THE SUPREME COURT

Record No 56/01

Murphy J
Geoghegan J
Fennelly J

Between:

Charles Coonan
										Plaintiff

AND

The Attorney General, Ireland
										Defendants

[Judgments from Murphy and Geoghegan JJ.; Fennelly J. agreed with Geoghan J.]

Judgment of Mr Justice Francis D Murphy delivered the 29th day of May, 2001.
_______________________________________________________________________

Charles Coonan, the above named Plaintiff (Mr Coonan), was appointed as State Solicitor for the area of North Kildare/ Wicklow in August, 1974, upon the terms of a document described as “Conditions of Appointment” dated the 14th day of August, 1974.  The first paragraph of that document was expressed in the following terms:-

“1	The State Solicitor shall be entitled to hold the office of State Solicitor for the above area until he shall attain the age of 65 years but, provided that  he is then in good health, the age of retirement may be extended by the Attorney General, with the concurrence of the Minister for Finance, to any age not exceeding 70 years.  The State Solicitor shall be removable at any time, by order of the Government made on the certificate of the Attorney General, for misconduct, incapacity, neglect of duty, physical or mental infirmity, or any other cause which, in the opinion of the Attorney General, would render him unfit to perform the duties of a State Solicitor.  The certificate of the Attorney General in respect of any of the aforesaid matters shall be binding on the State Solicitor.  The appointment will carry no right to pension or compensation on termination.”

Unquestionably it had been the invariable practice before 1974 and for at least 20 years thereafter for a year by year extension to be granted up to the age of 70 years to any State Solicitor who applied for it.  Mr Coonan was well aware of that practice. 

On the 14th of January, 2000, Mr Coonan, who would attain the age of 65 years on the 5th November, 2000, applied for renewal.  He met with the Chief State Solicitor in the same month who told him he was not going to be renewed after the age of 65 years.  The Attorney General on the 5th February, 2000, in accordance with a change in policy, made a decision that no extension should be granted.  On the 18th February, 2000, the Director of Public Prosecutions informed Mr Coonan that there would be no extension and by letter dated the 7th of March 2000 the Chief State Solicitor gave formal notice to that effect.

On the 4th October, 2000, Mr Coonan instituted plenary proceedings claiming a declaration that he was entitled to continue as State Solicitor for the area to which he had been appointed and an injunction restraining the Defendants from appointing any person as State Solicitor in his place.  In addition to other relief, Mr Coonan claimed damages for breach of contract.

In the statement of claim delivered on the 13th November, 2000, Mr Coonan having asserted the material facts to which I have referred went on to say:-

“7	The plaintiff is and remains state solicitor for the area of North Kildare/ Wicklow and at all material times hereto relied upon the conditions  of his appointment and the  terms both expressed and implied of his appointment and the practice heretofore in respect of extensions to state solicitors appointed by way of similar conditions of appointment.  The plaintiff has acted to his detriment and loss in the legitimate expectation that his appointment would be extended pursuant to his conditions of employment until he attained 70 years of age.

8	The defendants have in breach of the conditions of appointment and the terms expressed and implied therein failed to extend the plaintiff’s employment having been lawfully called upon so to do by the plaintiff pursuant to his conditions of appointment.”

The defence might be summarised by saying that the Defendants admitted the facts alleged in the statement of claim but denied the inferences and conclusions of law drawn therefrom.  In particular the Defendants contended that the conditions of appointment conferred on the Attorney General “a lawful discretion” to extend the Plaintiff’s age of retirement with the concurrence of the Minister for Finance to any age not exceeding 70 years:  that such discretion had been exercised lawfully to extend the Plaintiff’s age of retirement up to and including the 31st January, 2001, but no further.  In the reply delivered on the 14th December, 2000, Mr Coonan denied (among other things) that the Attorney General had lawfully exercised the discretion aforesaid.

Because of the urgency of the matter for both the Plaintiff and the Defendants the matter was processed with commendable speed.  It was heard by Ms Justice Carroll on the 23rd and 24th of January, 2001, and she delivered her judgment on the 31st of January, 2001, in pursuance of which it was ordered that Mr Coonan was entitled to recover against the Defendants damages in the sum of £100,000 together with the costs of the proceedings.  It is from that judgment and order that the Defendants appeal to this Court.

