High Court of Ireland Decisions

1. By Order of the High Court (Smyth J.) dated the 12th day of May, 1997, the Applicant was granted liberty to seek relief by way of Judicial Review against the Respondents including:-

2. The Applicant, Mr. Simon O'Leary was called to the Irish Bar in 1965 and practised as a barrister on the Eastern and Dublin Circuits of the Bar for some eight years before taking senior appointments in the Office of the Attorney General (in 1973) and subsequently in the Office of the Director of Public Prosecutions (in 1977).

3. Pursuant to the provisions of Section 3 of the Law Reform Commission Act, 1975 (hereinafter referred to as the 1975 Act), Mr. O'Leary was appointed a Commissioner of the Law Reform Commission by the Second named Respondent (hereinafter referred to as the Government) for a term of 5 years with effect from the 2nd day of January, 1987 on secondment from his position in the Office of the D.P.P. and thereafter he was re-appointed for a further term of 5 years with effect from the 2nd January, 1992 on secondment from the same position.

4. The First named Respondent (the Minister for Finance) is a member of the Government and pursuant to the provisions of the Civil Service Regulation Act (No. 46 of 1956) [hereinafter referred to as the 1956 Act] , he is the person who is, inter alia, responsible for the fixing of (1) the terms and conditions of service of Civil Servants and (2) the conditions governing the promotion of Civil Servants and he is empowered for that purpose to make "such arrangements as he thinks fit and may cancel or vary such arrangements" (see Section 17(2) of the 1956 Act).

5. Mr. O'Leary claims as follows:-

6. The Respondents contend as follows:-

7. Secretary) would be maintained and preserved upon subsequent reviews and increases of their respective salaries and the Government never agreed to such terms and the First named Respondents never entered into any "arrangement" with Mr. O'Leary that he did not and could not have a legitimate expectation that his salary would be paid and maintained on such terms and at such rates.

8. In November of 1986, Mr. O'Leary, who was then Senior Legal Assistant in the office of the D.P.P. was contacted by the then Attorney General, John Rogers, S.C. who, acting on behalf of the Government offered to appoint Mr. O'Leary as a Commissioner of the Law Reform Commission with effect from the 2nd day of January, 1987.

9. In response, Mr. O'Leary advised Mr. Rogers that he would accept the appointment provided that the appointment was deemed to be and seen to be a clear promotion in the Civil Service from Mr. O'Leary's position as a Senior Legal Assistant in the office of the D.P.P. and that Mr. O'Leary would be remunerated at the level of Secretary. Subsequently, Mr. Rogers advised Mr. O'Leary that the Government was not agreeable to his promotion on the terms which he had sought and in consequence Mr. O'Leary declined the appointment which had been offered to him.

10. In early December of 1986, Mr. O'Leary was contacted by Mr. James Hamilton, a Senior Official in the office of the Attorney General who had been instructed by Mr. Rogers to discuss with Mr. O'Leary the terms upon which he would be prepared to accept an appointment to the Law Reform Commission.

11. Mr. Hamilton clearly recalls and has testified on Affidavit to the intent that Mr. O'Leary:-

12. Although Mr. Hamilton was careful to point out that he was testifying to events which had occurred more than ten years earlier, his recollection is broadly consistent with that of Mr. O'Leary in relation to their discussions.

13. The reduction to writing of the ".... terms upon which the Applicant would be prepared to accept appointment...." comprises a Memorandum (hereinafter referred to as the 1986 Memorandum) prepared by Mr. Hamilton and expressly approved by Mr. O'Leary. It provided as follows:-

14. By letter dated the 23rd December, 1986 from the then Attorney General the Government approved Mr. O'Leary's appointment as a full-time member of the Law Reform Commission with effect from the 2nd January, 1987 as follows:-

15. The letter confirming Mr. O'Leary's appointment was accompanied by the 1986 Memorandum and by the document which was described in the letter of appointment as ".... the Department of the Public Service minute of the 18th December, 1986...." (hereinafter referred to as the 1986 Minute) which was headed on note-paper from the Department of the Public Service and provided as follows:-

16. Mr. O'Leary duly took up his appointment with effect from the 2nd day of January, 1987 and in 1989 the Review Group recommended that the salary of a Judge of the High Court should be upgraded from that of a Secretary in the Civil Service and the recommendations of the Review Group were implemented with effect from the 1st day of July, 1989, from which date no connection existed between the rate of remuneration paid to the President of the Law Reform Commission and the rate paid to the Secretary (General Service) in the Civil Service.

