will be easier and less repetitious to do so when I come to assess the strength of that contention.

23. The full hearing of the applicant’s judicial review application took place before O’Sullivan J. over a period of five days. The affidavits were supplemented by oral evidence. O’Sullivan J. gave judgment on 25 ^th February 1999 dismissing the application. He excluded from consideration the fact that the Minister stated that the letter of 1 ^st October 1993 was written in error. That fact did not mean that it could not form “part of the transaction or course of dealing between the parties to which the Court will have regard in the context of legitimate expectations.”

24. O’Sullivan J. held that it was not reasonable for the applicant, on receipt of the license, to conclude that the Minister had changed his requirement in relation to tonnage. His fishing activities in apparent breach of the 1991 undertakings had more to do with that activity itself than with the Minister’s tonnage replacement requirements. They were also “equally consistent with lack of communication between the various representatives of the Minister, some confusion and perhaps even a relaxed attitude.”

25. The applicant, in his appeal to this Court, relies both on the doctrine of legitimate expectations and the equitable doctrine of promissory estoppel. He takes issue with the judgment of O’Sullivan J in several respects:

26. The Minister responds by saying that the concept of legitimate expectations requires the existence of a clear unambiguous and unqualified promise. There is no such promise in the present case. Furthermore, the legitimate expectation must be reasonable in the sense of being objectively justifiable. In the present case, the applicant had obtained his license in which he was aware of the necessity to extinguish tonnage and of the restriction on the use of his vessel to that end. The learned trial judge was right to emphasis the relevance of equitable principles. Finally, the applicant’s attempt to obtain the substantive remedy of the right to use his tonnage for replacement exceeds what is available for breach of legitimate expectations, which confers procedural rights only.

27. The learned trial judge decided the case essentially on the facts. The applicant did not, he held, have an expectation which it was reasonable or legitimate for him to have. The very name of the doctrine demonstrates, in my view, that this approach is correct. If authority were need for this self- evident proposition, it is to be found in express terms in the judgments of this Court in Wiley v The Revenue Commissioners [1994] 2 I.R., 160. Blayney J in the High Court and both Finlay C.J. and McCarthy J accepted that the plaintiff, a disabled person, expected, as a fact, that he would be granted a refund of excise tax on a new motor car under a scheme designed to benefit disabled drivers. He had received a refund on previous occasions, but the Minister altered the terms of the scheme so as to require medical evidence that the applicant possesses the disability described in the scheme. He did not, however, in the view of the Court, have an expectation which was legitimate.

28. The Minister relied upon the following passage from the judgment of Barr J. in Cannon v Minister for the Marine [1991] 1 I.R. 82, which seems to me to distil the essence of

29. The policy of replacement tonnage was, in substance, an administrative scheme. The State was required to comply with Community policy by reducing total fishery tonnage by targeted amounts. On the other hand, there was no directly applicable Community regulation. The achievement of the objective was left to Ireland, which had to act within the general parameters of Community policy.

30. The licensing of sea-fishing boats was and is a statutory scheme. Fishing without a license was rendered unlawful, but the Minister had full discretion to grant or refuse a license. He was entitled, in the exercise of this statutory discretion, to adopt a policy relevant to the attainment of a balance between the available fish stocks and fishing capacity in the form of boats, and to alter that policy from time to time. The replacement tonnage policy was designed to ensure that additional fishing capacity would not be added to the fleet: a new license would be granted only upon it being shown to the satisfaction of the Minister that equivalent existing capacity would be eliminated. Aquaculture or mussel fishing was, as we have seen, outside the scope of this policy. In Murphy v Minister for the Marine and others [1997] 1 I.L.R.M., 523, Shanley J. fully considered the replacement-tonnage policy and held that the Minister was fully entitled to have regard to it in exercising his discretion to grant or refuse sea-fishing licenses. No challenge to the correctness of that decision has been advanced in this case. It should be said, however, that nothing in Community law obliged the Minister to treat individual applicants for licenses by reference to the tonnage replacement policy. In other words, if the applicant had a genuine basis for legitimate expectations nothing in Community law or, for that matter, in the statutory regime would prevent him succeeding.

