Beatty -v- The Rent Tribunal [2005] IESC 66 (21 October 2005)

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Supreme Court of Ireland Decisions

You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Beatty -v- The Rent Tribunal [2005] IESC 66 (21 October 2005)
URL: http://www.bailii.org/ie/cases/IESC/2005/S66.html
Cite as: [2006] 1 ILRM 164, [2006] 2 IR 191, [2005] IESC 66

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Judgment Title: Beatty -v- The Rent Tribunal

Neutral Citation: [2005] IESC 66

Supreme Court Record Number: 290/03

High Court Record Number: 2001 110 JR

Date of Delivery: 21/10/2005

Court: Supreme Court

Composition of Court: Denham J., Hardiman J., Geoghegan J., Fennelly J., McCracken J.

Judgment by: Fennelly J.

Status of Judgment: Approved

Judgments by	Result	Concurring	Dissenting
Geoghegan J.	Appeal allowed - set aside High Court Order	Denham J., Hardiman J.
Fennelly J.	Appeal allowed - set aside High Court Order
McCracken J.	Appeal allowed - set aside High Court Order

Outcome: Allow And Set Aside

THE SUPREME COURT

Record No. 290/2003

Denham J.
Hardiman J.
Geoghegan J.
Fennelly J.
McCracken J.

BETWEEN

MARK BEATTY and WALTER BEATTY

Respondents/Applicants

and
THE RENT TRIBUNAL

Appellant/Respondent

and
FRANCIS McNALLY

Notice Party

JUDGMENT of Mr. Justice Geoghegan delivered 21st day of October 2005

The issue which arises in this appeal is whether a claim in damages for negligence may be made against the Rent Tribunal established under the Housing (Private Rented Dwellings) (Amendment) Act, 1983 arising out of the tribunal’s manner of determining a rent and a consequent monetary loss to the respondents on this appeal. The High Court (O’Donovan J.) made such an award and the Rent Tribunal which is the appellant on this appeal has appealed that decision.

Arising out of problems concerning the constitutionality of the Rent Restrictions Act, 1960 new statutory provisions relating to rent fixings in respect of private rented dwellings were enacted in the Housing (Private Rented Dwellings) Act, 1982. In the case of dwellings which had formerly been controlled dwellings under the Rent Restrictions Acts, the Act provided for applications to the District Court to have new rents fixed having regard to criteria set out in sections 12 and 13 of that Act. The 1983 Act cited above removed this rent fixing jurisdiction from the District Court and conferred it on a newly established statutory tribunal called “The Rent Tribunal”. This Act provided for the Tribunal to have a seal and that the relevant Minister might appoint from his staff a person or persons to assist in the performance of the tribunal’s functions and that expenses thereby incurred would be paid out of funds provided by the Oireachtas. There is no appeal from the determination of the Rent Tribunal except on a question of law which can go to the High Court.

As Fennelly J. has given a full account of the factual background to this appeal which I happily adopt, I will set it out in an abbreviated form. The respondents are the landlords and the notice party is the tenant of a controlled dwelling within the meaning of the Rent Restrictions Acts. An application had been brought to the Rent Tribunal to determine a rent in 1995 and the rent was fixed at £300 per month. Following on a new application brought in July 2000 the Rent Tribunal determined a new rent of £500 per month on the 12th December, 2000. That figure was less than had been proposed even by the tenants’ valuer and as Fennelly J. points out was, therefore, quite surprising.

The respondents took the view that in arriving at its determination the Rent Tribunal had not adopted fair procedures and accordingly, pursuant to leave applied for judicial review in the form of an order of certiorari quashing the tribunal’s determination. This application came on for hearing before Finnegan J. (as he then was) who granted the order sought on three grounds:

1. The presence of the tenant and the absence of the landlords during the tribunal’s inspection of the premises gave rise to an apparent unfairness.
2. The respondents were not given adequate time to respond to a valuation report submitted by the notice party. Time limits had been laid down for the furnishing of reports but a report from the notice party was received outside of the time limit and shortly before the date scheduled for the decision of the tribunal and in circumstances where the tribunal refused to delay its decision to enable the respondents to have a proper opportunity to respond.
3. Absence of adequate reasons for the determination.

Following on the High Court order, the learned High Court judge permitted a claim for damages to be made which in due course came on for hearing before O’Donovan J. The High Court awarded damages based only on ordinary negligence.

There is a single and simple reason why I believe that the appeal should be allowed and the claim for damages dismissed. Even though the Rent Tribunal (the appellant) is a tribunal which essentially determines rent disputes as between private parties it is a statutory body exercising statutory duties in the public interest. In these circumstances, I am quite satisfied that provided it is purporting to act bona fide within its jurisdiction it enjoys an immunity from an action in ordinary negligence. (I will comment later on the issue of immunity in respect of misfeasance in public office). In this respect it is in no different position from a court whether such court be traditionally categorised as “superior” or “inferior”. I agree, of course, with Fennelly J. who has pointed out in his judgment that the same conclusion can be arrived at by a different route. Fennelly J. prefers to avoid the concept of “immunity” in favour of the concept that a negligence action does not lie if, in all the circumstances, it would not be just and reasonable to impose a duty of care. However, the latter seems to me to be a concept that would apply to a wide number of situations (e.g. fear of asbestos disease cases such as in Fletcher v. Commissioners of Public Works) [2003] 1 IR 465) that have nothing to do with immunity of judges or public tribunals. While there is obviously an overlap, I think that judicial immunity is a free standing independent concept and should not be swallowed up by the wider concepts of the general law of negligence.

I am unable to accept the argument that this, being a statutory tribunal, there can be no “immunity” in the absence of a section in the Act providing for it. In my view, the immunity of a statutory tribunal arises at common law and if it is to be removed, the statute has to say so. In this connection and because I agree with it, I think it appropriate to cite a passage from the speech of Lord Kilbrandon in the House of Lords in Arenson v. Casson Beckman Rutley & Co. (for some reason named in the English Court of Appeal as Arenson v. Arenson) [1975] 3 All ER 901 at 918. I should explain that in that case there was some difference of opinion between the Law Lords as to whether a private arbitrator should enjoy immunity. Ever since the decision of the House of Lords in Sutcliffe v. Thackrah 1 All ER 859 it was clear that as a matter of English law somebody engaged as an expert such as an architect giving a certificate or a valuer did not enjoy immunity, contrary to what had been held in some older cases. To some extent this gave rise to an issue as to whether arbitrators privately appointed should enjoy immunity unless they had contractually given themselves immunity. It had, at any rate, been conceded in argument in Arenson that arbitrators did enjoy immunity. It is not necessary for me in any way to consider that issue as it does not arise in this case. Here the court is concerned with a tribunal set up by statute. Relevant to that issue, Lord Kilbrandon had this to say at p. 918:

“If, then, arbitrators are not immune from suit, what about the judges? Here I believe one is in a different region to which different principles apply. I do not rely on considerations of public policy, although no doubt it is the general acceptance of the principles which has caused a public policy to be adopted. The whole subject has recently been reviewed in