17. By letter dated the 2nd April, 1990, Mr. O'Leary wrote to Mr. Colm Gallagher (the author of the 1986 Minute) reminding him that ".... it was agreed and recorded that in the event of a High Court Judge's salary being "upgraded" above as Secretary, the situation would be reviewed.... I request that I now be paid as a Secretary and that this should apply retrospectively....".

18. He spoke to Mr. Gallagher on a number of additional occasions and repeated his request suggesting that he send further reminders but Mr. Gallagher indicated that it would not be "politic" to do so but since there was no response, Mr. O'Leary felt obliged to write again to Mr. Gallagher by letter dated the 20th February, 1991 calling upon the Government to ".... do the honourable thing and follow through....." but again he had no response.

19. Mr. O'Leary was re-appointed as a member of the Law Reform Commission by letter dated the 9th January, 1992 from the then Attorney General, Mr. Harold A. Whelehan, S.C. "... for a period expiring on the 1st January, 1997, on the same terms as applied during your recently expired period as a member of the Commission".

20. Mr. O'Leary replied by letter dated the 21st January, 1992 accepting the appointment and enclosing a copy of the letter which he had sent to Mr. Gallagher in April 1990 indicating that ".. the letter speaks for itself..." and pointing out that he had not received a reply despite reminders. He concluded the letter as follows:-

21. He did not receive a reply to his letter.

22. On the 9th February, 1995, Mr. O'Leary wrote to the then Attorney General, Mr. Dermot Gleeson, S.C., and repeated what he had stated earlier in his letters to Mr. Gallagher and to Mr. Whelehan explaining that "... at the outset I must say that there is not much involved. If there were, I would have been writing to you and your predecessors every month. I have also written several times to the Department of Finance without reply. My case appears to be sandwiched somewhere between the doctrine of doing that which ought to have been done and the de minimus rule."

23. He enclosed a copy of the 1986 Memorandum. By letter dated the 22nd May, 1995, Mr. Gleeson replied enclosing a copy of a letter dated the 18th May, 1995 from the then Minister for Finance, Mr. Ruairi Quinn, T.D., to Mr. Gleeson in which Mr. Quinn rejected Mr. O'Leary's contention that he was entitled to a rate of remuneration equivalent to that of Secretary and stating that he had some recollection of "... the background to this case" indicating that the ".... approach was... influenced by the fact that the duties of a member of the Commission, however professionally challenging, did not have the range, managerial responsibilities or accountability of the Secretary of the even smallest department."

24. Mr. O'Leary replied by letter dated the 23rd May, 1995 to Mr. Gleeson in which he fundamentally disagreed with Mr. Quinn's recollection and contention.

25. Mr. O'Leary's appointment as Commissioner to the Law Reform Commission expired on the 1st March, 1997 (he accepted an additional two months appointment to assist the Commission) and subsequently he had discussions with Mr. Colm Gallagher as to the terms of his return to the Civil Service and it was indicated to him that the then Minister for Finance took the view that upon Mr. O'Leary's return to the office of the D.P.P., his remuneration should revert to the level appropriate to Deputy Secretary. An alternative proposal was put to Mr. O'Leary involving work in the office of the Revenue Commissioners. This proposal contemplated Mr. O'Leary retaining his existing rate of remuneration which would be frozen at its rate in February of 1997 until such time as the rate of remuneration applicable to a Deputy Secretary in the Civil Service ".... caught up with" Mr. O'Leary's (frozen) rate of remuneration whereupon Mr. O'Leary would revert to the rate of remuneration payable to a Deputy Secretary. This proposal was one of two "options" offered to Mr. O'Leary by letter of Mr. Colm Gallagher dated the 20th February, 1997 in reply to which Mr. O'Leary on the 24th February, 1997 wrote to Mr. John Hurley, the then Secretary of the Personnel and Remuneration Division in the Department of Finance, referring to the 1986 Memorandum and his understanding of the terms and conditions of his appointment to the Law Reform Commission and thereafter and indicating that he had a legitimate expectations arising "... inter alia, from those terms of agreement, the longevity of my service as a Commissioner and from subsequent correspondence".