31. The applicant frankly accepts that, at all relevant times before mid 1991, with only a minor qualification, he put himself forward as being interested only in aquaculture. The qualification is that he said initially in 1990 that he would want to pot for lobster and crab in the summer months. However, when he was informed that he would have to show that he was replacing existing tonnage, he abandoned this and confined his application in express terms to aquaculture. I do not accept that the applicant, in so doing, was under duress. He acted voluntarily. From this exchange, it was abundantly clear that the Minister had adopted a new policy of insisting on tonnage replacement upon the grant of a new license. Not only was the applicant not replacing tonnage, because of the confinement of his application, but, more importantly, he accepted expressly and in writing that his own tonnage could not, in the future, be used as replacement tonnage.

32. However, it is said that the applicant, because of the small size of his boat, was exempt from the licensing requirements, and that the Minister acted ultra vires by seeking to impose the requirements in the letter of 26 ^th May 1991. In my view, this does not alter the

33. The central plank of the applicant’s case is not, as he has accepted at all times, the letter of 1 ^st October 1993, but his claim that everything changed in August 1991, when as he put it, “it all unravelled.” Firstly, the license, when issued did not repeat the conditions contained in the letter, restricting him to aquaculture and denying him the right to use his tonnage for replacement. At the same time, he was informed, apparently by BIM that the Minister could not restrict his fishing. Furthermore, he was issued with logbooks to enable him to record his catches. This was done although he would not in fact be required to make returns, but he was told that it would be useful to keep records for his own benefit. He did, in fact, fish for what he calls demersal species even before the issue of the licence. In that respect, I have noted that, prior to 1994, his fishing other than mussel fishing, consisted of fishing for lobster and shrimp. These are not normally classed as demersal, though they are so treated by the Department of the Marine for tonnage replacement. The applicant also received the benefit of a scheme of assistance for loss of lobster pots. He says this further confirmed his understanding that he was allowed to fish in the demersal sector.

34. I can find no basis in fact, whatever the quality of promise required to justify a legitimate expectation, in the so called unravelling events, formed on any objective or reasonable basis, that the Minister had departed from what he had consistently stated, and that he was, on the contrary, now implicitly promising that he would allow the applicant to use his tonnage for replacement. The silence of the license on the topic was perfectly consistent with the view that the Minister had no power to restrict the applicant’s fishing, since he was exempt from licensing. Nor can the applicant rely on his fishing, in fact, for demersal species or the apparent tolerance of this fact by officers of the Department of the Marine. This fishing was perfectly lawful. Insofar as the applicant was told by officials of BIM that the Minister could not impose conditions on his license, this was also consistent with this fact. In evaluating the reasonableness of an expectation, it will usually be easier to establish that an authority has bound itself when its actions are consistent with and imply the continued effectiveness of a position already communicated. Promise by implication is no doubt conceivable, but is not easy to establish where it flies in the face of the authority’s stated position.

35. On the face of it, the letter of 1 ^st October 1993, furnishes a much more robust material for a legitimate expectation by the applicant. However, that, strangely, is not the applicant’s case. So far as he was concerned, that letter changed nothing. It merely confirmed his existing understanding. I would be reluctant to hold this point against the applicant without careful consideration. After all, if the letter had formed part of the relationship between the parties from 1991, it would have been difficult for the Minister to justify any departure from it. The letter, though expressed in provisional terms, is very explicit in its fourth paragraph in admitting the use of the applicant’s vessel for replacement tonnage purposes “for the introduction of a new or second-hand vessel into the Demersal (other than the Irish Sea) category on a one to one basis.” Viewed objectively, on the other hand, the applicant’s case lacks internal logic. Any expectation he had prior to receipt of that letter, which contains an explicit recognition of the essentials of his claim, could not be considered legitimate. He, however, attaches little or no importance to the letter, claiming that it represented the Minister’s position as he already (incorrectly, in my view) understood it to be.

36. Furthermore, the applicant accepted in evidence without demur that he had done nothing on foot of the letter to alter his position to his detriment. Counsel for the applicant argued strenuously in response to questions from the Court that the doctrine of legitimate expectations contains no requirement that the claimant show that he has so acted: that is relevant only to the alternative claim based on promissory estoppel. I will comment on that proposition later in this judgment. At this point, I think the answer to the dilemma of the unfortunate and obviously confusing terms of the letter of 1 ^st October lies elsewhere. The terms of the