Sirros v. Moore

[1974] 3 All ER 776. I am aware that in trying to formulate a principle I am straying more towards contract than towards tort, but as I explained earlier I am not distressed by that. The state – I use the word for convenience – sets up a judicial system, which includes not only the Courts of Justice but also the numerous tribunals, statutory arbitrators, commissioners and so on who give decisions, whether final or not, on matters in which the state has given them a competence. To these tribunals the citizen is bound to go if he wants to maintain particular rights or to obtain an opinion carrying authority ultimately enforceable by the public agencies; like as before them the citizen must appear to answer claims or complaints against him. (This is subject to the rights citizens may have to make agreements one with another to submit their civil differences elsewhere). The citizen does not select the judges in this system, nor does he remunerate them otherwise than as a contributor to the cost of government. The judge has no bargain with the parties before him. He pledges them no skills. His duties are to the state: it is to the state that the superior judge at least promises that he will do justice between all parties, and behave towards them as a judge should. I do not suppose that there is any English lawyer, and he would be a bold Scottish lawyer, who would say that here there is a contract between the state and the judge with a

jus quaesitum tertio

in the litigant. It is for the state to make such arrangements as may be necessary for the correction of careless or erroneous judicial decisions; if those arrangements are deemed to be inadequate, it is for parliament to put the matter right. And if it be necessary to state the matter in terms of the law of tort, litigants are not persons to whom judges owe a legal duty of care – a duty which does not exist in the abstract, but only towards persons in particular relationships. The fact that he is under a moral duty is

nihil ad rem.

Judges in this context include, of course, persons forming tribunals and other bodies such as I referred to above. You do not test a claim to immunity by asking whether the claimant is bound to act judicially; such a question, as Lord Reid pointed out in

Sutcliffe v. Thackrah

, leads to arguing in a circle. Immunity is judged by the origin and character of the appointment, not by the duties which the appointee has to perform, or his methods of performing them. I say nothing here about the immunity of counsel and witnesses, which again raises quite different and, to this appeal, irrelevant consideration.”

I find myself in complete agreement with that passage. Those principles put into a modern form by Lord Kilbrandon have applied in the common law courts for hundreds of years. The position was neatly summarised by Lord Denning M.R. in Sirros v. Moore cited above at p. 781. The passage in question reads as follows:

“Ever since the year 1613, if not before, it has been accepted in our law that no action is maintainable against a judge for anything said or done by him in the exercise of a jurisdiction which belongs to him. The words which he speaks are protected by an absolute privilege. The orders which he gives, and the sentences which he imposes, cannot be made the subject of civil proceedings against him. No matter that the judge was under some gross error or ignorance or was actuated by envy, hatred and malice, and all uncharitableness, he is not liable to an action. The remedy of the party aggrieved is to appeal to a court of appeal or to apply for habeas corpus, or a writ of error or certiorari, or to take such step to reverse his ruling. Of course if the judge has accepted bribes or been in the least degree corrupt, or has perverted the court of justice, he can be punished in the criminal courts. That apart, however, a judge is not liable to an action for damages. The reason is not because the judge has any privilege to make mistakes or to do wrong. It is so that he should be able to do his duty with complete independence and free from fear. It was well stated by Lord Tenterden C.J. in

Garnett v. Ferrand

(1827) 6 B & C 611 at 625, 626;

‘This freedom from action and question of the suit of an individual is given by the law to the Judges, not so much for their own sake as for the sake of the public, and for the advancement of justice, that being free from actions, they may be free in thought and independence in judgment, as all who are to administer justice ought to be’.

Those words apply not only to judges of the superior courts, but to judges of all ranks, high or low. Lord Tenterden C.J. spoke them in relation to a coroner. They were reinforced in well chosen language in relation to a county court judge by Kelly C.J. in

Scott v. Stansfield

(1868) LR 3 Exch 220 at 223; and to a colonial judge by Lord Esher MR in

Anderson v. Gorrie

[1895] 1 QB 668 at 671.”

It is necessary to make two observations about that passage. It is not dealing with judges acting outside their jurisdiction altogether. That is where in Lord Denning’s view, as pointed out by Fennelly J., the distinction is drawn between inferior courts and superior courts of record. However, even in that case the jurisprudence to a large extent related to unpaid justices of the peace and, certainly, to courts which were not courts of record. All Irish courts are courts of record. The second point to be made is that Lord Denning, although making it clear that Lord Tenterden’s remarks related to a coroner does not specifically refer to statutory tribunals but the underlying reason for the immunity quite obviously applies just as much to statutory tribunals as to courts and coroners in inquest and that is why no attempt is made by Lord Kilbrandon to make any such distinction. The following further passage from the judgment of Lord Denning in Sirros at p. 785 is also highly relevant. Under the subheading “The modern courts” he said the following:

“In the old days, as I have said, there was a sharp distinction between the inferior courts and the superior courts. Whatever may have been the reason for this distinction, it is no longer valid. There has been no case on the subject for the last hundred years at least. And during this time our judicial system has changed out of all knowledge. So great is this change that it is now appropriate for us to reconsider the principles which should be applied to judicial acts. In this new age I would take my stand on this. As a matter of principle the judges of superior courts have no greater claim to immunity than the judges of the lower courts. Every judge of the courts of this land – from the highest to the lowest – should be protected to the same degree and liable to the same degree. If the reason underlying this immunity is to ensure ‘that they may be free in thought and independent in judgment’, it applies to every judge, whatever his rank. Each should be protected from liability to damages when he is acting judicially. Each should be able to do his work in complete independence and free from fear. He should not have to turn the pages of his books with trembling fingers, asking himself: ‘If I do this, shall I be liable in damages?’ So long as he does his work in the honest belief that it is within his jurisdiction, then he is not liable to an action. He may be mistaken in fact. He may be ignorant in law. What he does may be outside his jurisdiction – in fact or in law – but so long as he honestly believes it to be within his jurisdiction, he should not be liable. Once he honestly entertains this belief, nothing else will make him liable. He is not to be plagued with allegations of malice or ill-will or bias or anything of the kind. Actions based on such allegations have been struck out and will continue to be struck out. Nothing will make him liable except it be shown that he was not acting judicially, knowing that he had no jurisdiction to do it.”

As there are some possible ambiguities in the two passages from the judgment of Lord Denning already cited, I want to make it clear that if a judge or tribunal was to knowingly engage in behaviour that was criminal or malicious I would consider that for the reason given in the last sentence of the second passage the immunity to a claim for damages for misfeasance of public office would not apply.

Subject to that proviso I find the reasons given by the English judges for the immunity principle in relation to judges or tribunals involved in judicial acts to be wholly persuasive and I am quite satisfied that the Rent Tribunal was immune in this case to liability for damages for ordinary negligence.

The circumstances in which (if at all) a judge or tribunal may be sued for damages for misfeasance in public office as distinct from ordinary negligence need not be considered in this judgment. The learned High Court judge expressly found that there was no malice or improper intentions on the part of the Tribunal. That being so, there can be no question of liability for misfeasance in public office based on deliberate misbehaviour. It has, however, been pointed out in the supplementary written submissions lodged on behalf of the respondents/applicants and in the oral submissions of their counsel, Mr. Michael Counihan, S.C. that the House of Lords in Three Rivers District Council & Others v. Bank of England [2000] 3 All ER 1 held that deliberate misconduct is not always necessary to ground an action for misfeasance in public office. Subjective recklessness may be sufficient. To quote Lord Steyn at page 1 of the report:

“Reckless indifference to consequences is as blameworthy as deliberately seeking such consequences. It can therefore now be regarded as settled law that an act performed in reckless indifference as to the outcome is sufficient to ground the tort in its second form.”