26. He explained that he had no alternative but to exercise the option of returning to the office of the D.P.P. but expressly stated that his return was without prejudice to his claim that he was entitled to be remunerated at the rate applicable to a Secretary. In his letter Mr. O'Leary indicated that if his claim (or a compromise) could not be met (or achieved) he would institute proceedings and he instituted the proceedings herein shortly after receipt of a letter from Mr. Hurley dated the 28th February, 1997 in which his claim was rejected.

27. When Mr. O'Leary resumed his position as Senior Legal Assistant in the office of the D.P.P. at a salary of £62,732 per annum, the salary then payable to a Secretary was £78,350 per annum. Mr. O'Leary's rate of remuneration as a Commissioner of the Law Reform Commission at the date of the termination of his appointment was £76,507 per annum.

28. Mr. O'Leary has averred to the presence within the Civil Service of "an established precedent... that after long service in a position one always held one's salary on a personal basis".

29. He went on to instance Ambassadors who had served in "Grade A posts" who retained their salaries when reverting to "Grade B posts" and he expressly referred to persons appointed as "Secretary or to a post equivalent to that of Secretary and who were following the termination of their term as Secretary or in such equivalent post, if not appointed Secretary to another Department, entitled to retain the salary payable to them while Secretary or in any such similar post elsewhere in the Civil Service" and he went on to refer to individual cases.

30. In an Affidavit sworn on the 8th day of July, 1997, Mr. Colm Gallagher rejected Mr. O'Leary's contention and referred to the facts that "no such 'established precedent' even exists or existed as contended for.... I am personally aware, having worked in the areas of the Civil Service dealing with staffing matters since 1969 of no such long established precedent. Indeed, I am aware of long and well-established arrangements to the contrary.... In the case of Secretaries appointed for seven year terms, specific arrangements which do not involve automatic retention of salary, and which involve a reduction in the normal potential length of service form part of the offer of appointment made to them from the outset".

31. However, contrary to Mr. Gallagher's averment, it is clear from perusal of a document marked "secret" dated the 5th March, 1987 and headed "Department of the Taoiseach" that there was a specific Government decision on the 5th March, 1987 which made special arrangements for Secretaries of Departments who were appointed for terms of not more than seven years and who had served out their term of office. In general, those arrangements ensured that such persons were not disadvantaged financially by reason of having completed their terms of office.

32. In addition, Mr. Gallagher averred to "... a long established practice that Civil Servants seconded to the Public Service.... do not on their return to the Civil Service retain any additional emoluments which they acquired in the context of their non-Civil Service appointments" but did not identify any specific cases and, in dealing with Mr. O'Leary's reference to certain Secretaries of Departments and certain categories of Ambassador, he stated that these references were "... inappropriate... since the persons in question remained at all times holders of posts within the Civil Service".

33. Section 17 of the 1956 Act provides as follows:-

34. Sub-sections (12) and (13) of Section 3 of the 1975 are not relevant to these proceedings.

35. The following issues fall to be determined in these proceedings:-

36. Central to the consideration of the above issues are the 1986 Memorandum and the 1986 Minute.

37. It is of importance to recall that those two documents were prepared subsequent to and arising out of discussions between Mr. O'Leary and Mr. James Hamilton.

38. It was an important time in Mr. O'Leary's professional life. He had been offered a senior position as a Law Reform Commissioner by the Attorney General of the State and had refused that offer because the Attorney could not meet Mr. O'Leary's requirements that (a) his appointment was to be treated as a promotion with the Civil Service and (b) that he would be remunerated at the rate applicable to the position of Secretary.

39. Having refused that appointment, he was approached a second time on behalf of the Attorney General by Mr. Hamilton who has testified on Affidavit that "... I was instructed by the Attorney General.... to discuss with the Applicant the terms upon which he would be prepared to accept the appointment to the Law Reform Commission" and that ".... I had clear instructions from the Attorney General to indicate to the Applicant as I did on a number of occasions that there would not be agreement to pay to him a salary fixed at that of a Secretary/High Court Judge. Over a short period of time it proved possible to reduce to writing the terms upon which the Applicant would be prepared to accept appointment to the position....".

