First civil partnership dissolution in Ireland

With kind permission of the Irish Times  

Monday, November 18, 2013 - page 2. 

Ruadhán Mac Cormaic, Legal Affairs Correspondent

Same-sex couple have civil partnership dissolved

UK: Prisoner disenfranchisement is not a fundamental feature of the law

The Supreme Court has dismissed appeals by two convicted murderers who argued that European Union law gave them the right to vote in UK elections.

Peter Chester, who is serving a life sentence in the UK, and George McGeoch, who is behind bars in Scotland, both tried to sidestep British legislation over prisoner voting rights. The European Court of Human of Rights in Strasbourg having in the past deemed Britain's voting ban for all those serving a sentence illegal.

The Supreme Court observed that since the European Court of Human Rights had already declared the blanket ban on prisoners voting incompatible with human rights, there was no point in repeating it.

Mr. Chester, in his 50s, is serving life for raping and strangling his seven-year-old niece, Donna Marie Gillbanks, in Blackpool in 1977. He is detained at Wakefield prison in West Yorkshire; the minimum term he was ordered to serve before becoming eligible to apply for parole has expired.

Mr. McGeoch, from Glasgow, is serving his life sentence at Dumfries prison for the murder in 1998 of Eric Innes in Inverness. He received a minimum term of thirteen years but owing to subsequent convictions, including taking two prison nurses hostage in a siege in 2001, will not be considered for parole until 2015.

Handing down the decision, Lord Mance said that:

[t]he provisions on voting contained in the applicable European treaties focus on the core concerns of ensuring equal treatment between EU citizens residing in member states other than that of their nationality, and so safeguarding freedom of movement within the EU. Eligibility to vote in member states is basically a matter for national legislatures.

The Supreme Court observed that even if voting were to be extended to some prisoners, it was unclear that either Mr. McGeoch or Mr. Chester would necessarily benefit from a change to the rules, which could exclude prisoners convicted of more serious offences.

Lady Hale, observed:

Prisoners' voting is an emotive subject. Some people feel very strongly that prisoners should not be allowed to vote. And public opinion polls indicate that most people share that view.

Lord Sumption, observed that:

In any democracy, the franchise will be determined by domestic laws which will define those entitled to vote in more or less inclusive terms [....] The exclusion of convicted prisoners from the franchise is not a universal principle among mature democracies, but neither is it uncommon.

Lord Sumption also noted:

From a prisoner's point of view the loss of the right to vote is likely to be a very minor deprivation by comparison with the loss of liberty.

Lord Sumption observed that the Strasbourg based Court had 'arrived at a very curious position', noting:

Wherever the threshold for imprisonment is placed, it seems to have been their view that there must always be some offences which are serious enough to warrant imprisonment but not serious enough to warrant disenfranchisement. Yet the basis of this view is nowhere articulated.

The Court ruled in the case of John Hirst in 2005, that a blanket ban on allowing serving prisoners to go to the polls was incompatible with the European Convention on Human Rights.

Moreover, the Court concluded that it was up to individual countries to decide which inmates should be denied the right to vote from jail, but a total ban was illegal.

In November, the Government published the voting eligibility (prisoners) draft bill for pre-legislative scrutiny by a Joint Committee of both Houses. The Bill set out three options: a ban for prisoners sentenced to four years or more, a ban for prisoners sentenced to more than six months and a restatement of the existing ban.

Update 17/12/2014: The Supreme Court has published the judgment finding that there is no common law right to vote. The case, heard in July, challenged the legality of the Scottish Independence Referendum (Franchise) Act 2013. The Act of the Scottish Parliament prohibited prisoners from voting in the Referendum. The case questioned the compatibility of the Act with Article 3, Protocol 1 of the European Convention on Human Rights and the putative common law right to vote.

ECHR: Whole life tariffs must be subject to periodic reviews

In July, the European Court of Human Rights ruled that a ‘whole life’ sentence, forcing murders to die in prison, is inhuman and degrading after an appeal was brought by Jeremy Bamber, who murdered five members of his family in 1985.

The Strasbourg based Court proposed that those serving life without the possibility of parole should have their cases reviewed after 25 years, after which they could be freed.

The ruling sparked a furious reaction from figures within the government. However, there is no right of appeal against the ruling and the government has six months to act upon the ruling.

Arthur Hutchinson has lodged the first challenge of a ‘life means life’ prison sentence following the European Court of Human Rights ruling.

Mr. Hutchinson is serving a ‘whole life’ sentence for stabbing Basil and Avril Laitner and their son Richard, before raping their 18-year-old daughter Nicola at knifepoint on the night of a family wedding in October 1983.

Durham Crown Court ruled that Mr. Hutchinson should serve 18 years. However, then Home Secretary Leon Brittan later ruled Mr. Hutchinson should serve life.

Mr. Hutchinson has already brought a challenge against the sentence in the courts. Just five years ago the Court of Appeal ruled that there was ‘no reason at all’ to depart from the sentence.

Mr. Justice Tugendhat noted that:

[t]hese were exceptionally serious murders, and it is right that the applicant should remain in prison for the rest of his life by way of punishment.

The government has already been asked to provide an official response to the claim by Arthur Hutchinson. This could lead to a full hearing in 2014. If the Court rules in favour of Mr. Hutchinson, he could win the right to be freed.