This view of the law was approved by this court in the unreported judgment of mine delivered the 21st April, 2005 in Kennedy v. The Law Society of Ireland. I agree, however, with the views expressed by Fennelly J. in his judgment where he has pointed out that even though subjective recklessness short of deliberate misconduct may be sufficient nevertheless “bad faith in the exercise of public powers … is the essence of the tort.” I agree also with Fennelly J. that there is no evidence of that sort of recklessness in this case. By reason of the finding by O’Donovan J. of no deliberate malice or misconduct and the absence of recklessness in the sense used by Lord Steyn it is not necessary for me to express a definitive view as to whether an action for misfeasance in public office lies against a judge or tribunal relating to the manner in which such judge or tribunal carried on its business. As Lord Denning pointed out, for the most part, in such situations there are public law remedies in the form of judicial review and where there is a crime involved there may be a prosecution. I would have considerable doubt as to whether an action lies against a judge or a statutory tribunal for misfeasance in public office in circumstances where the court or tribunal was acting within jurisdiction but consideration of that matter can be postponed to a suitable case.

I would, therefore, allow the appeal but only on the basis of judicial immunity. I do not want to express any views on the principles of Irish law relating to recovery of damages for economic loss in a negligence action. I am satisfied that the law on this question has not been finally determined in Ireland notwithstanding some relevant obiter dicta of Keane C.J. in Glencar Exploration P.L.C. v. Mayo County Council (No. 2) [2002] 1 IR 84. It is unnecessary to express any views on that question in this appeal which, while no doubt important to the parties, relates to a very minor factual issue.

JUDGMENT delivered by MR JUSTICE FENNELLY on the 21st day of October, 2005.

The task of the Rent Tribunal is to fix rents. Does it owe a duty of care to landlord or tenant in doing so? The Respondents secured Judicial Review of a rent fixed by the Tribunal and the High Court gave them damages. This appeal requires the Court to examine once more the boundaries of liability in negligence.

The statutory background
This court, in Blake v Attorney General [1982] IR 117, declared the principal provisions of the Rent Restrictions Act, 1960 to be invalid having regard to the provisions of the Constitution: they so limited rents as to represent an unjust attack on the property rights of landlords.
The first legislative attempt to remedy the gap in protection for tenants of controlled dwellings resulted in failure, when this Court, in Re Article 26 of the Constitution and the Housing (Private Rented Dwellings) Bill, 1981, [1983] I.R. 181, declared also incompatible with the Constitution the central rent-fixing provisions of that Bill.
The Oireachtas then enacted the Housing (Private Rented Dwellings) Act, 1982. Section 11 of that Act provided that, in default of agreement, the rent of any dwelling to which the Act applied was to be fixed by the District Court. The Act applied generally to dwellings which had formerly been controlled dwellings under the Rent Restrictions Act. Rents were to be fixed having regard to the considerations set out in sections 12 and 13 of the Act. These were designed to approximate rents more to economic or market reality than had been the case under the former Rent Restrictions Acts. Nonetheless, landlords of controlled dwellings remain bound by statutory control.
The Housing (Private Rented Dwellings) (Amendment) Act, 1983 provided for the establishment of the Rent Tribunal, which is, of course, the Appellant in the present appeal. The Act took the rent-fixing function away from the District Court and conferred it on the Rent Tribunal. The Tribunal is “to perform the functions assigned by this Act.” (Section 2(1)). The Minister for the Environment appoints the members of the Tribunal, which is to consist of “a chairman and so many vice-chairmen and ordinary members” as the Minister “considers necessary from time to time for the performance by the Tribunal of its functions under this Act.” Under Regulations (Housing (Rent Tribunal) Regulations, 1983, S.I. 222/1983), the Tribunal sits in divisions of three to determine applications. One member of a division must have “knowledge of, or experience in, the valuation of property.”
Although, the Tribunal is to have a seal (section 4), it is not provided with any independent budget or staff, but the Minister “may from time to time appoint from among his officers so many person as he considers necessary to assist in the performance of its functions under this Act.” Section 21 of the Act provides that the “expenses incurred by the Minister in the administration of this Act shall be paid out of moneys provided by the Oireachtas.”
The Tribunal now performs the function formerly assigned to the District Court. The decision of the Tribunal is final and conclusive (section 12(3)) save that section 13(1) permits an appeal to the High Court on a question of law. The Minister may also, at the request of the Tribunal, refer a question of law to the High Court (section 13(2)).

The Facts and Judicial Review proceedings
The Respondents are the landlords and the Notice Party is the tenant of a controlled dwelling within the meaning of the Acts of 1982 and 1983. The rent had been determined by the Tribunal in 1995 at £300 per month. The Respondents applied in July 2000 to have a new rent determined by the Tribunal. The Tribunal on 12th December 2000 determined the rent at £500 per month, a figure below even the figure proposed by the tenant’s valuer. This surprising circumstance does not, however, concern the Court at this point, though it must, naturally, have had an impact on the return the Respondents obtained from the dwelling.
The Respondents had two principal complaints about the procedures followed by the Tribunal in the course of performing its task of fixing the rent and one concerning the form of the decision. The Respondents succeeded in their application for Judicial Review of the Tribunal’s decision. Finnegan J, as he then was, granted Judicial Review by way of certiorari of the decision of the Tribunal on the following grounds:

1. The Tribunal carried out an inspection of the premises in the presence of the Notice Party but in the absence the Respondents; Finnegan J found it unnecessary to decide whether the Tribunal’s indisputable failure to respect the right of the Respondents to be present (they had made their wish to be present abundantly clear) had resulted in any actual unfairness. He proceeded on the basis that justice must be seen to be done;

2. The Tribunal afforded the Respondents insufficient time to respond to the valuation report submitted by the Notice Party; in this respect, there was a clear and substantive failure to respect fair procedures; the Tribunal, having laid down a time limit for the receipt of valuation reports from both sides, with which the Respondents had complied, accepted a report from the Notice Party, which raised new issues about the condition of the premises, well outside the time; this report was received within days of the date the Tribunal had notified for the pronouncement of its decision, but the Tribunal refused the Respondents’ request for an adjournment and an opportunity to respond to the report; thus, it proceeded to determine the rent without giving the Respondents any fair opportunity to respond;

3. The Tribunal failed to give any or any adequate reasons, even when requested, for its determination; Finnegan J held that they should have specified, inter alia, their finding as to the “gross rent” and “the allowance for improvements.”

The damages claim and High Court Decision
The Respondents then sought damages suffered as a result of the invalid decision of the Tribunal. The Statement of Grounds presented at the time of the application for leave to apply for Judicial Review included as one of the reliefs sought: “damages……for breach of statutory duty, negligence and misfeasance in public office.” Finnegan J did not deal with the claim for damages, but the High Court order made on foot of his judgment gave liberty to the Respondents to apply in relation to damages. The question became whether, as a matter of law, the Tribunal is liable in damages to compensate the Respondents for the consequences of the invalidity of their decision of 12th December 2000.
The claim for damages was heard by O’Donovan J on the basis of affidavits and without oral evidence. It is his judgment of 16th May 2003 which is the subject of this appeal. Following a detailed and considered review of the principal authorities, he found in favour of the Respondents and awarded a sum of €5,817.15. His principal conclusion was:

“……when making the determination of 12th December 2000 [the Tribunal] owed to both the [Respondents] and the [Notice Party] ……… a duty to take reasonable care to insure that the said determination accorded with principles of law and that, in the event that it failed to do so and that, as a result of that failure, adverse consequences were suffered by either [party] then the [Tribunal ] is liable in damages to the injured party………………[T]he loss of rent suffered by [the Respondents] flowed directly from the [Tribunal’s] failure to comply with the principles of natural and constitutional justice and that it was foreseeable that such a loss would arise in the event of such non-compliance, and it also seems to me that the current state of the law in this country is that economic loss arising in such circumstances is recoverable by the injured party.”

