Glencar Exploration plc and Andaman Resources plc (applicants) v The County Council of the County of Mayo (respondent).

Judicial Review - Applicants seeking damages - Respondent placed a ban on unlawful mining in county development plan - Ban found to be ultra vires - Applicants prospecting in area covered by ban - Misfeasance of public office - Breach of statutory duty - Negligence - Legitimate expectations - Breach of constitutional rights - Quantum - Local Government (Planning and Development) Act 1963 (No 28), section 19 - Local Government Act 1991 (No 11), section 7.

The High Court (before Mr Justice Kelly); judgment delivered 20 August 1998.

The tort of misfeasance of public office is committed where an act is performed by a public official, either maliciously or with actual knowledge that it is committed without jurisdiction and is so done with the known consequences that it would injure the plaintiff.

Section 19 of the 1963 Act as amended creates on the respondent a duty in favour of the general public to devise a plan. A breach of statutory duty owed to the public at large does not give rise to a claim in damages by a particular individual.

There is no direct relationship between the doing of an ultra vires act and the recovery of damages for that act. Only where a negligent act is done in the context of a duty of care being owed by the respondents will a right to damages arise. While common law negligence may be established in the way the respondent made its decision, damages are not recoverable by the applicants as the parties did not have a relationship of proximity.

Where the ingredients required to mount a successful claim for the existence of a legitimate expectation have been made out, damages would not be available for its breach in the absence of a subsisting contractual or equivalent relationship.

The High Court so held in refusing the applicants' claim for damages.

Paul Sreenan SC and Rory Brady SC for the applicants; Michael Forde SC, James O'Reilly SC and John Jordan BL for the respondent.

Mr Justice Kelly said that the applicants were respectively a public company registered in Dublin and a public company registered in Belfast, both of which were involved in prospecting and mining ores and minerals. The applicants' claim for damages arose following the judgment of Mr Justice Blaney, given in these proceedings on 13 November 1992, wherein the inclusion of what came to be called the mining ban in the respondent's county development plan was declared ultra vires the respondent and null and void. The applicants claimed damages under the headings of misfeasance of public office, breach of statutory duty, negligence, breach of legitimate expectation and wrongful interference with the applicants' constitutional rights.

Between 30 May 1986, on which date the applicants were given ten prospecting licences by the Minister for Energy for the purposes of exploring for gold in townlands south of Westport, County Mayo, and 17 February 1992 the applicants claimed to have spent £1,938,264 on such exploration. The applicants formed the view that commercial quantities of gold existed in the areas prospected and therefore entered into a joint venture agreement in November 1991 with a company called Newcrest Mining Limited in order to secure the investment necessary for further exploration. However, in February 1992 Newcrest pulled out of the joint venture because, it was claimed, of the mining ban included in the respondent's county development plan.

The purported ban was inserted into the respondent's proposed 1990 development plan which was intended to replace the 1984 development plan which contained no such provision. Under the headings "Policy" and "Mineral Extraction" the new plan stated: "It is the policy of the Council that no development and/or work shall take place in relation to minerals (as defined in the Minerals Act 1940 as amended) in the areas shown dotted on Map 10A." This area covered approximately three hundred square miles.

The mining ban came into force as an operative part of the development plan after a vote taken at a meeting of the respondent on 17 February 1992 despite written objections from the applicants and also the written objection of the Minister for Energy. These proceedings commenced on 12 May 1992 and judgment was given by Mr Justice Blaney on 13 November 1992 when he held that the mining ban was ultra vires the respondent because it was entirely negative in character and therefore could not properly be regarded as a planning objective. He was further of the view that by including the ban the respondent was purporting to prohibit exempted development or alternatively decide what is or is not exempted development, which it had no power to do. He also found that the respondent had failed in its obligation to have regard to the policy of the Government by totally disregarding the letter of the minister to it. On the basis of these findings the applicants claimed damages.

Mr Justice Kelly said that there was no direct relationship between the power of the High Court to quash a decision of an inferior tribunal or body and a liability being visited on the respondent in such a situation to pay damages and he referred to the Supreme Court decision in Pine Valley Developments Limited v The Minister for the Environment, Ireland and the Attorney General [1987] ILRM 747.

It was accepted that the topic of mining in County Mayo was a heated one giving rise to much public concern and the evidence of two members of the respondent council, Mr Hughes and Mr Kenny, was consistent with that. The members of the respondent council were anxious to ensure that any decision in relation to mining should be made by it and with that in mind Mr Hughes first proposed the mining ban on 25 February 1991. The area to be covered became known as map 10A, covering three hundred square miles, and this map was prepared on the direction of the councillors. The mining ban covering this area became part of the draft plan in March 1991. Prior to formal ratification of the plan, which was to take place on 16 December 1991, the council received a letter from the minister objecting to the inclusion of the ban and the respondent was advised by the county manager that it would have to have regard to this letter. Following this advice the meeting was adjourned to allow the minister's views to be considered. Finally a motion put down to rescind the resolution approving the development plan was defeated by 22 votes to 8 at a meeting of the respondent on 17 February 1992.

Mr Justice Kelly said that all the evidence pointed to the conclusion that the ban had been imposed by the elected members of the respondent against the advice of the county manager, the senior executive planner, the county engineer, the county solicitor and the Minister for Energy. The county manager advised that the ban would bring an end to prospecting. He advised the respondent that this was a form of enterprise which was in the respondent's interests to encourage. Senior officials in the planning and engineering departments gave similar advice and expressed concern at the size of the area to be covered by the ban.