The Defendants/Appellants submitted that no term could be inferred into the contractual relationship between the parties which would be inconsistent with the discretion expressly conferred upon the Attorney General. It was argued - and the evidence appears to have supported the fact - that Mr Coonan had not altered his position to his detriment as a result of the established practice concerning extensions and consequently a claim based on estoppel could not  succeed.  The Appellants submitted that an issue of legitimate expectations could not arise in what was in essence a commercial contract between the Attorney General and a solicitor for the provision of legal services by the latter.  However, the main thrust of the argument made by Counsel on behalf of the Appellants was that nowhere - not in the pleadings, the particulars furnished or the written submissions in the High Court or this Court - had Mr Coonan specified the nature, scope or terms of the right on which he relied. Mr McDonagh, SC, for the Appellants, pointed out that the judgment of the learned trial Judge did not identify any such right.  Mr McDonagh posed the question which was not merely rhetorical but, in the existing circumstances, hypothetical, namely:-

“If the claims of the Plaintiff were upheld and the matter referred back to the Attorney General to make an appropriate determination what standard, criteria or procedure would the Attorney General be required to apply or adopt?”

As the post held by Mr Coonan had been filled before Ms Justice Carroll delivered her judgment the possibility of referring the matter back to the Attorney General was not then a realistic option.  Less still could that procedure be adopted now.  Nevertheless it is, in my view, the difficulty in answering the hypothetical question which underscores the infirmity in Mr Coonan’s case.

It was conceded by Mr Condon, SC, on behalf of Mr Coonan that the word “may” in the Conditions of Appointment conferred on the Attorney General a discretion.  Rightly, in my view, Mr Condon did not seek to argue that the word “may” should be interpreted as “shall”.  What then is the limitation on the exercise of this discretion?  Was it to be inferred that the Attorney General would afford every outgoing state solicitor an opportunity of being heard in relation to the decision to extend his term of office in a procedure analogous to that required by the decision of the House of Lords in The Council of Civil Service Unions .v. The Minister for the Civil Service [1985] AC 374.  Did the alleged rights of Mr Coonan go beyond the merely procedural?  Was the Attorney General bound to review the conduct and capacity of Mr Coonan and, if so, by reference to what standard?  Did the Attorney General owe any duty to the office holder in relation to the exercise of the contracted discretion? Mr McDonagh explored some of these possibilities but with understandable frustration.  He did not know with any degree of particularity the term which Mr Coonan claimed was implied in the contract or the restrictions allegedly imposed on the exercise by the Attorney General of his discretion.

The learned trial Judge understandably expressed concern for Mr Coonan having regard to the impact of the Attorney General’s decision on his career and expressed her conclusions in law in the following terms (at page 11 of the transcript):-

“I am not saying that the Attorney General could not change the policy of renewal on request, health permitting.  But I do say that he was not entitled to change this long standing custom, rule or policy, by whatever name it was called, and relied upon by Mr Coonan, without giving adequate notice to enable him to arrange his affairs to cope with this alteration in his life plan.  The two extra months given as a conciliatory gesture were wholly inadequate.”

It is difficult to reconcile that conclusion with the discretion expressly and admitted conferred on the Attorney General by the conditions of his appointment.  It seems to me that this decision necessarily involves the substitution of an obligation for a discretion subject to the qualification that the discretion could be restored to the Attorney General on his giving reasonable, but undefined notice, to Mr Coonan and presumably all other State Solicitors.  I cannot envisage the officious bystander postulated in Shirlaw .v. Southern Foundries [1926] LDD 1939 2 KB 206 (and more recently by this Court in Carna Foods Ltd .v. Eagle Star Insurance (Ireland) Ltd [1997] 2 IR 193) suggesting a provision to that effect.  Less still could I envisage either party testily suppressing his intervention with a common “Oh of course”.  At the very least such a suggestion would give rise to debate and the very existence of debate would preclude the implication of the suggested term.  Nor can I see any basis on which the ill defined and inadequately explored doctrine of legitimate expectations could be invoked so as to prevent successive Attorneys General exercising or declining to exercise the discretion expressly reserved to them simply because a practice or pattern could be identified which indicated that for many years the discretion had in fact been exercised one way rather than another.  Even in that context the question would arise “What was it that the office holder was led to expect?”.  The much quoted case of Webb .v. The Attorney General [1988] 1 IR 353 Finlay CJ (at 384) seems to have cast doubt upon the existence of any such right of action when he said:-

“It would appear that the doctrine of  “legitimate expectation” sometimes described as “reasonable expectation”, has not in those terms been the subject matter of any decision of our courts.  However, the doctrine connoted by such expressions is but an aspect of the well recognised equitable concept of promissory estoppel (which has been frequently applied in our courts), whereby a promise or representation as to intention may in certain circumstances be held binding on the representor or promisor.”