The appeal
The Tribunal appealed the decision of O’Donovan J.
Counsel for the Tribunal, Mr Maurice Collins, Senior Counsel, submitted that the learned High Court judge had found in favour of the Respondents only on the basis of common law negligence. I think this is correct. Nonetheless, on the hearing of the appeal, Mr Michael Counihan, Senior Counsel for the Respondents, sought to argue a case of misfeasance in public office. He submitted that the courts have now recognised that the tort in question extends to cases of recklessness, referring to the decision of the House of Lords in Three Rivers District Council and others v Bank of England [2000] 2 AC 1. However, O’Donovan J found it “reasonable to conclude” that the Tribunal had not been “motivated by malice.” Mr Counihan was not able to put the matter beyond stating that the Tribunal had patently acted in breach of the rules of natural justice; the Tribunal was negligent in the extreme and this amounted to recklessness.
This argument misunderstands the nature of the recklessness to which, for example Lord Steyn referred in Three Rivers. Lord Steyn certainly recognised the possibility that recklessness in the exercise of public-law power might suffice to establish the tort, but he also said, at page 192, that “bad faith in the exercise of public powers … is the essence of the tort.” The sort of recklessness that will qualify as equating to malice is something much more than gross carelessness. It requires clear advertence to the risk (for example that there is no power to do the act) and not caring about the consequences. Objective recklessness is not enough. Geoghegan J, in his judgment in Kennedy v The Law Society (unreported 21st April 2005), accepted that recklessness could amount to malice but insisted that “subjective mala fides is an essential feature of” the tort. There is no evidence whatever of recklessness of that sort in the present case.
There has been no attempt to further the Respondents’ case on the basis of breach of statutory duty. Hence, the appeal is concerned with common law negligence.
Mr Collins submitted that, in order for the Tribunal to be liable in damages for negligence, it would have to be demonstrated that, over and above its public-law duties, which render the Tribunal liable to have its decisions judicially reviewed, it owed a duty of care in private law to the Respondents. In order to establish the existence of such a duty, it would be necessary for the claim to pass a three-part test: there would have to be a relationship of proximity between the parties such as the law has recognised; that it was foreseeable that damage would flow from want of care in the performance of the public duty; that it was fair and reasonable that the duty of care be imposed.
Mr Collins submitted, in effect, that the claim of the Respondents does not satisfy the test of proximity or, alternatively, that it is not fair and reasonable to impose the duty. He said that there is no decided case in which a duty has been held to be owed by a statutory body of the nature of the Tribunal. He cited very widely from the decided cases and I will refer to these in more detail. Perhaps most precisely, he submitted that the decisions of this Court in Siney v Dublin Corporation [1980] I.R. 400 and in Ward v McMaster [1988] I.R. 337 should be considered in the light of the qualifications apparent from Sunderland v Louth County Council [1990] I.L.R.M. 658. In that case a claim for damages for negligence failed. It was based on the failure of the planning authority to inspect the suitability of the ground for the development for which planning permission sought. The first two cases can be explained by the existence of a statutory scheme designed to protect the interests of particular groups of people who were unable to provide from their own resources the sort of protection the legislation was intended to provide.
Mr Collins also referred to the well-established immunity from suit of Judges (Deighan v Ireland [1995] 2 I.R. 57; O’Connor v Carroll [1999] 2 I.R. 160) and arbitrators (Sutcliffe v Thackrah [1874] A.C. 727).
Finally, and as an alternative to his main argument, Mr Collins submitted that the Respondents’ claim is for the recovery of pure economic loss, referring to the dictum of Keane C.J. on the subject in Glencar Exploration plc v Mayo County Council, at page 134. He submitted that, as a general principle, pure economic loss is not recoverable in negligence.
Mr Counihan supported the decision of O’Donovan J, stating that the Respondents were entitled to rely on the Tribunal to take reasonable care in the exercise of their statutory powers. Having regard to its history, the legislation applies to a specific and identifiable category of persons, namely both the landlords and tenants of controlled dwellings. Thus, in contradistinction with the situation in Glencar Exploration plc v Mayo County Council [2002] 1 IR 84 and Sunderland v Louth County Council, cited above, the duty of the Tribunal was not one merely owed to the public in general. In the cases of landlords, the legislation restricts constitutionally protected property rights. Thus, a failure of the Tribunal to act with due care should sound in damages in the same way as an action for damages for breach of constitutional rights. The Tribunal is sui generis and should not enjoy immunity from suit in the same way as planning authorities or other public bodies, as explained in Pine Valley Developments v Minister for the Environment [1987] I.R. 23. The parties before the Tribunal are members of a closed class of persons and are in a particularly close relationship with that body. There is no public interest in the amount of the rent fixed. It is a matter exclusively of interest to the parties.
The Respondents accept that, unlike the plaintiffs in Siney v Dublin Corporation and in Ward v McMaster, both cited above, they cannot claim to be persons unable to provide for themselves, but submit that, in the light of Blake v Attorney General, they are entitled to a measure of protection. They do not accept that the adjudicative nature of the Tribunal’s decisions is relevant: the Tribunal is bound to act fairly and with a reasonable measure of expertise. There is no justification for immunity (Desmond v Riordan [2000] 1 I.R. 505).
Finally, the Respondents support the conclusion of the learned trial judge that the fact that they seek to recover damages for pure economic loss does not prevent them from recovering. Also, towards the end of the hearing, Mr Counihan introduced a number of examples of cases where damages have been awarded for various wrongs committed. Principal among these was Philips v Medical Council [1991] 2 I.R. 115, where Costello J awarded damages for breach of statutory duty against the defendant for failure to determine within a reasonable time an application for registration as a medical doctor.

The authorities
The boundaries of the law of negligence will continue to be debated whenever the courts are asked to award damages in novel categories. The underlying principles are, nonetheless well established. They are:

· That there is a relationship of such proximity between the parties such as to call for the exercise of care by one party towards the other;

· That it is reasonably foreseeable that breach of the duty of care will occasion loss to the party to whom the duty is owed;

· That it is just and reasonable that the duty should be imposed.

In addition, as I will discuss later, the law has been slow to impose liability in negligence for damage consisting of pure economic loss. Whether there is a relationship of proximity is essentially one of fact. The court must look at the circumstances of the parties. Keane C. J., in his comprehensive treatment in Glencar, with which all members of this Court agreed, cited the memorable formulation by Lord Atkin in Donoghue v. Stevenson [1932] AC 562 at p. 580:

"The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer's question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be - persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question."