EW: A vasectomy may be in the best interests of a vulnerable adult if it improves the quality of life and/or leads to lessened supervision

In a seminal High Court (sitting as the Court of Protection) ruling delivered by Ms. Justice Eleanor King, a man with significant learning difficulties has been ordered to undergo a vasectomy to prevent him from having more children.

Mr. Justice King remarked that there was ‘no question’ of the man known as ‘DE’ of having the mental capacity to use contraception, but that it is lawful and overwhelming in the best interests of ‘DE’ to have a vasectomy.

‘DE’ is in a long term relationship with his girlfriend ‘PQ’, who also has learning difficulties. In 2010 ‘PQ’ gave birth to ‘XY’, a boy of whom ‘DE’ is the biological father.

Measures were taken to prevent another pregnancy, as a result. ‘DE’ was required to be supervised at all times, effectively losing his independence.

For both families, the consequences were profound. It also impacted on the relationship between ‘DE’ and ‘PQ’, which ‘nearly broke under the strain, but remarkably weathered the storm’.

The son ‘XY’ is now in the care of his maternal grandmother. However, the High Court  heard it was inevitable that if ‘DE’ and ‘PQ’ had another child, the child would be taken into care. This would cause significant psychological distress, likely resulting in a breakdown of the relationship.

‘DE’ has made it clear that he does not want any more children. The Court heard that ‘DE’ took no parental responsibility, and is not willing to give up his own life to be a father.

While Ms. Justice King considered the restoration of his independence and the resumption of his relationship with ‘PQ’, to be of the utmost importance, a vasectomy is ‘undoubtedly’ in the best interests of ‘DE’.

  
Ms. Justice King insisted that the seriousness of making the court order that ‘had the effect of taking  away the fertility of a man’ had not been underestimated:

In my judgment it is overwhelmingly in DE’s best interests to have a vasectomy. That being said the court does not make such an order lightly, conscious as it is for the court to make an order permitting the lifelong removal of a person’s fertility for non-medical reasons requires strong justification.

The seminal ruling followed a four day trial,  marking a three-year legal battle for the parents of ‘DE’.

The parents of ‘DE’ went to their local General Practitioner and requested ‘DE’ have a vasectomy, in 2010. The matter was referred to the local NHS Trust. An application by the NHS Trust was made to the High Court with the support of the parents of ‘DE’, the General Practitioner, and the local authority involved in the care of ‘DE’.

 
Comment: The only known previous case in the United Kingdom involving an application for male sterilisation was in 1999. The Court refused, ruling that a vasectomy would not be in the best medical and emotional interests of the 28-year old with Down’s Syndrome.

ComReg benchmarking must be in line with EU directives

The imposition of price control by ComReg that could have reduced the cost of making mobile calls have been struck down in the High Court.

The European Union and ComReg have been attempting to reduce the fees that mobile companies charge each other for carrying calls, as these affect the prices paid by consumers.

The higher charges make it difficult for new companies to get a grip in the market.

Vodafone had appealed two decisions by ComReg, imposing new maximum wholesale charges to other mobile companies for service called ‘Mobile Voice Call Termination’.

Mr. Justice John Cooke noted ComReg had directed Vodafone to adopt a particular cost recovery method, and charge a maximum of 2.6 cent per minute from January 1st 2013, and 1.04 cent per minute from July 1st.

Mr. Justice Cooke observed, the issues concerned the nature of ComReg in its entitlement to take account of relevant directives on pricing and cost recovery methods.

The pricing instruction devised by ComReg to Vodafone was a result of benchmarking of what Vodafone charged against seven European Union member states.

Vodafone argued that the ComReg devised methodology was incompatible with European Commission rules, and that ComReg had acted unlawfully in benchmarking prices without reference to actual costs in Irish markets.

Mr. Justice Cooke observed that ComReg in its benchmarking approach in the price control decision was beyond the powers designated to ComReg under European Commission regulations.

The result produced by the use of a benchmark based upon only seven European Union countries is a result so flawed by its random nature and uncertain reliability that it could not constitute a sufficiently robust basis for the application of European Commission regulations.

The court allowed the appeal in part and set aside the direction by ComReg to Vodafone, ensuring that its mobile termination rates are set at 2.6 cent and 1.04 cent per minute.

While only Vodafone sought to challenge the decision of ComReg, the ruling will also have implications for the other mobile phone operators.

The case in the High Court related to a price-control decision by ComReg of November 2011 for the service known as ‘Mobile Voice Call Termination’.

Mr. Justice Cooke adjourned making final court orders, placing a stay on the judgment until September 24th.

NI: Irish asylum standard not compliant with EU requirements

On Wednesday, a non-Arab Darfuri journalist who fled Sudan with her three children amid concerns the family would be killed due to her views on race and politics, won a High Court challenge from being returned to the Republic of Ireland.

Mr. Justice Stephens quashed a decision by the UK Border Agency to send ALJ and her three children A,B and C, back to the Republic of Ireland on the basis that it was in the best interests of the family to remain in Northern Ireland. .

ALJ gave evidence of a being a political journalist and writer who suffered a series of arrests, assaults and a miscarriage.