40. Clearly, the discussions between Mr. Hamilton and Mr. O'Leary were of greater importance to Mr. O'Leary than to Mr. Hamilton who has also quite properly and fairly pointed out in his Affidavit that the matters to which he was referring took place more than ten years prior to the date of his averments but it is clear from Mr. Hamilton's testimony on Affidavit that:-

41. Mr. Hamilton's testimony as outlined above is wholly consistent with the testimony adduced on Affidavit by Mr. O'Leary and with the 1986 Memorandum.

42. Paragraph (1) of the 1986 Memorandum provides in the clearest possible terms that Mr. O'Leary considered that an appropriate salary "... for someone in his circumstances...." was that of a "Secretary/High Court Judge". The paragraph was careful however to explain that Mr. O'Leary had been told that "... because of the desire to maintain a differential between the President (who is a High Court Judge) and other Commissioners, this is not on offer...".

43. Accordingly, the reason advanced by the Respondents as to why Mr. O'Leary was not to be paid at the rate equivalent to that of a "Secretary/High Court Judge" was "...because of the desire to maintain the differential between the President (who is a High Court Judge) and other Commissioner...".

44. Mr. O'Leary and Mr. Hamilton jointly went on to explain in the 1986 Memorandum that there was also "... a need to maintain the clearest possible differential between a Commissioner..." (the position to which Mr. O'Leary was to be "promoted") and "... the Senior Law Research post...." (a position equivalent to that which Mr. O'Leary was leaving) so that, he was prepared to accept a salary "....between the two or closer to the Secretary's figure...." and the Memorandum provides for a differential of £500 between the salary payable to Mr. O'Leary and that which was then payable to a "...Secretary/High Court Judge...".

45. Paragraph (3) of the 1986 memorandum restates the "...need to maintain a differential between the President and an ordinary Commissioner..." and states that "...in the event of a High Court Judge's salary being upgraded above Secretary level the situation would be reviewed...".

46. The "terms and conditions" of Mr. O'Leary's appointment were declared by the then Attorney General, Mr. Rogers in his letter of appointment dated 23rd December, 1986 to be those "...as set out..." in the 1986 Minute.

47. Perusal of the 1986 Minute discloses:-

48. For practical purposes, I am satisfied on the evidence that when Mr. O'Leary took up his appointment on 1st January, 1987 the (then) Minister for Public Service and the Government (through the agency of the Attorney General) had agreed with Mr. O'Leary as follows:-

49. A critical term agreed between the parties related to Mr. O'Leary's promotion within the Civil Service. This term was of such importance to Mr. O'Leary that he found himself compelled to refuse the offer of the senior appointment made to him personally by the then Attorney General.

50. When Mr. Hamilton was instructed by the then Attorney General to discuss with Mr. O'Leary "...the terms upon which he would be prepared to accept an appointment..." he found that Mr. O'Leary "...had a very particular request that his appointment be seen to be a promotion and not a side-ways move...". This was the first term referred to by Mr. Hamilton in his affidavit and was clearly a term upon which Mr. O'Leary was insisting. He made it clear and it was expressly stated within the 1986 Memorandum that he was not prepared to accept "....a side-ways move.." within the Civil Service. He emphasised that point in unequivocal terms (a) to Mr. Rogers, (b) to Mr. Hamilton, and (c) to the Minister for the Public Service (who read and understood the 1986 Memorandum) and his appointment was formally and expressly sanctioned on that understanding.

51. Since there is no formal category or grade of Civil Servant between the level of Deputy-Secretary and Secretary (General Service), Mr. O'Leary's promotion could only be reflected in his rate of remuneration. This was agreed at a level which was £500 less than the level appropriate for "Secretary/High Court Judge" with a provision for "review" dependent upon the recommendations of the Review Group.

52. It has been suggested that the Minister's understanding (and possibly that of the Government) as to what was agreed was different from that of Mr. O'Leary, I do not accept that such is the case. In his letter to Mr. Gleeson, the (then) Minister for the Public Service acknowledged that at the time "....Mr. O'Leary was, as he states, anxious to make some visible gain from his appointment and the figure of £500 below the then salary of a Departmental Secretary was settled upon and sanctioned by me....".

