THE SUPREME COURT
[379/13, 382/13]
[COA 955/2014]
[HC 2012/790 JR]
Clarke C.J., MacMenamin J. Peart J. SEOSAMH MacDONNCHA AND KATIE SWEENEY
Applicants/Respondents
-and-
THE MINISTER FOR EDUCATION AND SKILLS, IRELAND AND THE ATTORNEY GENERAL
Respondents/Appellants
JUDGMENT of Mr. Justice MacMenamin delivered on the 18th day of October, 2018
Introduction
1. This is an appeal brought by the Minister for Education and Skills, Ireland, and the Attorney General, against a judgment and order delivered on the 29th May, 2013 in the High Court (Hogan J.) [2013] IEHC 226. For ease of reference, Mr. MacDonncha (now unfortunately, deceased) and Dr. Sweeney will be referred to as the "applicants", as they were in this judicial review proceeding. At the outset of the appeal, the Court drew attention to the fact that no application had been made to reconstitute these proceedings in the name of Mr. MacDonncha's legal personal representative or an administrator to his estate. The Court determined that Dr. Sweeney's case should nonetheless proceed, and that the challenge brought by the late Mr. MacDonncha could be later reconstituted, either in accordance with any matters as finally determined by this Court, or upon remittal to the High Court. The High Court judge concluded that, in terminating certain allowances previously payable to the applicants, the Minister had acted ultra vires s.15(6) of the Vocational Education Committee (Amendment) Act, 2001 ("the 2001 Act"). The Minister now contends this conclusion was arrived at erroneously and in breach of fair procedures.
2. The first named applicant in the High Court judicial review, the late Mr. MacDonncha, was appointed as CEO of County Galway Vocational Education Committee ("VEC") on the 16th January, 2006. Dr. Sweeney, the second named applicant, was appointed CEO of County Mayo VEC on the 1st September, 2006. Both were well regarded statutory officers whose offices and entitlements were governed by the Vocational Education Acts 1930-2001.
3. In the midst of the economic crisis, a government decision was made to re-organise the vocational education sector and to reduce 33 VECs to 16 new Educational Training Boards ("ETBs"). This reform had a potential impact on the remuneration and status of both applicants. At the time of this litigation, the Education and Training Board Bill was proceeding through the Oireachtas. That legislation forms a backdrop to this case. The effect of the Education and Training Boards Act, 2013 ("the 2013 Act") was to bring about a repeal of the Vocational Educational Acts 1930-2001, with the exception of s.36 of the 2001 Act, and various statutory instruments made under the previous legislation.
4. This case commenced with the grant of leave to seek judicial review on the 18th September, 2012. The applicants' challenge to the Minister's proposed actions prior to, and in the course of this rationalisation process, and in enacting this legislation, was based on three main questions, set out later. The Bill was signed by the President and became law on the 8th May, 2013, the last day of the High Court hearing in these proceedings.
The 2012 Circular
5. With this forthcoming rationalisation in mind, the Minister promulgated Circular No. 24/2012 ("the 2012 Circular") on the 19th June, 2012. This set out the categorisation of the new ETBs " for the purposes of the pay scales applicable to CEOs of these Boards ". The new ETB for the City of Galway, County Galway and County Roscommon fell into what was described as "Category II", as did the new ETB for County Mayo, County Sligo and County Leitrim. Paragraph 3 of the Circular stated that the categorisation would "apply from the commencement date of the legislation bringing into force the new Education and Training Boards ".
Transport Liaison Officers' Allowance
6. The High Court judgment outlines a particular form of allowance which had previously been paid to CEOs. This was the Transport Liaison Officers Allowances ("TLOA"). The amount of this allowance varied annually and differed somewhat between distinct VEC areas. In the years immediately prior to the litigation, the annual average TLOA was slightly more than €12,000 in the case of Mr. MacDonncha, and between €11,000 and €12,000 in the case of Dr. Sweeney. The original rationale for this allowance was in recognition of the extra administrative burdens which, at one stage, were placed on the CEOs, as a result of the operation of the school transport system. The rationale for this payment disappeared over time. The work was performed by other persons. It was a significant part of the applicants' remuneration package nonetheless.
7. Prior to the legislation, and following a review of the TLOA, the Department of Finance recommended that the payment should cease for new entrants. Thus, it was that, in 2010, the government decided that the role of the TLOA would terminate, and that the responsibility for the administration of the scheme would be transferred to the actual transport providers. The CEOs were informed by the Department of Education that their role as actual transport liaison officers would conclude as of the end of December, 2011. By way of concession, the TLOA payments continued to be paid until June, 2012, at which point the payment ceased for all CEOs. The applicants sought to challenge this change by way of judicial review.