In April 2010, ALJ and her three children left Sudan with the help of traffickers, Mr. Justice Stephens heard. Her husband had to remain in Sudan, and ALJ is unaware if he is still alive. ALJ and her three children disembarked in Dublin three weeks later.

ALJ was informed that her entitlement to remain in the Republic of Ireland had expired when her bid for refugee status was refused. In July 2011, ALJ and the children travelled to Northern Ireland and applied for asylum in the United Kingdom. When authorities in the Republic of Ireland accepted a request to take ALJ and the three children back to conclude the asylum proceedings in the Republic, a challenge in the Northern Ireland High Court was launched.

The argument that during the asylum of process in Ireland, which can take up to five years, the family would be subject to standards that do not comply with the minimum required set out by the European Union.The current asylum process in the Republic means the applicants would not be able to work. The children at the age of 16 are not entitled to an education, and the family would have to live in hostel accommodation.

For the sake of the children, Mr. Justice Stephens held that the family should remain in Northern Ireland. Mr. Justice Stephens quashed the removal decision. The decision not to assure responsibility for determining the asylum application in the United Kingdom  on the basis of a failure to consider the need to safeguard the welfare of children was also quashed by Mr. Justice Stephens.

New laws must contain adequate principles and policies

On July 26th, Mr. Justice Gerard Hogan ruled offences against David Douglas, charged under section 18 of the Criminal Law Act 1935 were unconstitutional due to being insufficiently precise and lacking any ‘clear principles and policies’ in relation to defining the scope of the prohibited conduct.

The case against Mr. Douglas, observed massaging his penis through his clothing in a Dublin City centre café on two consecutive days, cannot proceed after Mr. Justice Hogan ruled the offences of causing scandal and injuring the morals of the community are unconstitutional.

The charges related to separate incidents at the café in January 2009.

Mr. Justice Hogan stressed the importance that there was no allegation that Mr. Douglas had exposed himself. It was also contended Mr. Douglas either desisted or disguised his activities when other people approached.

Counsel for Mr. Douglas argued the offences breached the rights of Mr. Douglas under the constitution, including the right to equality before the law and protection of personal liberty. The Criminal Law Act 1935, section 18 provides:

Every person who shall commit, at or near and inside of any place along which the public habitually pass as of right or by permission any act in such a way as to offend modesty or cause scandal or injure the morals of the community shall be guilty of an offence under this section and shall on summary conviction thereof be liable to a fine not exceeding [IR£500] or, at the discretion of the court to imprisonment for any term not exceeding [six months].

Mr. Justice Hogan ruled the words ‘or cause scandal or injure the morals of the community’ in section 18 of the 1935 Act were ‘hopelessly’ and ‘irremediably’ vague and lacked any real principles and policies in relation to the scope of the prohibited conduct.

However, Mr. Justice Hogan emphasised that the ruling does not prevent the Oireachtas legislating to create new offences which would address conduct of this nature, but any new laws must contain adequate principles and policies.

Private prosecution of indictable offences permissible

Mr. Justice Gerard Hogan in a seminal High Court ruling upheld the right of citizens to bring private prosecutions against individual banking officials.

The ruling will allow hotelier Patrick Halpin to bring private prosecution agaisnt two officials of the Irish Banking Resolution Corporation Mr. Halpin alleges behaved dishonestly during discussions about a rescue plan for his business. 

In the first case of its kind since the banking collapse, a summons has been issued to compel banking officials to attend a Distrct Court to answer allegations.

The decision to proceed further with the case will be a matter for the Director of Public Prosecution once the District Court hearing has taken place.

Mr. Justice Hogan in his written ruling noted that:

the underlying purpose of the private prosecution is still the same, namely, to draw to the public prosecutor's attention to the case with the implicit request that the prosecution be taken over.

While the ruling allows for private prosecution, there are risks involved, such as the substantial legal costs should the prosecution fail.

The ruling came after Mary Kelly and Declan Buckley, the former a current employee and the latter a former employee of the Irish Banking Resolution Corporation sought a judicial review to halt the private prosecution against them.

Mr. Halpin has run hotels in Dublin and in County Clare for the past twenty five years, these include the Aberdeen Lodge and Merrion Hall boutique hotels in Dublin, and Halpin's Townhouse in Kilkee, County Clare.

The Irish Banking Resolution Corporation appointed a receiver to two of the companies last year after Mr. Halpin got into financial difficutly in recent years over borrowings with the former Anglo Irish Bank.

Mr. Halpin claims he was invited to a meeting with Ms. Kelly and Mr. Buckley in February 2012 to discuss the sale of Merrion Hall in an attempt to pay down the debt. The meeting occurred prior to a receiver being appointed.

Mr. Halpin claims both himself and his accountant were left with the impression from the meeting that the matter would be considered further by Anglo Irish Bank, and that Anglo Irish would welcome proposals.

However, Mr. Halpin claims he later learned from a letter he subsequently received that the decision to appoint a receiver had already been made, and that both Ms. Kelly and Mr. Buckley were aware of this at the meeting, but deliberately concealed this knowledge from Mr. Halpin.

