IDA acted ultra vires in compulsory land purchase, Supreme Court finds

About this case:

• Judgment:
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The Supreme Court found that the IDA had acted beyond its powers, and that the connection between the IDA chairman and the consultant group recommending the purchase of Thomas Reid’s land could give a reasonable person apprehension of bias.

The case relates to the IDA’s exercising of its statutory power under s.16 of the Industrial Development Act 1986, which allows the IDA to compulsorily purchase land.

The appellant Mr Reid’s property is a protected structure, situated on farmland bordering a Special Area of Conservation.

Although not zoned for industrial development, the land is situated close to the Intel complex in Leixlip, County Kildare, and was identified by the IDA as useful land, although not for immediate use.

Following an attempt to purchase the land voluntarily, the IDA began the compulsory purchase process, in order to create ‘a land bank’

A consultancy group was established, PM, in which the IDA Chairman was a director. The group recommended compulsory purchase, and IDO moved forward with the purchase.

Mr. Reid applied to the High Court for an order of certiorari to quash the decision, but was ruled against by Hedigan J. The current judgment is the result of his appeal.

A five judge panel heard the appeal, including McKechnie J, Denham CJ, O’Donnell J, Laffoy J and Charleton J.

Delivering the judgment, McKechnie J considered whether land could be subject to a compulsory purchase if not required for immediate use.

Citing Blackstone’s Commentaries on the Laws of England (176: Vol. 3: 138), he noted that the “right to own what is one’s own” has been recognised as “a bedrock of the common law,” which has been recognised by the Universal Declaration of Human Rights, the European Convention of Human Rights, the Treaty on the Functioning of the European Union, and the EU Charter.

In such a case, the exercising of compulsory powers against the wishes of a landowner clearly constituted a major interference with those rights. Although the exercising of such power has been upheld by courts, the Court found that certain principles had been established.

Citing Keane J. in Simple Imports Ltd v. Revenue Commissioners, the Court noted that the “courts must always be concerned to ensure that the conditions imposed by the legislature before such powers can be validly exercised are strictly met”.

Noting that the IDA did not have a particular industrial undertaking in mind for Mr Reid’s land, the Court accepted Mr. Reid’s argument that the purchase was entirely so the land would be available to IDA if needed.

The Court found that “it is not suggested that the power to acquire by compulsion lands intended for future use is to be found anywhere other than within s.16 of the 1986 Act.”

In order for such a power to exist, the Court found that there “would have to be an express statutory provision to that effect.” Accordingly, the IDA had acted ultra vires, and the compulsory purchase order should be set aside.

The Court also considered the issue of bias, noting that Mr. Liam O’Mahony had held the position of IDA Chairman, while acting as a non-executive director in the PM Group responsible for the consultancy.

Citing Bula Limited v. Tara Mines Limited (No.6) I.R. 412, the Court found that the test for objective bias was “the reasonable suspicion or the reasonable apprehension test.”

With regards to who constitutes a reasonable person, the Court cited Kenny v. Trinity College (“Kenny”) IESC 42, 2 I.R. 40 which considers the reasonable person as “an independent observer, who is not over sensitive and who has knowledge of the facts.”

In the present case, the Court found that a reasonable person would have a reasonable apprehension that Mr. O’Mahony may exert influence over the PM Group, and thus suspect bias.

Thus, the IDA’s decision to compulsorily acquire Mr. Reid’s land must be set aside.

Speaking obiter, the Court remarked on the desirability that all decisions which will have an impact on constitutional and Convention rights to property should be made by an independent adjudicator.