The Three Issues Determined by the High Court
8. While the applicants also sought a variety of other reliefs, the judge held that the case reduced itself to three fundamental issues: first, the legality of the purported categorisation contained in the 2012 Circular which was to apply to the new ETBs as and from the commencement of the new legislation; second, the question of whether the Department of Education had complied with the terms of the Croke Park Agreement 2009 ("Croke Park" or "CPA") in the manner in which it organised the redeployment of CEOs, leading to, in turn, to a question as to whether the CPA gave rise to enforceable legal rights either in contract or under the doctrine of legitimate expectations; and, third and central to this appeal, the lawfulness of the termination of the TLOA.
9. It is necessary to briefly set out the full reasoning of the High Court judge in relation to the first two issues.
10. As regards the first issue, the validity of the 2012 Circular, the judge was "un-persuaded" by the contention that the respondent Minister had taken actual steps to compromise the legal entitlements of the two applicants as statutory office holders prior to the enactment of the new legislation, or that the 2012 Circular was unlawful in any way. This determination is not appealed.
11. On the second issue, that is the compliance of the Department with the terms of the CPA, the judge held that a recommendation of the Labour Court on this point amounted, at most, to a binding resolution of any dispute between the parties for industrial relations purposes only. He held that it did not constitute a res judicata ; nor did it preclude the two applicants from applying to the court for declarations as to the legality of the withdrawal of the TLOA. Part of the applicants' claim was based on the principle of legitimate expectations. But the judge held that the language of the Labour Court recommendation was too imprecise, conditional and aspirational to permit a legitimate expectation. He explained that those commitments in the CPA were predicated on the delivery of "change and flexibility" arrangements. The nature of such commitment did not lend itself to judicial evaluation by reference to cognisable legal standards. Consequently, he found that none of the Croke Park provisions, insofar as they were relevant to this case, could give rise to a legitimate expectation on the part of the applicants. This determination was not appealed either.
The Central Issue
12. The central issue in this appeal is the final conclusion of the learned trial judge. This concerned whether the termination of the TLOA was lawful. The judge's reasoning was entirely clear. He correctly pointed out that, as far as these proceedings were concerned, the validity of the termination of the TLOA must be governed entirely by legal considerations, and not by any industrial relations or conciliation process. He noted that the Labour Court had considered the TLOA in a determination in January, 2013. The recommendation contained a formula, accepted by the Department, that CEOs receive a once-off compensation payment for the abolition of the allowances, and furthermore that they would receive some protection for associated pension entitlements. Mr. MacDonncha was closer to retirement age than Dr. Sweeney. Under the formula, Mr. MacDonncha's pension entitlement would have been almost completely unaffected by the new regime. This was not quite so in the case of Dr. Sweeney, save in the event that she was to retire within seven years of the date of the judgment. The Labour Court's recommendation called for further negotiations between the parties regarding the pensionability of the allowance in respect of persons such as Dr. Sweeney, whose pension entitlements were affected by the abolition of the TLOA.
The High Court Determination on the Central Issue
13. The judge then turned to s.15(6) of the 2001 Act, which provides:
"A Chief Executive Officer shall hold office upon and subject to such terms and conditions (including terms and conditions relating to remuneration and allowances) as may be determined by the vocational education committee for which he or she is chief executive officer with the consent of the Minister." (Emphasis added)
Interpreting this provision, the judge concluded that the allowances to which a CEO was entitled were to be determined by the local VEC. He held that, while the Minister must " consent " to the relevant employment terms, including such remuneration and allowances, the subsection " unambiguously " assigned the role of determining the terms and conditions of the CEOs to the local VECs. He held this inevitably included all decisions regarding any variations of the conditions of employment, including the termination of allowances.
14. At para. 53 of his judgment, the judge concluded:
"53. Yet no evidence has been supplied to show that any decision to terminate the allowance was taken by the relevant VECs (namely County Galway and County Mayo respectively). Quite the contrary: it is instead clear that the decision was taken by the Minister for Education. But as is clear from the express terms of s. 15(6) of the 2001 Act, the Minister has absolutely no role in terminating the allowances or otherwise varying the terms and conditions of employment of the CEOs. It is thus plain that the purported termination of the allowances by the Minister was unlawful."
Under the heading of "Conclusions" in the judgment, the High Court judge held, at para. 54(d): "By virtue of s. 15(6) of the 2001 Act the payment of allowances is to be determined by the Vocational Education Committee themselves and the Minister's role is simply to consent to such payment. The Minister is, however, given no power to terminate such payments in the manner in which he purported to do so and the revocation of such payments in June 2012 by the Minister must accordingly be judged to be unlawful."