Subsequently, Mr. Halpin initiated a private prosecution against Ms. Kelly and Mr. Buckley in the District Court, alleging offences of dishonesty under the Criminal Justice (Theft and Fraud Offences) Act 2001, and succeeded in getting the District Court to issue a summons against both individuals. The argument  put forward in the High Court  to halt the private prosecutions was that private prosecutions  had been effectively abolished by the Criminal Justice Act 1999.

It was also put to the High Court that there had to be a preliminary examination procedure for a private prosecution to take place.

Mr. Justice Hogan disagreed with the argument that private prosecutions had been effectively abolished because the 1999 Act abolished the traditional practice of holding a preliminary investigation in the District Court to determine if sufficient grounds existed for sending a person forward for trial to a higher court.

Mr. Justice Hogan placed a stay on the private prosecution until January to allow Ms. Kelly and Mr. Buckley to appeal to the Supreme Court.

Strict legal requirements must be met to execute search warrant

A retired Central Bank administrator who got four years and a €5,000 fine for the possession of hundreds of thousands of child porn images and videos had his conviction quashed because of  the incorrect date on the search warrant.

The Court of Criminal Appeal overturned the conviction of Raphael Farina after the Court found that the search warrant  used to search his home was dated incorrectly and consequently  did not permit entry to the apartment  of Mr. Farina in Dublin city centre.

Counsel for Mr. Farina, Ms. Aileen Donnelly SC told the Court of Criminal Appeal that a combination of five flaws in the search warrant obtained, rendered the search warrant invalid in law and incapable of permitting entry to the apartment.

Among the flaws were a misspelling of the address as ‘Springer’s Yard’, instead of the correct address as ‘Spranger’s Yard’. Another flaw was the absence of information regarding the issuing District Court area and number. The date of the search warrant as May 6th 2007 was actually issued on June 6th 2007.

The court also heard  that an alteration was made to the search warrant, with a line drawn through the May 6th 2007 date, after its execution.

Mr. Justice Donal O’Donnell noted that before a search warrant to enter a home can be executed, the legal requirements must be strictly met. He found that the defect in the date was fatal to the warrant because the document on its own terms stated that entry was permissible within seven days of May 6th 2007.

Mr. Justice O’Donnell noted the search warrant was meant to be understood in simple terms. Further, the warrant must be taken as it would appear when presented to the accused man.

Judgement was not reserved because Mr. Farina  has been in custody since 2011. No retrial was ordered.

EW: Residents’ parking fees cannot subsidise transport budget

In a seminal High Court ruling delivered by Ms. Justice Beverley Lang, Town Halls cannot deliberately profit out of cash raised from motorists for parking outside their private residence.

However, Ms. Justice Lang did not rule illegal the half billion pound sterling surplus generated from parking as a whole. This means councils are still entitled to make a profit once fines, car parks and meter charges are put into the mix.

The catch is, the money raised must be used solely for transport whether it is fixing roads or paying for concessionary bus passes.

Barnet Council has been in the High Court before over  parking, and appears to be confused on the law where parking is concerned.

Other councils have maintained  that the profits raised are purely coincidental, and within the law. Councils in England and Wales cannot understand what possessed Barnet Council to ask Pricewaterhouse Coopers to include money raised from permits into the calculations.

The High Court ruling paves the way  for legal challenges against other councils profiting from selling residents’ permits.

A prisoner, whose original punishment was commuted, is serving sentence and not a commutation and is therefore entitled to remission on good behaviour

The Supreme Court has ruled that a prisoner, whose original punishment of the death penalty was later commuted to forty years in prison, is serving a sentence and not a commutation, and is therefore entitled to remission on good behaviour.

Noel Callan has been in prison since June 27th, 1985. Mr. Callan was convicted and sentenced to death for the capital murder of Garda Sergeant Patrick Morrissey on December 3rd, 1985. His imprisonment under the sentence of death lasted until May 29th, 1986 - when the President of Ireland, on advice of the Government, commuted the death sentence to Penal Servitude to forty years. In 1997 Penal Servitude was abolished and replaced by imprisonment.

Counsel on behalf of Mr. Callan submitted that he is a prisoner serving a sentence of imprisonment. Therefore Mr. Callan is entitled to remission of at least one quarter, perhaps even up to one third, under section 11(5) of the Criminal Law Act 1997 and by article 59 of the Prison Rules 2007. 

Originally Counsel submitted on behalf of the State that Mr. Callan is serving a "full sentence of forty years". When the case was heard in the High Court before Mr. Justice Michael Hanna, both parties agreed that Mr. Callan is, in law, a prisoner serving a sentence of forty years. Although the parties disagreed on whether the terms of the "sentence" excludes remission. 

However, on day three of the High Court hearing the State called the Principal Officer in the Department of An Taoiseach to give evidence. Mr. Kennedy produced a letter in Court dated May 29th, 1986, from the Secretary of the Government to the President that contained the actual advice:

At a meeting held today, the Government decided to advise the President in the exercise of the power vested in him by Article 13.6 of the Constitution to commute to Penal Servitude for forty years the sentence of death by the Special Criminal Court on the 3rd of December 1985 on Noel Callan on his conviction of the capital murder of Garda Sergeant Patrick Morrissey. Pursuant to that decision, I have been directed by the Taoiseach to convey the Government's advice to the President to commute the sentence of death accordingly.  

The advice in the letter does not specify that the commutation from the death penalty to penal servitude was on the understand that it would be served without remission. This caught Counsel for the State by surprise.