It was in that context that Finlay CJ quoted with approval certain passages from the judgment of Lord Denning MR in Amalgamated Property Company .v. Texas Bank [1982] QB 84 on which considerable reliance was placed by Counsel on behalf of Mr Coonan.  In his judgment in Wiley .v. The Revenue Commissioners [1993] ILRM 482 Mr Justice O’Flaherty repeated the observations which I have quoted from the judgment of Finlay CJ in the Webb Case and went on to analyse the evolution of the doctrine of legitimate expectations.  In concluding that it had no application to the claim of the plaintiff to the repayment of excise duty in accordance with certain representations made to him O’Flaherty J said (at page 494):-

“The appellant is not concerned with seeking fair procedures in the sense of submitting that he should have been heard by the Revenue Commissioners before they changed their evidentiary requirements in relation to the granting of a refund.  Rather does he submit that he should continue to have conferred on him a substantive benefit by way of exemption in the circumstances that he was not informed in advance of the more stringent requirements that the Revenue Commissioners had put in place to satisfy themselves so that they could properly discharge their duty in accordance with the scheme they had set up under the relevant legislation.  It will be clear immediately that acceptance of this admission would involve a radical enlargement of the scope of legitimate expectation.  It would involve the courts saying to the administration that it was not entitled to set more stringent standards, so that it might discharge its statutory obligations, without giving notice to anyone who might have benefited in the past from a more relaxed set of rules.  Stated thus, I believe it would involve the courts in an unwarranted interference with the actions of administrators. Our constitutional system is based on the separation of powers and just as the judicial organ of State requires the respect of the legislative and executive branches of Government, so must  the courts exercise proper judicial restraint.”

Even if the relationship between the Attorney General (or the Director of Public Prosecutions) and a state solicitor is to be seen as a matter of public law to which the doctrine of legitimate expectations applied, it would seem to me that the judgment of Mr Justice O’Flaherty would preclude Mr Coonan obtaining any substantive benefit.

At the end of the day the learned trial Judge awarded Mr Coonan a sum of £100,000 by way of damages.  Of course the trial Judge had been placed in the difficult position that Mr Coonan could not be restored to his post so that any review of his circumstances by the Attorney General would have been meaningless.  At the same time, Carroll J had received evidence that the remuneration of state solicitors had been, or was about to be, increased to £35,000 per annum. The award of £100,000 therefore would appear to represent effectively the full value of a claim for wrongful dismissal on the basis that the “employee” was entitled to three years notice of termination.  Indeed recognising that Mr Coonan had given evidence, that in the event of his ceasing to be State Solicitor, he would discontinue the employment of one typist, it may be that the award represented the full amount of the loss which Mr Coonan would sustain over a period of five years.  If the notice which it was held that he was entitled to receive of any change of policy was, say, twelve months - which would be the longest period that one could envisage as appropriate notice to determine a contract of employment from year to year - that computation could not be justified.

Whilst I share entirely the views of the learned trial Judge as to the harshness of the decision of the Attorney General and the effect which it had upon the understandable - if not legitimate - expectations of Mr Coonan, I do not accept that the Plaintiff has made out a case in law to recover damages for breach of contract or otherwise against the Defendants. I would allow the appeal.

THE SUPREME COURT

Murphy J.
Geoghegan J.
Fennelly J.
Record No. 56/01

BETWEEN

CHARLES COONAN

Plaintiff

and

THE ATTORNEY GENERAL AND IRELAND

Defendants

Judgment of Mr. Justice Geoghegan delivered the 29th day of May 2001

	On the 14th of August 1974, the plaintiff was appointed State Solicitor for the area of north Kildare/Wicklow.    As in the case of all State Solicitors since the foundation of the State until quite recent times the plaintiff was required to sign a document under which he agreed to accept and comply with certain specified conditions of appointment.    These were the same conditions of appointment as were invariably used.    For the purposes of this appeal, it is not necessary to consider the exact legal nature of the office of State Solicitor.   Even if, for some purposes, his office might be regarded as being governed by public law (and I am expressing no opinion whatsoever on this matter) it is the contractual terms of his appointment and matters arising therefrom which are in issue in this case ,which was an ordinary action commenced by plenary summons and not, in any sense, an application for judicial review.    For the most part in so far as the action is founded directly on contract paragraph 1 of the conditions of appointment is the relevant provision.    I think it best to set out that paragraph and then in the light of it explain what the issues between the parties are.    Paragraph 1 reads as follows:-