The judge explained that the judgment addresses the situation only with regard to the circumstances which obtained immediately prior to the coming into force of the 2013 Act. Any arguments which might conceivably have arisen with regard to the operation of that Act would, he held, have to be addressed in separate proceedings.
The Appeal
15. In appealing this judgment, the Minister makes one simple point: that this third issue was never argued, and that it was simply not open to the High Court to reach this conclusion on an issue that was not before it, and had not been argued.
16. The notice of appeal filed on behalf of the appellant Minister is succinct. It seeks the setting aside of the judgment and order of the High Court insofar as it related to the validity of the termination of the TLOA. The notice reads, insofar as material:
"1. Contrary to fair procedures and to the principles of natural and constitutional justice, including without limitation to the principle audi alteram partem, the learned trial judge adjudicated and decided the question of the lawfulness of the termination of the Transport Liaison Officers Allowance (TLOA) by reference to and upon a mixed point of law and fact that was not pleaded, that did not fall within the grounds upon which leave to apply for judicial review had been granted to the Applicants, that was not raised or argued by the parties and, further that was not raised by the Court of its own motion in the course of the hearing of the matter or at any time prior to judgment. Determining the lawfulness of the TLOA by reference to grounds which had not been pleaded or argued by the Applicants nor raised by the Court has caused and continues to cause prejudice to the Respondent/Appellants in that they have not had any opportunity to respond to the ground in argument before the High Court nor to adduce evidence relevant thereto."
The Appeal to this Court 17. Counsel submits that if the point had been pleaded and raised, the respondents would have advanced a series of arguments controverting this conclusion. What follows is a description of the points counsel for the Minister says would have been made; it does not represent any conclusion by this Court.
18. First, it is said now that the Minister had an important role in determining the terms and conditions of employment for CEOs of VECs under the Vocational Education Acts 1930-2001, specifically the creation, maintenance, variation or termination of allowances attaching to their employment, including the TLOA: this role was reflected in the established centralised bargaining process at national level on national pay agreements, insofar as applicable, to CEOs of VECs; second, that the Minister was centrally involved in the creation of the TLOA, and its variations upwards of the TLOA; third, that the Minister was the source of important elements of the funds devoted to paying the TLOA; fourth, that, in fact, the applicant CEOs had accepted and relied upon all upward variations of the TLOA effected by ministerial decisions since the date of their appointment.
19. Counsel referred to a circular dated the 12th August, 2008, which was communicated to the CEO of each VEC that, with effect from the 1st January, 2008, the TLOA would be administered by each VEC but recouped from the Department of Education in the same way as other pay expenditure.
20. Counsel submits that it would have followed from a consideration of the circumstances surrounding the creation of the TLOA, and the respective roles of the Minister and VECs in relation to its administration and payment, that the existence, variation or termination of the TLOA were never matters which the VECs had themselves power to determine, whether pursuant to s.15(6) of the 2001 Act or otherwise. The Minister's case would have been that, under s.15(6) of the Act, his consent was required to approve any terms and conditions upon which the CEO of a VEC held office; that he had ceased consenting to the payments of the TLOA to CEOs of VECs, whether as a term or condition of their employment or otherwise, and that consequently the allowance could not be validly paid thereafter.
21. Counsel for the Minister now submits that it is evident from the 2001 Act, when read as a whole, that s.15(6) did not confer upon a VEC the power to continue payment of an allowance to a CEO, in circumstances where the Minister had terminated the allowance and no longer consented to its payment. Alternatively, it is said that the decision-making function of VECs with regard to the TLOA had always been met by the agreement and conduct of the VECs in administering that arrangement. Thus, counsel submits the case would have been made that the applicants would have been estopped from contending that the Minister had no power to abolish the TLOA.
22. These points were advanced without prejudice to the Minister's further contention that, in the judicial review proceedings, the applicant CEOs had not taken issue with the proposition that, in fact, it was the Minister who had terminated the TLOA, as distinct from the proposition that the TLOA had, as it were, been terminated. This arose in circumstances where, based on reliance upon earlier ministerial decisions and circulars, the applicants themselves contended in the High Court they had a legitimate expectation to the continued payment of the TLOA as part of their remuneration package, notwithstanding the termination of the function to which the allowance related.