37. Returning to the applicant’s acceptance that he had not acted to his detriment on foot of the letter of 1 ^st October 1993, I would accept that there is a distinction between the doctrine of legitimate expectations and promissory estoppel. Legitimate expectations constitutes an accepted part of the principles of administrative law applied by our courts through the vehicle of Judicial Review. It is concerned essentially to see that administrative powers are not used unfairly. An expectation may be legitimate and cognisable by the courts even in the absence of the sort of action to the claimant’s detriment that forms part of the law of estoppel. On the other hand, I would not accept that the mere fact of an expectation can suffice without some context relevant to fairness in the exercise of legal or administrative powers. Those who come within the ambit of an administrative or regulatory regime may be able to establish that it would be unfair, discriminatory or unjust to permit the body exercising a power to change a policy or a set of existing rules, or depart from an undertaking or promise without taking account of the legitimate expectations created by them. However, the very notion of fairness has within it an idea that there is an existing relationship which it would be unfair to alter. The existing relationship between the applicant and the Minister was that created in 1991. The letter of 1 ^st October 1993 did not tend to alter that to the disadvantage of the applicant. On the contrary, it constituted a gratuitous or fortuitous and uncovenanted benefit. This is not the sort of interest that the doctrine is designed to protect.

38. One further point is the change from 1 ^st January 1995 in the licensing rules. From that date, the applicant was no longer exempt. He said in evidence that he was unaware of this change. It emerged in evidence that the Department of the Marine, at least in their internal

39. Finally, the applicant claims that the Minister has not, in fact, operated a consistent 100% tonnage replacement policy. A number of exceptions have been identified. I do not find it necessary to review these cases in detail. They amount to a series of individual cases where the Minister considered that an exception could be made or were not subject to the policy. In general terms, they were either boats that had already entered the fleet or been approved for FEOGA grants prior to the adoption of the new replacement tonnage policy in 1991. The applicant did not qualify for any of the exceptions. I think that is enough to dispose of that argument. This case is not concerned to review the Minister’s operation of the licensing regime or the tonnage replacement policy generally. It is concerned with the applicant’s claim that he as the owner of a sea fishing boat had a legitimate expectation to be treated in a particular way. In my view the learned High Court judge was correct in deciding that he had not established that case.

40. The applicant relied at the hearing of the appeal also on the doctrine of promissory estoppel, though without citing any of the relevant authorities other than the well-known passage

41. Mr Gerard Hogan, Senior Counsel contended that this was either an exceptionally generous application of promissory estoppel or a new doctrine of promissory estoppel. In either event he contended that he did not have to point to any act of reliance on the promise which formed the basis of his case. It is not unfair tocharacterise that as a daring submission, striking, as it does, at the root of the concept of equitable estoppel. The passage cited was clearly not intended to convey that the doctrine of legitimate expectation is coextensive with promissory estoppel. It clearly is not. The learned Chief Justice, in the passage in question cited, as authority, a judgment ofDenning M.R. which proceeded precisely from the fact that the parties had “conducted the dealings between them..” on foot of an underlying assumption. It is the fact that it would be unconscionable for one party to be permitted to depart from a position, statement or representation, upon which the other party has acted to his detriment, that justifies the courts in intervening to restrain him from doing so. If the recipient of a promise or representation, is to be dispensed from any obligation to demonstrate reliance, the doctrine would be more than exceptionally generous. It would be a virtually ungovernable new force affecting potentially not only equity but the laws of contract and property and, as here, the exercise of administrative powers.

42. This Court explained the doctrine of promissory estoppel very clearly in Doran v Thompson [1978] I.R. 222, where Griffin J said (at page 230):

43. Kenny J, at page 233, cited as being correct the statement of the law on promissory estoppel at page 563 of the 27th edition (1973) of Snell's Principles of Equity which reads:—

44. Turning to the facts of the present case, I think the letter of 1 ^st October 1993 is well capable of qualifying as the type of unambiguous promise or assurance contemplated by the doctrine of promissory estoppel. It told the applicant simply and directly that his vessel would be acceptable for replacement purposes. The applicant does not, however, satisfy the second requirement. The facts to which I have referred in rejecting his claim based on legitimate expectations apply with greater force in the present context.

45. The applicant frankly accepted at all stages that he had not acted on foot of this letter. He did not change his position in any material way. It was not inequitable, therefore, for the Minister to withdraw the offer contained in that letter to treat the applicant as being part of the demersal sector and entitled to use his tonnage for replacement.

46. I would accordingly dismiss the appeal.