In all truth, it has proved very difficult to improve on Lord Atkin’s dictum. It underlies the thinking of our courts in the four leading Irish cases decided in recent years, which have been cited to us. All four cases concerned allegations of negligence in the exercise of statutory powers.
Siney v Dublin Corporation and Ward v McMaster lie on one side: they said that there was proximity and a duty of care. Sunderland v Louth County Council and, of course, Glencar fall on the other side and the plaintiffs lost.
The plaintiff in Siney became the tenant in a new block of flats built by Dublin Corporation, as it was then known, pursuant to its statutory powers as housing authority. Within two months water began to appear under the floor and fungus grew on the walls, all due to defective ventilation. This should have been discovered on inspection. The flat was unfit for human habitation. In addition to finding that there was an implied term in the letting agreement regarding the fitness of the dwelling, this Court unanimously held that the Corporation owed a duty of care at common law to the tenant. The two factors underlying this conclusion were that the flats were provided for persons of insufficient means to provide houses for themselves and that the defective ventilation was concealed, so that the incoming tenant could not have been aware of it and could not reasonably have been expected to discover it (see O’Higgins C.J. at page 415). Henchy J gave judgment to the same effect, stating at page 422 that “there was a proximity of relationship creating a general duty on one side and a justifiable reliance on the other side on the observance of that duty….”
Ward v McMaster concerned a local authority loan granted under section 39 of the Housing Act, 1966 and the regulations made thereunder. Regulations required the local authority, before making a loan, to satisfy itself as to the value of the house. The scheme it had adopted for the grant of loans was designed for persons unable to obtain loans from commercial agencies. The plaintiffs obtained a loan from the council to finance the purchase of a house, but had no professional survey carried out. The local authority engaged a valuer, who reported on the value, but they failed to engage anyone to carry out a structural survey. The house bought by the plaintiffs with the benefit of the loan turned out to be seriously structurally defective. Costello J, in the High Court, held that there was a relationship pf proximity between the plaintiffs and the local authority:

“They should have been aware that it was unlikely that the

[first named]

plaintiff (in view of his knowledge that they were going to value the premises and his very limited means) would not himself employ a professional person to examine it and so they should have known that if the valuation was carelessly done it might not disclose defects in the premises and as a result the plaintiff might suffer loss and damage.”

This reasoning also underlay the two judgments of Henchy J and McCarthy J on the appeal to this Court. Both held that there was a relationship of proximity. Henchy J, with whose judgment two other members of the court agreed, speaking of the regulations under which the local authority had acted, expressed the view at page 342 that a “paternalistic duty of that kind would not normally be imposed on a mortgagee in favour of a mortgagor...” He considered that the plaintiff was in a special position: “A borrower of that degree of indigency could not have been reasonably expected to incur the further expense of getting a structural survey of the house done.”
An attempt was made in Sunderland v Louth County Council [1990] I.L.R.M. 658 to apply the reasoning of these two cases to loss alleged to flow from the grant of a planning permission by a planning authority. The plaintiff purchased a house which had been built with the benefit of a planning permission granted by Louth County Council. Due to the unsuitable condition of the site, the house became uninhabitable. In an action for damages against the Council, McCarthy J, at page 663, speaking for a unanimous Supreme Court, distinguished the earlier cases, saying that they dealt with “provision in a social context for those who are unable to provide for themselves.” The role of the planning authority, on the other hand, was to act in “a watchdog role that is for the benefit of the public at large.” He concluded:

“The Act

[referring to the planning acts]

in conferring statutory powers on planning authorities imposed on them a duty toward the public at large. In my view, in conferring those powers, the Oireachtas did not include a purpose of protecting persons who occupy buildings in the functional area of the planning authorities from the sort of damage which the plaintiffs have suffered.”

The last case of the four is Glencar Exploration plc v Mayo County Council. That case concerned a provision included in the development plan for County Mayo prohibiting mining in a large area of the county. In earlier proceedings the High Court had held the mining ban to be invalid (Glencar Explorations plc and another v. County Council of the County of Mayo. [1993] 2 I.R. 237). The plaintiff, a mining company, had, to the undoubted knowledge of the defendant Council, spent a large amount of money prospecting for minerals in the areas affected by the mining ban pursuant to licenses granted under statutory powers. Having succeeded in having the mining ban set aside, the plaintiff sued the Council for damages. Keane C.J., speaking for a unanimous Court, held that the mining ban had been imposed for the benefit of the community as a whole. He contrasted this situation with Siney and Ward v McMaster, where each of the plaintiffs “belonged to a category of persons for whose benefit a particular statutory framework had been created and who might reasonably be said to have relied on the local authority in each case taking reasonable care in the exercise of the statutory powers vested in them.” In the following conclusive passage, at page 141, Keane C.J. held that there was no relationship of proximity between the parties, though combining this conclusion with reference to the test of whether it was “just and reasonable” that liability should be imposed. He said:

“In considering whether such a relationship of "proximity" existed and whether it would be just and reasonable to impose a duty of care on the respondent, I think one also has to bear in mind that this was not a case in which it could reasonably be said that the applicants, in incurring the expense of their prospecting activities, could be said to have been relying on the non-negligent exercise by the respondent of its statutory powers. Their position is in contrast to that of the plaintiffs in both

Siney v. Corporation of Dublin

[1980] I.R. 400 and

Ward v. McMaster

[1985] I.R. 29; [1988] I.R. 337 where, in each case, they belonged to a category of persons for whose benefit a particular statutory framework had been created and who might reasonably be said to have relied on the local authority in each case taking reasonable care in the exercise of the statutory powers vested in them. The applicants in the present case could rely on no more than a general expectation that the respondent would act in accordance with the law which is not, in my view, sufficient to give rise to the existence of a duty of care

.”

The former Chief Justice, as I have said, appears to combine his conclusion on “proximity” with the assessment of whether it would be just and reasonable to impose a duty of care. However, it is clear that he did not think that the necessary relationship of proximity existed between the plaintiffs and the planning authority. Essentially, the planning function must be exercised for the benefit of the public at large. A duty to consider the interests of a particular potential developer would potentially conflict with the duty to the public. By contrast, in both Siney and Ward v. McMaster, the performance of the duty to the plaintiffs, in each case to inspect properly, was in no sense in tension with a public duty. Rather it was consistent with and in support of the duty to look after the council’s own interests.
The learned trial judge in the present case, having noted that the damages claimed by the Respondents represented compensation for pure economic loss suffered by them stated that:

“However, while, from time to time, the courts in this country have paid lip service to the proposition that damages for an economic loss, as distinct from compensation for injury to person or damage to property, are normally not recoverable in tort, it is recognized that, in an appropriate case, damages for economic loss resulting from tort is

[sic]

recoverable.”

The learned judge went on to quote a passage from the judgment of Keane CJ on this question in Glencar, upon which the Tribunal relies. Having referred to the necessity, as a condition of liability to show a relationship of proximity, he spoke as follows, at page 134, on the question of economic loss:

“So too with the principle that no action for negligence lay in respect of purely economic loss. A major qualification of that principle was established in

Hedley Byrne & Co. Ltd. v. Heller and Partners Ltd.

[1964] AC 465 in the case of pecuniary loss caused by a negligent misstatement, but until the much discussed decision of the House of Lords in

Junior Books Ltd. v. Veitchi Co. Ltd.

[1983] 1 AC 520 it remained the law in both England and Ireland that, negligent misstatement apart, no action in negligence lay in respect of such damage.”