23. Counsel for the Minister submits that, if the issue had been pleaded, or if it had been raised during the hearing, she would have sought leave to advance additional evidence on affidavit in support of these arguments; that such evidence would have tended to demonstrate that the circumstances surrounding the creation of the TLOA was not a matter which the VECs had power to determine, whether pursuant to s.15(6) of the 2001 Act or otherwise; that the evidence would have tended to show that the VECs had, in fact, agreed with, or must be deemed to have been in agreement with, the decision that the TLOA be abolished; and that the position and conduct of the respondents historically in relation to the Minister in respect of the TLOA, and their conduct regarding its abolition, was such that the two CEOs were estopped from contending that the Minister, as distinct from the VECs, had no power to abolish the TLOA.
24. The Minister's appeal was originally brought to the Court of Appeal. Ultimately, it was transferred to this Court. Unusually, therefore, the matter came for consideration by this Court directly from the High Court. The first hearing before this Court took place on the 4th December, 2017. It became clear at an early stage that the fundamental issue before this Court for determination was factual, whether or not the ultra vires question, as held by the judge in his judgment to be determinative , had been pleaded, or raised in court. Counsel for both sides made extensive reference to the affidavits, pleadings and notes made at the time. This process was inconclusive. The Court directed that the parties should obtain a Digital Audio Recording ("DAR") transcript of the hearing. The Court has carefully examined this transcript.
Assessment
25. There is no doubt that there are numerous instances from the pleadings, affidavits, exhibits and submissions in which there is reference to the " unlawful ", " ultra vires ", " null ", " void ", and " breach of statute aspects " of the decision to terminate the TLOA. But the question is not whether those words appear, but whether the issue which the judge held to be dispositive was properly before him for determination either by way of pleadings, submissions, or as an issue raised by the judge himself during legal argument. There is no doubt that counsel for the applicants did allude to the principle on a number of occasions in argument in the High Court. But the issue is not whether a vires question was raised, but rather, whether it had ever been submitted that the Minister in fact had no power to terminate the TLOA? The statement of grounds advances many claims. The statement of opposition rebuts these at length. But it is not possible to find any specific claim in the applicants' case that the Minister had no power to terminate the TLOA, and that the termination thereof was thereby invalid. Neither the statement of grounds of opposition nor the affidavits deal specifically with the issue.
26. There was, be it said, a considerable delay in obtaining copies of the High Court transcript. The matter again came before this court. Counsel for the applicants, in a forceful and detailed argument, referred the Court to the various parts of the transcript where vires was discussed.
27. The Rules of the Superior Courts, specifically Order 84, Rule 20, which governs judicial review proceedings, make plain that an applicant's case must be pleaded clearly and explicitly. There is no doubt that, as counsel for the Minister acknowledges, vires was alluded to in argument on a number of occasions. But the explicit point, as determined by the judge, was not raised either by him or by counsel. The Minister succeeded on the other two points. The only issue upon which the two applicants, in fact, succeeded was upon the third issue, which was not specifically pleaded, and was not considered at the hearing in specific terms. This is not a question of blame, but mischance. Unfortunately, that mischance can lead to only one conclusion; that is, that there was in this case a departure from fair procedure. This was a mishap which goes to the question of fairness.
Decision
28. In circumstances such as these, the Court must balance the rights of the parties. There is here a simple concept of audi alteram partem and fair procedures. Under the Rules of the Superior Courts, and as a matter of fair procedure a party must be entitled to know the precise case that is being pleaded against them. But, bearing in mind the elapse of time and other considerations, it would be unfair if the case were now to be determined by this Court simply on the basis of some procedural deficiency or a pleading point, which had not been raised in the High Court and had not been properly addressed by either side. This is a question of striking the right balance in fairness and outcome.
The Order
29. The order of the Court will refer to the second applicant only. No order can be made in relation to the first applicant at this time, and until the proceeding is reconstituted. In the circumstances, the Court will order that the judgment and order of the High Court, with regard to the second applicant, be set aside on the "third issue", that is, the finding that the Minister acted ultra vires s.15(6) of the 2001 Act. As a matter of fair procedure, it is necessary that this single issue be reheard in the High Court before a different judge. Accordingly, this sole question of vires will be remitted back to the High Court for re-argument.
30. It will be necessary to file an amended statement of grounds pleading this one specific issue of vires explicitly, but no other issue. The respondent Minister will be permitted to file a new statement of grounds of opposition in order to deal with that question, but no other question. No other issue may be revisited or reopened. The Court will allow four weeks for the filing of an amended statement of grounds for this purpose, and four weeks for the filing of the statement of grounds of opposition. Such further or other matters as may be necessary for doing justice in this case should be dealt with by the High Court.