53. However, Mr. O'Leary had gone further than what was suggested by the Minister in that letter. He expressly required that his appointment would be seen to be a "promotion" and not a "side-ways" move within the Civil Service and his appointment was expressly sanctioned on that understanding so that I find it difficult to accept the contention that in fact Mr. O'Leary's appointment was not a "promotion" and was in fact a "side-ways move" which was likely to place Mr. O'Leary at a significant disadvantage in his professional life at a future date.

54. It may well be that the then Minister's recollection of the events of December of 1986 was not clear when he wrote to Mr. Gleeson on 18th May, 1995 particularly since what is stated in paragraph 3 of that letter is quite inconsistent with the documentary and other evidence adduced at the hearing.

55. As I indicated earlier the discussions which took place between Mr. Hamilton and Mr. O'Leary in December of 1986 were of greater importance to Mr. O'Leary than to Mr. Hamilton for the reasons which I have outlined earlier. This is borne out by the fact that throughout the following nine years Mr. O'Leary regularly and consistently wrote to both Respondents referring to the agreement which he had reached and asking for implementation.

56. He did not receive a response until 22nd May, 1995 when he was sent a copy of the letter from the (then) Minister for the Public Service to Mr. Gleeson dated 18th May, 1995. As I have already indicated the Minister was at that time seeking to recollect events which had occurred nine years previously and at least some of his recollection may not have been accurate and I have the clear impression that he cannot be of assistance in relation to the detail which is of some importance to the determination of the issues in this case. I have, however, no reservations about Mr. O'Leary's recollection of events having regard to their importance for him and to the fact that he wrote regularly and consistently to the Respondents reminding them of what had been agreed.

57. The First named Respondent is empowered pursuant to Section 17 of the 1956 Act to fix the terms and conditions of service of Civil Servants and to fix the conditions governing the promotion of Civil Servants. This statutory power is exercisable by way of an administrative act appointing Civil Servants who thus become holders of an office to which they are appointed by a Minister.

58. Although no evidence was adduced at the hearing to that intent, I am assuming that Mr. O'Leary was first appointed as a Civil Servant to the office of the Attorney General in 1973 (and subsequently to the office of the D.P.P. in 1977) by the First named Respondent in the exercise of his statutory power pursuant to Section 17 of the 1956 Act. Accordingly in 1986 Mr. O'Leary was the holder of an office to which he had been appointed by a Minister and the responsibility for fixing the terms and conditions applicable to his office rested by Statute upon the First named Respondent.

59. Section 17(2) of the 1956 Act empowers the First named Respondent to "...for the purposes of subsection (1) of this Section, make such arrangements as he thinks fit and may cancel or vary such arrangements...".

60. That subsection has been construed as conferring upon the First named Respondent the power to enter into contractual arrangements - see McMahon -v- The Minister for Finance , Kenny J., unreported 13th May, 1963 and Patrick Gilheaney -v- The Revenue Commissioners, Costello J. (as he then was), unreported 4th October, 1995.

61. However, the First named Respondent is confined by Statute as to the nature and character of any contract into which he may enter with a serving Civil Servant whose original appointment was not contractual in nature but was made (as was Mr. O'Leary's) by the exercise of a statutory power.

62. Since the purposes of subsection (1) of Section 17 of the 1956 Act include the fixing of "....the conditions governing the promotion of Civil Servants...." (see subsection (1)(b)(ii) thereof and since the First named Respondent is empowered to "...make such arrangements as he thinks fit..." in respect of those purposes (see Section 17(2) of the 1956 Act) there is no statutory bar upon the entry by the First named Respondent into contractual relations with serving Civil Servants whose original appointment has been by the exercise of a statutory power. Indeed the subsection concerned appears to contemplate such contractual relations in the form of "arrangements" for the "promotion of Civil Servants".

63. The nature and extent of such a contract, however, is restricted since the power conferred upon the First named Respondent to "...cancel or vary such arrangements.." (which is discretionary) cannot be fettered by contract.

64. The existence of such a contract will in each case depend upon the evidence as to whether or not parties intended to contract with one another and in the instant case will depend upon whether or not evidence has been adduced at the hearing which establishes that the Respondents and Mr. O'Leary intended to contract with one another or make an "arrangement", which was intended to have the effect of "....governing the promotion.." of Mr. O'Leary in his capacity as a Civil Servant.

