Farmer wins appeal against IDA bid to acquire lands

A Supreme Court ruling in favour of a farmer whose home and lands the Industrial Development Authority wanted to acquire by way of a compulsory purchase order (CPO), will not affect CPOs generally, according to legal sources.

Thomas Reid had sued both the IDA and the State after the IDA decided to compulsorily acquire his 72-acre property, consisting of farm land and the Reid family home at Blakestown in Co Kildare. The family have lived on the farm for more than a century.

Mr Reid, who does not want to sell his land, claimed the IDA’s decision to acquire his farm was flawed and unfair. He claimed it breached his property rights as well as his rights under the Constitution and European Convention of Human Rights.

Mr Reid's land, which the IDA wants for potential new development, adjoins the Carton House Estate and the Intel site in Leixlip.

The IDA argued it was entitled to acquire Mr Reid’s lands under Section 16 of the 1986 Industrial Development Act.

Encouraging development

In a High Court judgment in 2013, Mr Justice John Hedigan found the proposed compulsory purchase was provided for by law and was clearly intended to achieve the IDA's objective of encouraging industrial development in Ireland. The judge also ruled that, in its dealings with Mr Reid, the IDA adopted every fair procedure possible.

The decision was appealed to the Supreme Court, where the IDA opposed the appeal.

In the appeal Pat Butler SC, for Mr Reid, argued that the procedure being used by the IDA differed from that used by local authorities in their CPOs, where the affected parties are allowed go to An Bord Pleanála to have the order reviewed.

In his action, Mr Reid (53), of Hedsor House, Blakestown, Maynooth, Co Kildare, sought orders quashing the IDA's decision of November 23rd, 2012, to compulsorily acquire his home - a house dating back to the 1760s.

Mr Reid argued sections of the 1986 Industrial Development Act which the authority said gave it the power to acquire Mr Reid’s lands are unconstitutional.

He claimed there must be evidence that development is to take place on the land before the IDA can acquire it.

He further claimed fair procedures had not been followed and the IDA had failed to give reasons for its decision to acquire the land. The decision, it was also argued, lacked proportionality.

The State and the IDA rejected claims that the process to acquire the lands was flawed or that Mr Reid’s rights were breached.

Unanimous decision

In a unanimous decision, a five-judge Supreme Court consisting of Chief Justice Susan Denham, Mr Justice Donal O'Donnell, Mr Justice William McKechnie, Ms Justice Mary Laffoy and Mr Justice Peter Charleton overturned a High Court decision of 2013 that dismissed Mr Reid's case.

Giving the court’s judgment, Mr Justice McKechnie noted the IDA is one of just two substantial bodies where the legislature has not adjusted “outdated practices” so as to bring them more in conformity with “more enlightened” approaches to providing protection for personal property rights.

Mr Justice McKechnie said the making of the compulsory purchase order on November 14th, 2012, in respect of Mr Reid’s lands was made in excess of the IDA’s powers under the 1986 Act.

Questions the court had to consider included whether the IDA had power to assemble a landbank otherwise than by agreement and in a situation where it had not identified the industrial user to ultimately benefit from the acquisition.

The judge ruled Section 16 of the 1986 Act does not confer any power on the IDA to acquire lands not required for immediate use, but which might be utilised at some future time.

There would have to be an express statutory provision to that effect, and neither the 1986 Act or any other statutory enactment contained such a provision.

Given the constitutional protection of property rights, the 1986 Act could not be read in the manner suggested by the IDA, “even through the process of implication”, he found.

Preconditions not satisfied

The judge also ruled specified preconditions in Section 16 allowing for the IDA to exercise powers to compulsorily purchase Mr Reid’s lands had not been satisfied.

Mr Reid was also entitled to have the decision to compulsory acquire the lands set aside due to objective bias on the part of the IDA which, the judge noted, was the only body involved from start to finish in the decision to CPO the land.

In cases like this, the best way to resolve disputes was to separate the decision-making process between the policy driver and the acquisition decider, he said.

The desirability of achieving this separation of function is becoming more evident, he said. There are only a handful of statutory regimes where some external body is not involved in the ultimate decision of the process, he noted.

The fact the State has incorporated the European Convention of Human Rights into domestic law may well influence future decisions on the constitutionality or compliance under the ECHR of a statutory scheme such as the one in this case, he added.

Legal sources said that because Mr Reid’s case was that the law being used by the IDA did not allow for an independent review, the Supreme Court ruling would not have a more general effect on CPOs.

It was the first time the IDA had sought to use its CPO powers, under legislation dating back to the 1980s.

Independent review

The procedures used by local authorities, under which a huge number of CPOs are made every year to allow for construction of roads and houses, allow for an independent review.

While no costs order has yet been made in the case, it is expected Mr Reid will have his costs paid by the IDA and the State, which were represented by James Connolly SC and Dermot Flanagan SC.

The IDA will now have to have its powers amended by statute if it is to have the power to compulsory purchase land, sources said.

Afterwards a delighted Mr Reid shook hands with his legal team.

All outstanding matters, including liability of legal costs, will be decided at a later date.