After the evidence of Mr. Kennedy, a new submission on behalf of the State argued that Mr. Callan is serving a commutation and therefore falls outside the scope of the Prison Rules. However, Mr. Justice Hardiman pointed out the difficulties with this argument:

It is suggested that [Mr. Callan] was liable to be held in custody for forty years without being subject to the obligations of, or entitled to the protections contained in, the Prison Rules. It must be doubted whether that form of imprisonment would comply with the Constitution or with the State's international obligations.

Accordingly, on appeal to the Supreme Court, a third submission was made on behalf of the State. Counsel submitted that Mr. Callan is not a sentenced prisoner but is entitled to the benefits of the Prison Rules with the exception of Rule 59.

Despite acknowledging the Government had continued to apply remission as if the rule applied to prisoners serving sentences of penal servitude, Counsel for the State suggested that remission could not apply to Mr. Callan because precedent held that the predecessor to Rule 59 did not apply to such prisoners. Expressing his "grave distaste" for such arguments, Mr. Justice Hardiman quipped:

It would have been quite possible to amend the Prison Rules but this was not done. Instead, it was simply decided to proceed as though the Carney case had never happened [...]. The State case continued in this way until Penal Servitude was itself abolished in 1997, forty years after Carney was decided. But, fourteen years later again, when [Mr. Callan] claimed he was entitled to remission it was solemnly decided to rely on Carney [...].

The eventual case submitted on behalf of the State was that Mr. Callan is serving a commutation and not a sentence. However this argument was rejected by Mr. Justice Hardiman on four grounds.

One, when Mr. Callan challenged the legality of his detention under Article 40 the Governor of the Prison established the legality of his detention citing the order of the Special Criminal Court, the advice of the Attorney General, and the letter dated May 29th, 1986.

Two, the forty year period of imprisonment was described by the State as a sentence.

Three, all prisoners sentenced to Penal Servitude of forty years have been released by Executive action.

Four, the submission on behalf of the State that Mr. Callan is serving a commutation is "in terms of logic, law and language" nonsense, as it means "the action or process of changing or altering.

Therefore Mr. Callan was awarded a Declaration stating that he is eligible to earn remission by good conduct under Rule 59(1) of the Prison Rules 2007.  

NI: Same sex adoption in the best interests of the child

The Northern Ireland Court of Appeal dismissed a challenge on Thursday by the Department of Health to overturn a seminal High Court ruling that the prohibition on same-sex and unmarried couples adopting children is unlawful. Centred around judicial review proceedings was the blanket ban imposed under the Adoption (Northern Ireland) Order 1987.

In October 2012 the relationship status based ban was held to discriminate against those in civil partnerships. The High Court found excluding couples based on their relationship status limited the pool of potential adopters and could not be in the best interests of the children.

The High Court verdict came in a legal challenge mounted by the Northern Ireland Human Rights Commission. The Commission was seeking to force a legislative change to bring adoption laws into line with the United Kingdom.

In the United Kingdom, Scotland, and Wales, unmarried couples can apply jointly to be considered for adoption regardless of sexual orientation.

Attorney General for Northern Ireland appealed against the High Court ruling on behalf of the Department of Health. John Larkin QC argued that the criteria as it stood is lawful and appropriate and that the criteria serves in the best interests of the children.

Lord Justice Garvan held that the Department of Health failed to provide a proper explanation for why same-sex couples are ineligible once the relationship has been publicly cemented:

This cannot provide a rational basis or justification for the differential treatment of those  in a civil partnership compared to same-sex couples outside a civil partnership. 

Lord Justice Garvan expressed regret that until recently the website of the Department of Health failed to provide correct advice on the issue:

If it is to avoid being misleading Departmental guidance must take account of the effect of the law as it currently stands. It must take account of the outcome of the present appeal.

The Department of Health could seek to challenge the ruling in the British Supreme Court. 

Obligation on banks to assess creditworthiness of borrowers

In 2012 the High Court awarded KBC Bank €17,694,130 in damages against Dublin based law firm BCM Hanby Wallace (now Byrne Wallace) over failures to ensure the bank had security for the loans.

The Supreme Court has directed the High Court to reconsider findings that there was no contributory negligence by KBC Bank in how the bank suffered muti-million euro losses to struck-off solicitor Thomas Byrne and property developer John Kelly.

KBC Bank incurred the losses due to the failure in having security for €25m loans advanced to Mr. Byrne and Mr. Kelly.

The Supreme Court ruling addressed seminal issues relating to the duties of banks to the shareholders when advancing loans, including the responsibility to investigate the financial standing of borrowers.

Mr. Justice Brian McGovern in the High Court found the matter was about ‘multiple failures’ repeated across several separate loan transactions. He rejected arguments of contributory negligence by KBC Bank on the grounds that the bank was entitled to rely on assurances from professionals retained by KBC Bank. The Supreme Court ruled Mr. Justice McGovern had erred in how the issue of contributory negligence by KBC Bank was addressed.

Mr. Justice Nial Fennelly said that while BCM Hanby Wallace negligence related to obtaining security for the loans was a direct and proximate cause of the loss, there was an issue as to whether it was the only effective cause of the loss. It was important in this context to distinguish between the two types of contributory negligence alleged against KBC Bank. The first type of contributory negligence is the want of care in making decisions to lend. The second type of contributory negligence is the failing to verify or supervise the solicitors’ performance of their duties.