Returning to this issue at page 143, the former Chief Justice said:

“I would expressly reserve for another occasion the question as to whether economic loss is recoverable in actions for negligence other than actions for negligent misstatement and those falling within the categories identified in Siney v. Dublin Corporation and Ward v. McMaster and whether the decision of the House of Lords in Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 AC 520 should be followed in this jurisdiction.”

It would be difficult to say that the Respondents in the present case do not satisfy the test of proximity taken in isolation. Both landlord and tenant come into a direct relationship with the Tribunal once the latter is asked to review and determine a rent. It has only those two parties in contemplation. I would not go so far as to accept the submissions of Mr Counihan that performance of the Tribunal’s function is exclusively of interest to the parties. There is a clear public interest in ensuring that rents generally are fairly set and that the law is properly interpreted in doing so. That is confirmed by the power of the Minister to refer a point of law to the High Court, at the request of the Tribunal. Nonetheless, in reality, the only parties with a direct and real interest in the outcome of the proceedings of the Tribunal are the landlord and the tenant respectively.
I do not find any support for the exclusion of proximity from the fact that the Tribunal performs an adjudicative function. The case law on that subject, whether in the sense of the immunity from suit of judges or arbitrators proceeds from considerations of public policy. None of those cases states that there is no sufficient proximity between a person damnified by a judicial or quasi-judicial decision and the person making it. On the contrary, it seems that historically, in English law, while judges of the superior courts were immune from suit, those of inferior courts were not. To quote Lord Denning M.R. in Sirros v Moore [1975] 1 Q.B. 118, a judge of an inferior court who went outside his jurisdiction “was liable to an action for damages, even though he made an innocent mistake of law in so doing.” More relevant for present purposes is the decision of the House of Lords in Arenson v Arenson [1977] A.C. to the effect that the immunity of judges and arbitrators was an exception to the general rule that there should be liability for negligence and that there was no reason of public policy for extending to valuers appointed by mutual agreement to value property. The immunity of judges at least flows from considerations of public policy.
Consequently, I have come to the clear conclusion that the Respondents claim cannot be defeated for lack of a relationship of proximity between the Respondent and the Tribunal.
It has not been suggested on behalf of the Tribunal that it was not foreseeable that want of care on the part of the Tribunal would cause loss to the Respondents. Accordingly, it remains to consider the third question, namely whether it is just and reasonable that liability be imposed.
There is a difference of emphasis between the respective dicta of McCarthy J in Ward v McMaster and Keane C.J. in Glencar Exploration plc v Mayo County Council. In the former case, at page 349, McCarthy J said:

“Whilst Costello J. essentially rested his conclusion on the "fair and reasonable" test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.”

However, at the end of his judgment, McCarthy J found it possible, at page 352, to decide the case “…without entering into the question of whether or not it is "just and reasonable" to impose the duty…” Henchy J, at page 342, rather than positively stating that it would be just and reasonable that liability be imposed expressed the converse conclusion that it would be“unconscionable and unfair…” for the council to be allowed to escape.
Keane C.J. considered this issue very fully in Glencar. Having reviewed a number of authorities, some of which are expressly mentioned in the passage I am about to quote, he said:

“It seems to me that no injustice will be done if they

[plaintiffs]

are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J. at first instance in

Ward v. McMaster

[1985] I.R. 29, by Brennan J. in

Sutherland Shire Council v. Heyman

(1985) 157 C.L.R. 424 and by the House of Lords in

Caparo plc. v. Dickman

[1990] 2 AC 605. As Brennan J. pointed out, there is a significant risk that any other approach will result in what he called a "massive extension of a prima facie duty of care restrained only by undefinable considerations ..."

In reaching that conclusion, Keane C.J. accorded particular weight to the approach in England as summed up by Lord Bridge in Caparo plc. v. Dickman, mentioned above, at p. 617:-

"What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of 'proximity' or 'neighbourhood'

and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other."

(emphasis added)

There was some discussion at the hearing of the appeal as to whether the test of liability being “fair and reasonable” was the same as whether there was an immunity based on grounds of public interest. I believe that there is a difference. Immunity from suit, where it has been held to exist, normally proceeds from overriding considerations of public interest. Foreign sovereign States have been held to be immune from the jurisdiction of our courts (McElhinney v Williams [1996] ILRM 276). Witnesses in legal proceedings are absolutely immune from suit in respect of the evidence they give (see discussion in McMullen v McGinley, Supreme Court unreported, 15th March 2005 per Fennelly J). The immunity of judges is based on public policy considerations ( See Morris P in Desmond v Riordan [2000] 1 I.R. 505). Formerly, barristers enjoyed complete immunity from suit by their clients in respect of their conduct of proceedings. All of these are or were examples of general immunity granted a priori on grounds of public policy. The immunity is available even where all the elements of a tort are otherwise established.
The alternative formulation, namely whether it is just and reasonable that liability be imposed, on the other hand, asks whether the duty exists. It is a threshold question. It is also a more flexible formulation. It is more adaptable to the many circumstances presented in litigation and preferable for cases such as the present. This test has been adopted in most of the modern English cases, as it was by Costello J in his judgment in Ward v McMaster, and, finally, by Keane C.J. in Glencar. I also applied it in my judgment in Breslin v Corcoran [2003] 2 IR 203, with which Denham J and Murray J, as he then was, agreed. That decision was not, however, cited on the hearing of the present appeal. It did not concern the performance of statutory powers. I would emphasis that it is necessary to consider all the relevant circumstances of the case.
The duty of the Tribunal to determine a fair rent is owed, as a matter of public law, to both landlord and tenant. While this may not be determinative, it is an important element and distinguishes the case from Siney and Ward. In neither of those cases was the duty owed to the plaintiff in tension with a duty owed to another person or body. In both of those cases, the remedy in damages was the only possible remedy for the loss suffered. Each plaintiff relied on the defendant to perform a function which he or she was unable for financial reasons to perform for him or herself. Without the remedy in damages, each plaintiff would have been left without redress.
The landlord and the tenant before the Tribunal are in a quite different situation. Either the landlord or the tenant may, pursuant to section 13 of the Act, appeal on a point of law to the High Court within three months of the determination by the Tribunal. This remedy necessarily implies that the Tribunal should, as Finnegan J held, give a reasoned decision. That procedure will enable either party to have a review of the correctness of the legal approach adopted by the Tribunal.
Furthermore, either party may, as occurred in this case, obtain redress by way of Judicial Review. This remedy which extends to cases where the determination is unreasonable in the sense of the decisions of this Court in O’Keeffe v An Bórd Pleanála [1993] 1 I.R. 39 and Keegan v Stardust Compensation Tribunal [1986] I.R. 642. In the present case, the Respondents complained that the Tribunal fixed a rent significantly below that suggested in the valuers’ reports submitted by the parties. Although it did not ultimately become necessary to decide the issue, this might well have formed the basis of a distinct ground for Judicial Review. The Tribunal must act on the basis of the submissions of the parties. It would be difficult to defend a decision fixing a rent outside the parameters of the valuations submitted by the opposing parties.
Thus, by way of Judicial Review, either party has the right to apply to have a decision set aside and a new determination made. Finally, the tort of misfeasance in public office is available in the admittedly rare event that the decision can be shown to have been actuated by actual malice or mala fides.
There remains, admittedly, the possibility, as in the present case, that loss will be suffered by one party during the period necessary to have a first irregular decision rectified. The issue here is whether it is just and reasonable to impose liability. Damages, as is now well established, do not flow from the mere invalidity of a decision. (see, in particular, the dictum of Finlay CJ in Pine Valley Developments v Minister for the Environment [1987] I.R. 23; Glencar, already cited, per Fennelly J at page 148; Kennedy v Law Society and others, Supreme Court unreported 21st April 2005, per Geoghegan J). The gist of the claim is not, therefore, that the Tribunal has made an invalid decision. It is that it has committed a breach of a duty of care. But none of the headings under which Judicial Review was granted by the High Court have any necessary connection with the loss claimed. Both the failure to allow the Respondents a fair opportunity to be present at the inspection and the failure to adjourn the making of a decision to allow them to respond to the Notice Party’s valuation report are procedural failures, with no necessary link to the loss suffered. Finnegan J could not determine that there had been any actual unfairness. The essence of the loss alleged by the Respondents is that an unduly low rent was fixed and that the Respondent suffered loss of rent from the time of the original decision until a new decision was made. The failure to give reasons postdates the decision and is not causally linked.
Thus there is no necessary causal link between the failure to respect fair procedures and the losses claimed by the Respondents. But the Respondents say that the Tribunal was negligent insofar as it followed unfair procedures and that they suffered loss as a result.
The Respondents, in justifying the High Court award, must necessarily be driven to argue for the larger proposition that the Tribunal, when fixing a rent, owes a general duty of care exposing it potentially to liability in damages to either party, not merely for following unfair procedures, but also generally for lack of care when determining the amount of the rent —to the landlord, if the rent is too low; to the tenant if it is too high. As I have already said, either party will have a remedy of Judicial Review where the rent fixed is so unreasonable as to be irrational. The loss in a case such as the present will essentially consist of the consequences of delay. If such loss is recoverable, however, it is difficult to see why a landlord or tenant should be denied a remedy in damages for the negligent fixing of an unduly high or low rent respectively. It would require compelling reasons to impose liability for this kind of loss on a public authority such as the Tribunal. The Tribunal is necessarily required in every case to make a choice between conflicting submissions as to the amount of the rent. If a Tribunal were exposed to potential claims from either landlord or tenant where it favoured the submission of one over the other, it might tend towards compromise in every case. I believe that the independence of the Tribunal would potentially be compromised by the existence of such a remedy. As counsel for the Tribunal has pointed out, the imposition of such liability on the Rent Tribunal, would have implications for a wide range of public bodies performing adjudicative functions. For present purposes, the most closely analogous cases are of those bodies which determine, as between contending parties, amounts to be paid as purchase money or for compensation, such as the property arbitrators, the Employment Appeals Tribunal or An Bórd Pleanala.
It is not, I believe, necessary to review the law regarding the immunity of judges, though I have already mentioned the decision of the Court of Appeal in England in Sirros v Moore. This heading of immunity has been considered by the High Court in Deighan v Ireland [1995] 2 I.R. 56 and Desmond v Riordan [2000] 1 I.R. 505. A more directly relevant authority may be the English Court of Appeal decision in Jones v Department of Employment [1989] 1 Q.B. 1, where a social welfare adjudication officer was held not to be liable in negligence. Glidewell L.J. said at page 22:

“Having regard to the non-judicial nature of the adjudication officer’s responsibilities, and in particular to the fact that the statutory framework provides a right of appeal which, if a point of law arises, can eventually bring the matter to this court, it is my view that the adjudication officer is not under a common law duty of care.”

The decision in Jones v Department of Employment did not turn directly on the adjudicative character of the decision. However, arbitrators were generally considered to be immune from suit in negligence in England prior to the introduction of statutory immunity by section 29 of the Arbitration Act, 1996. The distinction made by the House of Lords in Arenson v Arenson, already cited related to a valuer engaged to fix a price to bind two parties by agreement. Such a valuer would not be immune from suit. The majority of the House of Lords accepted, by contrast, that an arbitrator would be immune. This seems implicit in the speech of Lord Simon of Glaisdale, pages 424 to 425, Lord Salmon at page 436 and Lord Fraser of Tullybelton at page 441. In giving his reasons for declining to strike out the claim against the defendants, Lord Salmon said that it would be open to the respondent at the hearing of the action “to show that their role was a judicial one……so that they were appointed arbitrators………If the respondents succeed in this, they can claim immunity.” I think the Rent Tribunal performs a role akin to an arbitrator. The fact that it was assigned a task formerly performed by the District Court tends to confirm the judicial character of its decisions.
Whether it would be just and reasonable to impose a duty of care sounding in damages for negligence on the Tribunal should be considered having regard to all the circumstances of the particular relationship. The need for a remedy in damages must take account of the extent of other available remedies and the nature of the loss alleged. I have already mentioned that each party has a potential remedy by way of appeal on a point of law to the High Court, the full range of remedies by way of Judicial Review to correct errors of law or procedure made by the Tribunal, including, in extreme cases, determinations of the amount of rent, and finally the remedy of misfeasance in public office in the admittedly rare cases where actual malice or recklessness amounting to malice can be established. In this situation, the possibility of severe irremediable loss is limited.
Against this background, I believe that two considerations work against the imposition of liability. Firstly, this does not appear to be the sort of case of reliance on the behaviour of the other party which would justify departure from the normal reserve in respect of damages for pure economic loss. In both Siney and Ward v McMaster, the Court found that the plaintiff had relied on the local authority to perform a particular function. Secondly, I believe the Tribunal performs a role akin to that of an arbitrator; the existence of a remedy in damages might tend to compromise the independence of the Tribunal by inhibiting its judgement in performing its essentially adjudicative role.
Geoghegan J agrees that the appeal should be allowed. However, he proceeds on the broader basis that statutory tribunals such as the Rent Tribunal enjoy immunity from suit in negligence at common law. This immunity would be based on an analogy with the immunity of judges as described in the speech of Lord Kilbrandon in Arenson v Arenson, cited above and the judgment of Lord Denning M.R. in Sirros v Moore. I see great force in these arguments. Indeed, as Geoghegan J points out, they overlap to a significant extent with my own reason for finding the Tribunal not to be liable. However, I hesitate to go so far, certainly on the facts of this case.
I believe that both the material and the personal scope of any immunity would need very careful consideration.
I would, therefore, restrict myself to stating that I do not consider it just or reasonable to impose liability on the Tribunal in negligence in the circumstances of this case. I would, therefore, allow the appeal, set aside the order of O’Donovan J and substitute an order dismissing the Respondents’ claim for damages.

Judgment of Mr Justice McCracken delivered on the 21st day of October 2005.
___________________________________________________________

I have had the benefit of reading in draft the judgment handed down by Fennelly J and it is unnecessary for me to deal further with any of the factual elements of the case. I am in full agreement with his conclusion that there is sufficient proximity between the Respondents and the Appellant, for the reasons he has set out, to satisfy the test of proximity necessary to constitute the tort of negligence. I also agree that a further element of the tort of negligence is that it should be “fair and reasonable” that liability should be imposed, and that in the present case that test is not satisfied.

I would, however, wish to comment on what is in my view the basis upon which it would not be fair and reasonable to impose liability in the present case.