65. I am quite satisfied on the evidence and in particular having regard to (a) the discussions between Mr. Rogers and Mr. O'Leary, (b) the discussions between Mr. Hamilton and Mr. O'Leary, (c) the 1986 Memorandum and (d) the 1986 Minute, that it was the clear intention of the parties to these proceedings to enter into contractual relations governing Mr. O'Leary's promotion in 1986 and I am satisfied that they did so.

66. I am further satisfied that the First named Respondent retained the power vested in him by Section 17(2) of the 1956 Act to "cancel or vary" the contract into which he had entered with Mr. O'Leary and I will deal with the appropriate exercise of that power, in so far as it affects the parties to the contract under review later in this judgment.

67. In summary, I am satisfied on the evidence that the Respondents jointly and severally entered into a contract with Mr. O'Leary and agreed to Mr. O'Leary's promotion within the Civil Service to a position which was unique within the Civil Service in that it was to rank significantly above the rank of Deputy Secretary and slightly below the rank of Secretary (General Service) and was to be identified by the fact that it would be remunerated at a rate which on 1st January, 1987 was £500 less than the rate applicable to a Secretary (General Service) within the Civil Service.

68. I am satisfied on the evidence that the Respondents agreed to Mr. O'Leary's promotion and the First named Respondent exercised the powers conferred upon him by Section 17(2) of the 1956 Act and made an arrangement with Mr. O'Leary fixing the conditions governing Mr. O'Leary's promotion in order to facilitate the appointment of Mr. O'Leary as a Commissioner of the Law Reform Commission by the Government pursuant to the provisions of Section 3 of the 1975 Act and in accordance with the expressed wishes of the Government at that time.

69. The determination of issue 3 above requires the consideration of the evidence as to the events and discussions which occurred in December of 1986 relative to the appointment of Mr. O'Leary as a Commissioner of the Law Reform Commission which I have already considered in detail above.

70. The determination of this issue also requires the consideration of the practice within the Civil Service and the "legitimate expectations" of certain senior Civil Servants having regard to the nature, extent and circumstances of their appointment.

71. In so far as issue No. 3 is concerned, I have already found that the Respondents entered into an agreement with Mr. O'Leary in the specific terms which I have outlined above.

72. It has been argued on behalf of the Respondents that the so called doctrine of "legitimate expectation" cannot have any application to Mr. O'Leary's appointment having regard to the decision of Costello J. (as he then was) in the case of Patrick Gilheaney -v- The Revenue Commissioners , unreported 4th October, 1995.

73. In that case Mr. Gilheaney was Executive Officer in the Office of the Revenue Commissioners who applied for promotion as Press Officer in the same office which in turn had the grade of Higher Executive Officer. He was not immediately successful but was placed on a panel for future promotion but before that could happen, a decision was taken to fill the vacancy by means of a transfer of a Higher Executive Officer and not by means of the promotion of an Executive Officer. He claimed that this decision was invalid because, inter alia, the decision to make the appointment otherwise than from the panel established by the Revenue Commissioners breached the legitimate expectation which he held that that appointment would be made from the panel.

74. In rejecting his claim, Costello J. referred with approval to the views which he had himself expressed in the case of Tara Properties Limited -v- The Minister for Energy , 1993 I.L.R.M. 771 stating, inter alia:-

75. However earlier in " Gilheaney" at p.27, Costello J. expressly held that;-

76. In the light of the foregoing it would appear:-

77. Nonetheless an expectation, albeit heavily conditional, can arise out of the exercise of such a power provided the benefit conferred is not one which will "later be refused by the Minister in the public interest".

78. It is also clear that when a statutory power to confer a benefit is exercised by a Minister it also confers a corresponding right upon the beneficiary to receive the benefit and that such a right will be enforced by the Courts "... until such time as the right is cancelled or varied by the valid exercise of the power in that behalf contained in Section 17...." (of the 1956 Act); and

79. The so called "doctrine of legitimate expectation" has been considered and reviewed in a most helpful fashion by McCracken J. in Abrahamson -v- The Law Society of Ireland (1996) 1 I.R. 409.

80. Dealing with the development of the doctrine, he pointed out (at p.418) that:-

81. Although observing that he found some of the decisions which have influenced the development of the doctrine of legitimate expectation "....very difficult to reconcile....", McCracken J. held that the foregoing statement of the law "...seems to me to accord with fundamental equitable principles...." (see page 418).