“The State Solicitor shall be entitled to hold the office of State Solicitor for the above area until he shall attain the age of sixty-five years but, provided that he is then in good health, the age of retirement may be extended by the Attorney General, with the concurrence of the Minister for Finance, to any age not exceeding seventy years.    The State Solicitor shall be removable at any time by order of the Government made on the certificate of the Attorney General, for misconduct, incapacity, neglect of duty, physical or mental infirmity or for any other cause which, in the opinion of the Attorney General, would render him unfit to perform the duties of State Solicitor.    The certificate of the Attorney General in respect of any of the aforesaid matters shall be binding on the State Solicitor.    The appointment will carry no right to pension or compensation on termination.”

	When the plaintiff was reaching the age of sixty-five years he applied, as most of his colleagues had done over many years, for an extension.    Apart from a very minimal extension which the plaintiff was ultimately given this was refused and it was refused on the grounds of a new policy which the Attorney General was adopting.    That policy was that there would be no more extensions after the age of sixty-five years unless there were exceptional circumstances.    I do not find it necessary to set out in this judgment the history of how this policy came about.    It is sufficient to state that the policy was decided upon.

1	In the High Court and on appeal in this court the plaintiff essentially makes two alternative cases which are:-

(1)	That once there was no problem with the plaintiff’s health there was in all the circumstances a breach of contract on the part of the Attorney General in not granting the extension.
(2)	Even if there was technically no breach of contract the Attorney General was precluded from refusing to renew by virtue of the doctrine of promissory estoppel and/or legitimate expectation.

	There is a further refinement to be made in relation to issue No. 1.    The contractual issue was argued on behalf of the plaintiff in the High Court effectively on two alternative fronts though it was never put like that.    As it happens, the books of transcript from the High Court include argument as well as evidence and it emerges from Book 1 of the transcript that Mr. Condon, S.C. opened the case on behalf of the plaintiff on the basis that the Attorney General was contractually obliged to grant the extensions provided that there was no health problem and that the word “may” in the first sentence of Condition No. 1 connoted merely an enabling provision allowing the Attorney General actually to grant the extension in such circumstances.    On this interpretation the Attorney General would have no discretion.    The question of the role of the Minister for Finance has never really featured and I think that it would be accepted by all sides that it would be fiscal matters with which the Minister for Finance would be concerned and I do not think that his role is relevant to the issue.

	Mr. Ercus Stewart, S.C., also acting for the plaintiff, argued the contractual points slightly differently in his closing of the case in the High Court. At p. 108 of Book 2 of the transcript he is reported as having said as follows:-

“What the State is alleging is that some time in 1999, they adopted a policy or a rule - the words are both used - changing it, and I would submit, Judge, that if there was a discretion, that the discretion is clearly being ... totally being done away with, or fettered by a general rule or policy that only in exceptional circumstances, and the two - and the word two, Judge, they became three a few moments ago, and they are back now to two.    They were related to the particular State Solicitor’s office and the work being done at the time.    You can call them three situations or two, but it is two or three.    But they each relate to the particular job, the particular office being served, and they clearly are matters of benefit to the State.”

	While therefore Mr. Condon was making the bolder argument that there was no discretion left to the Attorney General, if there was good health, Mr. Stewart was modifying that somewhat by arguing that even if the Attorney General did have a discretion under the contract, he was not contractually permitted to adopt a policy fettering his own discretion.    At the hearing of the appeal Mr. Condon ultimately conceded that the Attorney General did have some discretion.  