There has been some confusion in this case as to whether, quite apart from the question of it being fair and reasonable that liability should be incurred, there may also be a separate basis upon which liability cannot arise, namely that of immunity based on public policy. The Appellant is a creature of statute, and it was always open to the Oireachtas to provide specifically in the legislation setting up the Appellant that the Appellant should be immune from liability in respect of its conduct of its hearings or in respect of its decisions. The Oireachtas chose not to take that course.

Before considering the authorities on the question of immunity, I should express my strongly held view that the Appellant is not merely a body which adjudicates on a dispute between the parties before it. The relationship of landlord and tenant in all its aspects has been the subject of evolving legislation for over a century. Parallel to and complimenting such legislation has been the provision made by the State for housing owned by public bodies such as local authorities. Legislation relating to the private sector has changed over the years in accordance with the social needs of the time, but has always sought to balance the requirements of citizens to be housed against the property rights of landlords. The Courts have also played a leading role in such balancing exercise as, for example, in the decision in Blake & Ors v Attorney General [1982] IR 117. The setting up of the Rent Tribunal under the Housing (Private Rented Dwellings)(Amendment) Act 1983 was part of the continuing process of regulating the relationship between landlord and tenant. This relationship does not enure solely for the benefit of individual landlords and individual tenants, but rather in the public interest that there should be proper control of housing in all its aspects.

In Pine Valley Developments Ltd v Minister for the Environment [1987] IR 23, Finlay CJ quoted with approval a passage from the speech of Moulten LJ in Everett v Griffiths [1921] 1 AC 631 at page 695 as follows:-

“If a man is required in the discharge of a public duty to make a decision which affects by its legal consequences the liberty or property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of his duty to the public, and then to leave him in peril by reason of the consequence to others of that decision, provided he has acted honestly in making that decision.”

Finlay CJ then added his own comment at page 38 of the Pine Valley decision as follows:-

“I am satisfied that it would be reasonable to regard as a requirement of the common good an immunity to persons in whom are vested statutory powers of decision from claims for compensation where they act bona fide and without negligence. Such an immunity would contribute to the efficient and decisive exercise of such statutory powers and would, it seems to me, tend to avoid indecisiveness and delay, which might otherwise be involved.”

That passage might seem to suggest that any immunity on the basis of public policy would only arise in the absence of negligence, and would seem to treat the question of immunity quite separately. This passage was quoted with approval by Keane CJ in Glencar Explorations Plc & Anor v Mayo County Council (No 2) [2002] 1 IR 84, no comment was made on the words “without negligence”. Instead, Keane CJ said at page 128:-

“I am satisfied that those considerations also apply to the present case. The remedy available to persons affected by the commission of an ultra vires act by a public authority is an order of certiorari or equivalent relief setting aside the impugned decision and not an action for damages, to allow which, in the case of public officials, would be contrary to public policy for the reasons set out by Finlay CJ in the passage just cited.”

Notwithstanding this, it was held by this Court in the Glencar Exploration case that the decision by the defendants in that case was in fact made negligently in the sense that the respondent did something which no reasonable authority would have done. Effectively, Keane CJ found in that case that there had been negligence in the sense of lack of care, but that there was no duty of care. I prefer the approach of Fennelly J who in the course of his judgment in the Glencar case, after quoting the findings of the learned trial Judge in that case, said at page 154:-

“This approach, by making findings of negligence before determining whether a duty of care exists, risks reversing the correct order of analysis. … The elements of the tort of negligence are the existence of a duty of care, lack of proper care in performing that duty and consequential damage. The lack of care which we commonly call negligence consists in commission or omission of acts. In order to be actionable, the acts or omissions must be such as will reasonably foreseeably cause damage to any person to whom the duty is owed. Mere causation is not enough. As a matter of principle, it seems to me that the failure to exercise due care can only be established by reference to a recognised duty.”

While it is often expressed that the question should be asked whether it is just and reasonable that there should be liability imposed for certain actions, it seems to me that the more correct approach is to ask whether it is just and reasonable that there should be a duty of care, which, as Fennelly J points out in the passage just quoted, is one of the basic elements of the tort of negligence. What can be gleaned from the various decisions is that there are circumstances in which, for reasons of public policy, it would not be just and reasonable to impose a duty of care. What is to be considered as just and reasonable is not merely what would be just and reasonable as between the parties, but also what would be just and reasonable in the public interest. Where a public body, such as the Appellant in the present case, performs a function which is in the public interest, then in many cases, and I believe this to be one of them, that body ought not to owe a duty of care to the individuals with whom it is dealing. It is in the public interest that it should perform its functions without the fear or threat of action by individuals. The fact that it is performing a function which is in the public interest may outweigh any duty of care to private individuals. Whether it does or not, of course, is a matter for decision based on consideration of the position of any particular public body.

Arguments were addressed to the Court based on the general principles relating to the duty of care as set out in Siney v Dublin Corporation [1980] IR 400 and Ward v McMaster [1988] IR 337. Those cases dealt with the general liability of certain public bodies to individuals with whom those bodies were dealing on a one to one basis. In my view they are of limited application in the present case, save in relation to very general principles. The Appellant here was not just dealing with one individual or set of individuals, namely the Respondents, but was determining the conditions of the relationship between the Respondents and the Notice Party.

It is instructive to note that under regulation 6(6) of the Housing (Rental Tribunal) Regulations 1983, which were made under the 1983 Act, it is provided that the Chairman of the Appellant when determining the membership of a division of the Appellant to hear any particular case “shall, insofar as it is practicable, appoint as a member of the division a person who has knowledge of, or experience in, the valuation of properties”. It is clear, therefore, that while it was considered desirable that there should be one member of a particular division hearing any particular appeal who might be classed as an expert, there was no requirement that the majority of the members in any particular case should be experts. The Appellants, in determining any case, are acting more in the nature of arbitrators than of experts. While they are not judges, and therefore cannot be acting in a strictly judicial capacity, nevertheless their function is adjudicative. Where a body set up by statute performs an adjudicative function between citizens, in any particular case this is a factor which must strongly influence the determination of whether it is in the public interest that such a body should owe a duty of care.
I do not think it is correct to say that it is public policy to grant immunity to all such bodies in the absence of immunity being granted by statute. Nor do I think that such immunity is a matter of common law, save in so far as the tort of negligence is a matter of common law. I do not believe that there can be a general common law principle of immunity for statutory bodies such as the Appellant in all cases in the absence of mala fides or misfeasance in public office. Absolute immunity is a matter for the legislature which created these public bodies. However, public policy or considerations of the common good are clearly very important factors in determining whether it is just and reasonable that a duty of care should exist in any particular case, but they are not the only factors. Other considerations would include the nature and functions of the particular body, the nature and expertise of its members and the extent to which there is a public policy element to the nature of its decisions, to name just a few. In the present case I have no doubt it would not be fair and reasonable to impose liability, taking these considerations into account.

Accordingly, I also would allow this appeal and dismiss the Respondent’s claim for damages.

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	Supreme Court of Ireland Decisions
You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Beatty -v- The Rent Tribunal [2005] IESC 66 (21 October 2005) URL: http://www.bailii.org/ie/cases/IESC/2005/S66.html Cite as: [2006] 1 ILRM 164, [2006] 2 IR 191, [2005] IESC 66