On the assumption KBC Bank failed to exercise due care in lending, Mr. Justice Fennelly was satisfied KBC Bank was exclusively responsible for those decisions.

Mr. Justice Fennelly found it was not the task of BCM Hanby Wallace to check the financial soundness or reliability of Mr. Byrne and Mr. Kelly. He also found that the High Court erred in finding there was no contributory on grounds of finding the actions of the borrowers were merely an inevitable or necessary cause, and not a proximate cause, of the loss.

Mr. Justice Fennelly noted the effective cause of the loss was the decision to lend to Mr. Byrne and Mr. Kelly, combined with the negligence of BCM Hanby Wallace.

Mr. Justice McGovern remarked that aspects of the loans to Mr. Byrne were "highly questionable". He noted the "somewhat careless" approach of KBC Bank in its actions.

On the second type of contributory negligence, the failure to verify or supervise the solicitors’ performance of their duties, KBC Bank was entitled to rely on the expertise of BCM Hanby Wallace to put in place security. Although it may be argued that the responsibility of KBC Bank in this context was so small it should not be fixed with any responsibility, there is no absolute rule.

Mr. Justice McGovern argued that if evidence showed the errors of BCM Hanby Wallace were so obviously the errors could not have been overlooked, there was a fault on the part of KBC Bank and it was open to BCM Bank Wallace to argue the obligations KBC Bank had in accordance with European Union Regulations on Licensing and Supervision of Credit Institutions. Also see 2009 and 2013.

The European Union Regulations requires the banks to manage business in accordance with ‘sound administrative and accounting principles’. The banks are also required to put in place and maintain internal control and reporting arrangement to ensure  business in managed.

Mr. Justice Fennelly directed that Byrne Wallace appeal  be allowed on the issue of contributory negligence and the matter should be reconsidered by the High Court.   

Prison authorities have duty of care to inmates

A recent High Court ruling could have implications for prisoners attacked in custody, after a former prisoner sued for negligence and a breach of duty. Almost four times the amount awarded in 2009.

Peter Creighton was serving a sentence in Wheatfield Prison when he was attacked with a knife in January 2003. Mr. Creighton needed 120 stitches for two-and-a-half feet of lacerations to his body.

Mr. Creighton claimed the prison and the state failed to take reasonable precautions for his safety. He said he did not know his attacker, and the system for bringing prisoners from the cells to receive methadone was dangerous.

Counsel for the state argued that it was not possible in a prison to guarantee the safety of a prisoner and ensure his protection.

Mr. Justice Iarfhlaith O’Neill said there could be few tasks more difficult than the management of the prison system. Mr. Justice O’Neill added that the courts would not impose on prison authorities a duty of care that was not capable of being preformed, but said it was necessary for the courts to intervene were there were systems or practices that have obvious deficiencies and foreseeable risks.

The case of Mr. Creighton previously came before the High Court in October 2009. The state appealed the High Court ruling. The Supreme Court ruled the case should be re-heard.

UK: Assets vested in a company may belong beneficially to the controller, if the arrangement in respect of the assets are such as to make the company its controller's trustee for that purpose

The Supreme Court has ruled that assets vested in a company may belong beneficially to the controller, if the arrangement in respect of the assets are such as to make the company its controller's trustee for that purpose.

In November 2011, Mr. Justice Moylan, sitting in the High Court, ordered the husband, Michael Prest, to procure the conveyance of the matrimonial home to his wife, Yasmin Prest. Mr. Justice Moylan also ordered that Mr. Prest make a lump sum payment and periodical payments at a rate of two percent of that sum while it remained outstanding, together with school fees for the children. In addition Mr Justice Moylan awarded costs in favour of Ms. Prest, with a payment on account. He also ordered Mr. Prest to procure the transfer of seven UK properties owned by Mr. Prest's companies, Petrodel Resources Ltd and Vermont. The transfer of these seven properties to Ms. Prest is in partial satisfaction of the lump sum order.

Mr. Justice Moylan concluded that there was no general legal principle of law which entitled him to reach the companies' assets by piercing the corporate veil. This is because precedent shows that the separate legal personality of a company cannot be disregarded expect where it is being abused. While accepting there is no relevant impropriety, Mr. Justice Moylan found that in applications for financial relief ancillary to a divorce there exists a wider jurisdiction to pierce the corporate veil. 

However, the majority of the Court of Appeal disagreed with Mr. Justice Moylan. Lord Justice Rimer held that the practice developed by the Family Division was beyond the jurisdiction of the Court except where either the corporate personality was being abused, or on the particular facts of the case it could be shown that an asset legally owned by the Company was held in trust for Mr. Prest. Lord Justice Rimer considered that Mr. Justice Moylan had rejected both of these possibilities on the facts, and therefore should not have made the order.   

The question before the Supreme Court was whether the Court has the power order the transfer of seven properties to his wife given that the properties legally belong to the companies.

In his written judgment Lord Sumption outlined three possible legal bases on which the assets of the companies may be able to satisfy the lump sum order against Mr. Prest.