The legal advice furnished to the respondent by Mr Michael Brown, solicitor, also expressed reservations about the legality of the resolution amending the development plan to include the mining ban. Further advice was obtained from senior counsel who advised that the respondent would be entitled to prohibit mining activities which conflicted with natural resources provided the proposed prohibition was made by reference to objective criteria. However, he was never furnished with a map of the area to be covered, which would have shown that the respondent had merely adopted a crude exclusionary policy unrelated to the effect of mining activity on high amenity locations. In the event the respondent seemed to regard his advice, wrongly, as being to the effect that they had the power to adopt the proposed ban.

Mr Justice Kelly also concurred with the view taken by Mr Justice Blayney that government policy had been disregarded in view of the attitude the respondent took to the letter it received from the minister strongly objecting to the proposed development plan.

The applicants contended that the effect of the ban was to destroy the confidence of their joint venture partner Newcrest in the project which could not be restored by the applicants' ultimately successful challenge to the legality of the ban. Newcrest indicated by letter on 21 February 1992 that its activities under the joint venture agreement were to be suspended and finally refused to proceed with the operation of the agreement on 22 January 1993, despite Mr Justice Blayney's judgment on 13 November 1992. Mr Justice Kelly said that he was satisfied that Newcrest lost confidence in the project as a result of the ban and further, the ban created an environment where the applicants could not successfully persuade another investor to become involved which led ultimately to the demise of the project, a fall in the share price of Glencar and the gradual surrender by the applicants of their licences. The applicants claimed that these findings entitled them to recover the amount they expended on exploration prior to the imposition of the ban. Mr Justice Kelly referred to the judgment of Mr Justice Keane in the Supreme Court case of McDonnell v Ireland (unreported, 23 July 1997) and said that the tort of misfeasance of public office is committed where an act is performed by a public official, either maliciously or with actual knowledge that it is committed without jurisdiction and is so done with the known consequences that it would injure the plaintiff. The applicants' claim for damages under this head must fail as the evidence did not establish a dishonest or wrongful abuse of power by the elected members of the respondent.

The applicants also claimed damages for breach of statutory duty. Section 19 of the Local Government (Planning and Development) Act 1963 imposes a duty, in favour of the general public, on a local authority to devise a development plan but this duty is not one intended to be enforceable by an individual in a claim for damages. Similarly the applicants cannot ground a claim for damages for breach of statutory duty under section 7 of the Local Government Act 1991 which requires a local authority to have regard to the policies and objectives of the Government or any minister of the Government.

Mr Justice Kelly reiterated, in relation to the applicants' claim for damages for common law negligence, that there is no direct relationship between the doing of an ultra vires act and the recovery of damages for that act and again referred to the Supreme Court decision in Pine Valley where the then Chief Justice Mr Justice Finlay referred to the fact that the common good can be served by giving an immunity to persons vested with statutory powers from claims for compensation where they act bona fide and without negligence. The evidence in this case established that the mining ban was in fact imposed negligently as no reasonable local authority would have made the same decision having received the advice the respondent received. However, damages only arise in the context of a duty of care. Mr Justice McCarthy in the Supreme Court case of Ward v McMaster [1988] IR 337 had said that the existence of such a duty could be established by reference to "the proximity of the parties, the forseeability of the damage and the absence of any compelling exemption based on public policy." The statutory powers in the present case were directed for the benefit of the public at large and it could not be said that the relationship between the parties was such as to give rise to a proximity in the legal sense which would result in an entitlement to damages. When the mining ban was imposed the applicants had not even applied for planning permission and there was no guarantee that they would ever do so.

The applicants also claimed damages for the frustration of their legitimate expectation that the respondent would act lawfully having proper regard to all advice tendered to it. Mr Justice Kelly referred to the High Court case of Tara Prospecting Limited and Another v The Minister for Energy, Ireland and the Attorney General [1993] ILRM 771 and said that there was no evidence of any promise, express or implied, made by the respondent to the applicants and there could be no legal basis for holding that the applicants had a legitimate expectation that planning permission would be granted. Even in the absence of the ban great difficulties would have to be surmounted to acquire planning permission. The only legitimate expectation which the applicants might have had was to a fair hearing of any planning application they might make but the applicants were not even close to making a decision on the commercial feasibility of making such an application. Further, in order to be awarded damages for a breach of a legitimate expectation, had such an expectation been established, a contractual or equivalent relationship would have to be established which was absent here.

In relation to the applicants' claim for damages for breach of constitutional rights Mr Justice Kelly said that the only property rights of relevance were the licences to prospect. To successfully and legitimately start mining a huge amount of additional work would have to be done, a mining licence would have to be acquired and planning permission would also have to be obtained. In these circumstances there was little value in the prospecting licences themselves until the substantial additional work was undertaken to make them of actual commercial value and therefore the applicants claim for damages for breach of constitutional rights must fail. Mr Justice Kelly, in dismissing the applicants' claim, observed finally that even if the applicants were entitled to damages regard would have to be had to the speculative and inherently risky nature of the industry and therefore the applicants would not be entitled to succeed in a claim for the entire sum expended on exploration up to the date of the ban. The most they could hope to obtain would be one tenth of the amount expended if damages were assessed as of the date of the ban. However, this figure would be reduced to one twentieth if the date of trial was a more appropriate date for assessment as the prospect of getting planning permission was further diminished by the European Union Habitat Directive.

Solicitors: Hussey and O'Higgins (Dublin) for the applicants; Garvey, Smith and Flanagan (Castlebar) for the respondent.