	Carroll J., in the High Court, delivered a reserved judgment in which having referred to the evidence of a former Chief State Solicitor, Mr. Dockery, and the State Solicitor for Limerick, Mr. Murray, who was also President of the State Solicitors Association, which was to the combined effect that over many years renewals were more or less routine, she expressed strong adverse views as 1to the manner in which the plaintiff had been treated by the State and she held in his favour.    The defendants have appealed that decision to this court.       Carroll J., in her judgment, chose not to analyse what exactly the contractual terms were but preferred to base her decision on estoppel arising out of the manner in which the Attorney General, over many years, had exercised his contractual discretion.    At p. 10 of her judgment she said the following:-

“This case seems to me to fit four square within the doctrine expressed by Lord Denning M.R. in Amalgamated Property Company Limited v. Texas Bank [1982] Q.B. 84 and referred to by Finlay C.J. in Webb v. Ireland [1988] I.R. 353:

‘Where the parties to a transaction proceed on the basis of an underlying assumption either of fact or law, whether due to misrepresentation or mistake makes no difference, on which they have conducted the dealings between them neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow them to do.    If one of them does seek to go back on it the court will give the other such remedy as the equity of the case demand.’

	Counsel for the Attorney General, Mr. McDonagh, S.C., argued very forcefully by reference to case law that the doctrine of legitimate expectation had no place in private law but only in public law.    But in view of the fact that the Amalgamated Property Company Limited was a private law case and not a public law case, I do not think that this issue really arises.    It would seem that it was more on the basis of estoppel than legitimate expectation that the learned trial judge came to her decision.

	Mr. McDonagh also drew to the attention of the court difficulties in the way of the plaintiff succeeding on the basis of estoppel and these are referred to in the judgment of Murphy J., but as I have formed the view that the plaintiff is entitled to succeed at any rate on foot of  his contract with the Attorney General, I do not find it necessary to consider the application of the principles of estoppel.

	I return therefore to the contract.    It may be at least arguable, as originally suggested by Mr. Condon, that the Attorney General was contractually obliged to renew subject only to health problems but I am inclined to the view that that is not a correct interpretation, having regard to the use of the word “may”.    I find it difficult to follow how the word “may” in the context could connote merely an enabling provision.    In this exercise one is not construing a statute or a statutory instrument and it would be absurd to suggest that Mr. Coonan could enable the Attorney General to do something.    I am satisfied, therefore, that over and above the health question the Attorney General does have a residual discretion which could be exercised against renewal in particular circumstances and in a particular case.   But I am in complete agreement with the more modified contractual argument to the effect that the Attorney General was not entitled to introduce a blanket policy.    When I say that he was not entitled to do so, I mean that he was not contractually entitled to do so.    Obviously, the Attorney General can have any kind of policy and, indeed, such a policy may well have been very sensible.    But he may, in any given instance, be precluded contractually from implementing it.    I believe that that is the case here.    During all the years that the plaintiff was a State Solicitor he might have from time to time looked at his own contract, and if he did so, it would have been clear to him that by the plain words of Condition No. 1 he was given, at the very least, the hope of being considered for renewal on his own individual circumstances if he should make an application for renewal after sixty-five.    It would never have occurred to him that that discretion in the Attorney General for which he had been guaranteed in the contract would be at the relevant time effectively removed.    In order to construe Condition No. 1 in this way, I do not think that it is necessary to imply any term.    This would seem to be the natural interpretation of the express term but if it is necessary to imply a term, I would have no hesitation in doing so.    It must surely have been an attractive feature for most applicants for State Solicitorships over the years that they would have the expectation, or at the very least, the reasonable hope that they could remain at the job until seventy.    The absence of any pension made this of considerable importance.

	I am firmly of opinion, therefore, that the Attorney General has been in breach of contract and I agree with the view of the learned trial judge that the only practical remedy now is damages.    It is not entirely clear how Carroll J. arrived at the figure of £100,000, but I think that it was a reasonable figure.    She had evidence before her of the annual salary which the plaintiff was receiving, a figure in the order of £27,000 and she had been told that a substantial increase was likely to emerge from the report of the Buckley Review Body.    That report was published shortly before the judgment and it did recommend increases which would have brought the salary, if implemented, to £35,000.    I do not think that the learned trial judge was making an exact calculation of loss of earnings.    In arriving at her figure, the learned trial judge was entitled to have regard to the earnings.    While there could have been no guarantee that the plaintiff would have been retained till seventy even if the Attorney General properly exercised his discretion, the learned judge was entitled to weigh up the probabilities especially in the context that the Attorney General had elected to defend the action solely on the basis of policy with no suggestion of ill health or unsuitability on the part of the plaintiff.     In all the circumstances, the justice of the case is met by the award of £100,000 and I would, therefore, dismiss the appeal.