The first basis is where a court is at liberty to disregard to corporate veil in order to provide effective relief. On this point, Lord Sumption agreed with Mr. Justice Moylan. While Lord Sumption acknowledged that Mr. Prest has acted improperly in many ways, he found no evidence that Mr. Prest was seeking to avoid any obligation relevant to the divorce proceedings.

However Lord Sumption disagreed with Mr. Justice Moylan that the legislation on property adjustment orders in connection with divorce proceedings might be regarded as conferring a distinct power to disregard the corporate veil in matrimonial cases:

I do not accept this, any more than the Court of Appeal did. [Mr. Justice Moylan] was entitled to take account of [Mr. Prest's] ownership and control of the companies and his unrestricted access to the companies' assets in assessing what his resources were for the purpose of section 25(2)(a). But he was not entitled to order the companies' assets to be transferred to [Ms. Prest] in satisfaction of the lump sum order simply by virtue of section 24(1)(a). (emphasis added)

Lord Sumption outlined three reasons for not giving the legislation the same effect as Mr. Justice Moylan did. The first reason is because it is axiomatic that the words in the statute are not read in a way that departs from the general system of law without expressing the intention of the legislation with "irresistible clearness". The second reason is the type of transfer in this case is ordinarily unnecessary to achieve a fair distribution of the assets. The third reason is because there is legislation on the avoidance of transactions intended to prevent or reduce financial relief. This is designed, in certain circumstances, to remedy a situation where a party attempts to frustrate proceedings by disposing of assets.

The third basis is on which the companies can be ordered to convey the properties to Ms. Prest is if the properties may belong beneficially to Mr. Prest. However Mr. Justice Moylan did not feel the need to make any decision on this issue.

In respect of the matrimonial home Lord Sumption concluded that, because the Prest family were not paying rent to Petrodel Resources Limited, this is a clear case of Mr. Prest using the company as a vehicle to hold legal title on the trust for himself. While the other five properties, Lord Sumption observed, were acquired by Petrodel Resources Limited in each case for a nominal consideration of one pound. As no explanation was provided to the Court for the "gratuitous transfer", there was nothing to rebut the presumption of equity that the company was not intended to acquire a beneficial interest in the properties.

The question for Lord Sumption now, was, who did hold the beneficial interest.

Of the seven properties, two of which were acquired in the name of Vermont, Lord Sumption concluded that Mr. Prest is the beneficial owner.

Therefore, in a unanimous verdict, the Supreme Court held that all seven properties should be transferred to Ms. Prest.

Commercial rent must be in line with present market conditions

A High Court ruling in March that will see the rent paid by Bewley’s for its Grafton Street premises fall, could have far-reaching implications for upward only rent reviews in Ireland.

Mr. Justice Peter Charleton said the amount of rent Bewley’s pays Ickendel Limited must fall in line with current market conditions.

Upward only rent reviews, where commercial leases were subject to occasional reviews, and where rent could only rise or remain flat but never fall, have been a contentious issue in recent years with the dramatic decline property prices.

Ickendel, owned by developer Johnny Ronan’s Treasury Holding Group, had taken a case against Bewley’s arguing that it could not reduce rents because its lease agreement only permitted upward only rent reviews.

The High Court had heard that both parties entered into a lease agreement in 1987 with rent reviews every five years since then, and the 2007 review, at the height of the boom, fixed at €1.46 million. Despite this, the same figure was claimed in 2012.

Bewley’s had claimed that the rent review was ambiguous and argued that the lease agreement did have a provision to allow rent to fall as long as it was not below the threshold set in 1987.

Mr. Justice Charleton concurred, saying that:

[t]he parties bargained so as to agree never to fall below that initially agreed rent and I cannot see that they bargained thereafter for anything other than a fair open market rent. That can rise and that can fall.

Mr. Justice Charleton said that it was not in accordance with “business sense” that a rent agreed five years ago “should govern a hospitality market changed for the worse”.

Comment: The objective of section 132(3) of the Land and Conveyancing Law Reform Act 2009  is that any reviewed rent is to reflect the market conditions prevailing at the time of the review. However, this section does not apply where the lease, or an agreement for such a lease, is entered into prior to the commencement of the section. Thus, this section would not have been applicable in the case of Bewley’s. Section 132 came into effect from February 28, 2010 (S.I. 471/2009).  

McCann Fitzgerald PDF    

The function of legislation is one that cannot be delegated by the Oireachtas to any other body

The Supreme Court has ruled that Registered Employment Agreements which set the pay rates for several employment sectors are unconstitutional.

The Supreme Court found that the provisions of Part III of the Industrial Relations Act 1946 unconstitutional, observing that:

there is a wholesale grant, indeed abdication, of lawmaking power to private persons unidentified and unidentifiable at the time of grant to make law in respect of a broad and important area of human activity and subject only to a limited power of veto by a subordinate body ... Nor did the Oireachtas retain any capacity for review either by the Oireachtas or by a member of the Executive responsible to it, of the agreements actually made.

The Supreme Court found that there was no obligation on the Labour Court or the parties to the agreements to consider the interests of the parties who would be bound by the agreements and those who are not parties to the agreements. Moreover, once the agreement is registered it is binding on everyone, and it may only be varied on the application of the original parties.