82. I have found that the Respondents jointly and severally entered into a contract with Mr. O'Leary.

83. I have also found that the First named Respondent retained the power vested in him by Section 17(2) of the 1956 Act to "cancel or vary" that contract and I am further satisfied that the contract comes within the narrow band of contracts referred to by Costello J. (as he then was) in " Gilheaney" as contracts entered into which are made subject to the ministerial power of variation or cancellation on the basis of an understanding that generally it is not in the interest of the public service that the statutory power would be exercised.

84. The First named Respondent has exercised a statutory power to confer a benefit upon Mr. O'Leary (by way of an administrative act intended to fix the terms and conditions relating to Mr. O'Leary's promotion).

85. As I have already indicated, such an exercise of statutory power conferred upon Mr. O'Leary a corresponding right to receive that benefit and that right will be enforced by the Courts "...until such time as the right is cancelled or varied by the valid exercise of the power in that behalf contained in Section 17..." (see Gilheaney at p.28).

86. As I have already indicated herein a legitimate expectation can arise out of the exercise of a discretionary statutory power provided that the benefit conferred is not one which will "later be refused by the Minister in the public interest".

87. Since I have found that the contract between the First named Respondent and Mr. O'Leary is one of that category of contract which is entered into on the basis of an understanding that generally it is not in the interest of the public service that the statutory power would be exercised and since it also probably comprised an "arrangement" entered into "...which the parties regard as binding on them in the interests of the public service and act accordingly..." (see Gilheaney at p.28). I do not believe that the First named Respondent can "...in the public interest" refuse Mr. O'Leary the benefit which he has conferred upon him and which arises out of the "arrangement" which he has made with Mr. O'Leary and the contract into which he has entered with him and the statutory power which he has exercised.

88. Accordingly, I am satisfied that Mr. O'Leary has a legitimate expectation that he will receive the benefits of the contract into which he entered with the First named Respondent and that the latter is estopped from denying Mr. O'Leary the benefits arising from that contract or "arrangement" (and the exercise of the statutory power by the First named Respondent).

89. I make no finding as to whether or not the First named Respondent has in fact exercised his statutory power to cancel or vary the terms of the benefit which was conferred upon Mr. O'Leary. If he has not done so, then contractual rights against the First named Respondent may also be vested in Mr. O'Leary but in my judgment it matters little because I see no reason why contractual rights should not co-exist with rights arising out of the doctrine of "legitimate expectation" or the equitable concept of promissory estoppel.

90. It follows from my earlier finding that Mr. O'Leary acquired contractual rights against the Government because I can find nothing within the 1975 Act or elsewhere restricting the power of the Government to enter into binding contracts with individuals which may arise from the exercise by the Government of statutory powers. Whether such contracts are properly enforceable against the State or the Government which is in power at the date of litigation is a question which was not raised at the trial and is a matter upon which I am prepared to hear argument from Counsel if that is necessary.

91. I express no particular view on the presence or absence within the Civil Service of "an established precedent...that after long service in a position one always held one's salary on a personal basis".

92. Since I have identified Mr. O'Leary's legitimate expectation arising out of his relationship with the Respondents it is unnecessary for me to determine issue No.(3)(c) above.

93. In so far as issue No.(4) is concerned I think it is of significance that in his Order dated 12th May, 1997, Smyth J. gave Mr. O'Leary "...leave to apply by way of Application for Judicial Review for the reliefs set out at paragraph D(1-10)....in the Statement..." grounding his application. He declined to give Mr. O'Leary liberty to seek the reliefs sought at paragraph 11 and 12 in the same Statement, that is to say, "damages" and "interest pursuant to Statute" and I respectfully agree with his decision.

94. I have found herein that the Respondents jointly and severally entered into a contract with Mr. O'Leary and that he has a legitimate expectation that he will receive the benefits arising out of that contract.

95. It is not my function in the proceedings herein to determine (a) whether or not there have been breaches of that contract by either of the parties or (b) any questions relating to the rights of either party to recover damages from the other arising out of such alleged breaches. Issue No.(4) involves the determination of such a question and I do not believe that it is appropriate for me to do so.

96. In summary then, I am satisfied that Mr. O'Leary is entitled to declaratory relief against the Respondents and I will make the appropriate Order after discussion with Counsel on behalf of both parties.