The Supreme Court found that the Act allowed the parties to an agreement to make any employment related law on the condition that the Labour Court considers such a law to be "substantially representative" of those working in the sector.

Comment: The McGowan ruling mirrors the John Grace Fried Chicken ruling, where the High Court found the Joint Labour Committee wage settings mechanism unconstitutional.

Genetic mother has right to legal recognition on birth certificate

A genetic mother ("CR") has been declared the legal mother of twins born to a surrogate mother in a significant case at the High Court. By arrangement with her sister, "CR" provided ova, fertilised by sperm provided by the husband of the genetic mother, "OR". As a result of that fertilisation, which took place in vitro, the twins, "MR" and "DR" were created.

Mr. Justice Henry Abbott in the High Court ruled that the "CR" was the legal mother and that she was entitled to have her name on the birth certificates. Until now, only the women who gave birth can be registered as the mother.

The couple had sought to challenge the refusal of the State to allow the genetic mother to be listed as the mother on the birth certificates. 

The surrogate, sister of  "CR", did not object to the couple’s application.

Mr. Justice Abbott said the input of the birth mother was to be respected and treated with "care and prudence". But 'the mother is always certain' (maxim mater semper certa est) principle, which the state argued meant the birth mother was always the legal mother, did not survive the enactment of the Constitution, "as it applies to the situation of in-vitro fertilisation".

"To achieve fairness and constitutional and natural justice for both the paternal and maternal genetic parents, the feasible inquiry in relation to maternity ought to be made on a genetic basis and on being proven, the genetic mother should be registered as the mother," Mr. Justice Abbott said.

Mr. Justice Abbott also ruled that the word "mother" in Article 40.3.3 of the Constitution had a meaning "specific to the article itself". This was related to the existence of the unborn only when the foetus was in the womb and not otherwise.

The state argued that Article 40.3.3 had defined motherhood as the birth mother only.

Mr. Justice Abbott noted that positive legislation in Ireland on surrogacy was "totally absent" and so the contract entered into by the couple and the surrogate mother was "not illegal". But he said its performance in the Irish legislative context "would not be enforceable by any court".

View: Guidance Document 2012 (Justice)

NAMA is a public authority for the purpose of EU Regulations on access to information on the environment

Mr. Justice Colm Mac Eochaidh yesterday ruled that the National Asset Management Agency (or “NAMA”) is a public authority for the purposes of the European Communities (Access to Information on the Environment) Regulations 2007.

The ruling by Mr. Justice Mac Eochaidh is considered as having implications for a range of public authorities.

However, the ruling will have no implication for the Freedom of Information Act, which is due to be amended as part of a process that will include the National Asset Management Agency under the legislation.

The Agency claimed that it was not a public authority within the meaning of the 2007 European regulation. But Mr. Justice Mac Eochaidh said this was “absurd”.

Mr. Justice Mac Eochaidh re-affirmed the ruling of Ms. Emily O’Reilly, Commissioner for Environmental Information, who ruled in September 2011 that the Agency is a public authority within the meaning of the regulation.

An application to remit the matter to the commissioner was yesterday dismissed by Mr. Justice Mac Eochaidh.

Ms. O’Reilly issued her ruling in light of a refusal by the National Asset Management Agency to supply information, sought by a journalist in 2010, on the basis that the Agency is not a public authority within the meaning of the 2007 regulations.

An appeal to the Supreme Court is open to the National Asset Management Agency.

ECHR: British Airways' Code Violates Religious Right

A British Airways employee has won a religious discrimination case at the European Court of Human Rights. Nadia Eweida was asked by British Airways to remove a Christian cross from around her neck.

The ruling will mean private companies will have to rethink how their employees and the right of the employees to express their religious beliefs in the workplace.

In 2006 Nadia Eweida was sent home without pay by British Airways for wear a necklace with a small silver cross that British Airways said violated the company dress code. The Court ruled that the request by British Airways “amounted to an interference with her [Nadia Eweida’s] right to manifest her religion.

In July 2012, Prime Minister David Cameron had pledged to introduce legislation allowing individuals to wear religious symbols at work in response to Ms. Eweida’s case.

However, the court dismissed three claims of a similar nature. Shirley Chaplin, Lillian Ladele and Gary McFarlane lost their appeals, arguing that British courts had failed to protect their rights to religious expression. Ms. Chaplin, a nurse, was told by a her employers to remove a crucifix around her next as it could cause injury if a patient pulled  at it.

The Court ruled that the protection of health and safety was “of a greater magnitude that that which applied in respect of Ms. Eweida”.

The Labour Court originally dismissed the case of Ms. Eweida and Ms. Chaplin. The case of Gary McFarlane and Lillian Ladele pit gay rights against the right to religious freedom.

Mr. McFarlane was dismissed from a national counselling service when his employers deemed him unwilling to provide sex advice to homosexual couples. Ms. Ladele refused to officiate at civil partnership for gay couples as part of her duties as a registrar. Both Mr. McFarlane and Ms. Ladele lost.

But the Court, in the case of Ms. Eweida, shared the opinion of the Equality and Human Rights Commission, suggesting that the Courts’ interpretation of the law on the manifestation of religion and religious discrimination was too narrow.

 | EWCA Civ 1025 | EWCA Civ 80 |