Shannon Preservation and Development Co. Ltd. v. E.S.B. [2000] IEHC 136 (21st July, 2000)

Judgment of O’Sullivan J delivered the 21st day of July, 2000. 1. The Defendant has brought a motion seeking to have the Plaintiff’s claim struck out on the basis that it discloses no reasonable cause of action or that the pleadings are frivolous and/or vexatious or alternatively stayed on these grounds and in doing so relies both on Order 19, Rule 28 of the Rules of the Superior Courts and on the inherent jurisdiction of this Court. In the alternative, an Order is sought requiring the Plaintiff to furnish security for costs and in this regard reliance is placed on Section 390 of the Companies Act, 1963 and also on Order 29, Rule 1 of the Rules of the Superior Courts. 2. The Plaintiff is a company limited by guarantee. There are six subscribers to the Memorandum of Association each of whom is said to represent an unincorporated fishing club or association. The principle object of the company is, where relevant:- “To engage in the development, management and care of commercial and recreational fishing and angling on the River Shannon, its lakes and tributaries and to represent interested members of the adjacent communities in the preservation, protection and improvement of the amenities and environment in the locality and to take such legal or other actions as may be considered necessary or desirable to promote such interests...” 3. The Defendant is the national electricity supplier so established by statute. By Section 8 of the Shannon Fisheries Act, 1935 it is provided:- “In addition, but subject and without prejudice to, the primary function of maintaining, working, and developing the Shannon hydroelectric works under and in pursuance of the Act of 1927 as amended or extended by subsequent legislation, the Board shall have and perform the duty of managing, conducting, and preserving the Shannon fisheries under and in accordance with this Act.” 4. By the same Act the Defendant was given the option of acquiring fishery rights in the Shannon River and by Section 5 of the Shannon Fisheries Act, 1938 “....every fishery and every fishing right in and over the waters of the River Shannon above the weir known as Corbally Mills....” were vested in the Defendant. I have been told that there has been no challenge to this section since but, notwithstanding this, Counsel for the Plaintiff has advanced an argument to the effect that the Plaintiff or its members have a prospect in the future of acquiring some proprietorial rights in fisheries on the Shannon River having regard to the purview of Section 5 of the Act of 1938. 5. The main case made by the Plaintiff is that the Defendant has failed to perform its duty of managing, conducting and (especially) preserving the Shannon fisheries and an affidavit has been sworn deposing to the general decline in the quality and pollution of the waters in the river, the reduction in the numbers of fish and in the case of some species their loss. The Defendant denies this but submits that if it has occurred it has not been caused by a breach of its duty as alleged. 6. In the case, therefore, there will be issues of fact relating to the depletion and/or loss of certain species, the cause of such loss or depletion and there will be an issue of law as to the relationship between the duty of the Board to manage, conduct and preserve the Shannon fisheries and its “ primary function ” of maintaining, working and developing the Shannon hydroelectric works. 7. In this motion the Defendant has submitted forcefully that the Plaintiff company does not have locus standi to maintain this action. I will return to this issue shortly. 8. The Defendant has further submitted that the pleadings disclose no cause of action and that they are frivolous and vexatious. 9. Leaving aside the question of locus standi , it seems to me without disrespect to these submissions that the Plaintiff’s claim seeking a declaration that the Defendant is in breach of its statutory duty as aforesaid and for appropriate injunctive relief does indeed disclose a cause of action and in light of the evidence adduced on affidavit to which I have alluded such a claim could not said to be frivolous or vexatious otherwise, of course, than in the context of the locus standi point itself. 10. It seems to me therefore that the first part of the Defendant’s motion (that is other than the alternative claim for security for costs) must stand or fall on the locus standi point. Locus Standi 11. It is fair to say that the view expressed obiter by Lynch J in Malahide Community Council -v- Fingal County Council , (1997:3:IR:383) and reiterated by him in Lancefort Limited -v- An Bord Pleanala , (1998:2:ILRM:401) to the effect that a company being an artificial body lacking the five senses of human persons and therefore incapable of being adversely affected by planning decisions except insofar as these might increase or diminish the value of its assets may not on that account alone have locus standi to maintain proceedings based on environmental as distinct from economic grounds, has not been accepted by the majority of judges in both the Supreme and High Court decisions which followed Malahide . 12. On the contrary, the approach first subsequently adopted by Morris J (as he then was) in Lancefort eschewing such a complete reliance on the “ artificial personality ” point, which approach was explicitly followed by McGuinness J in Blessington Heritage Trust Limited -v- Wicklow County Council & Anor ., (unreported: 21st January, 1998) and Wicklow Heritage Trust Limited -v- Wicklow County Council , (unreported: 5th February, 1998) represents the preponderance of judicial opinion and, crucially, has been in principle adopted by the Supreme Court in its judgment in Lancefort (1998:2:ILRM:401). At pages 441/2 Keane J (as he then was) delivering the majority judgment said:- “I do not arrive at the conclusion that the appellant lacked standing solely because of the fact that it is a company limited by guarantee owning no property affected by the permission. I would accept, as a general proposition, that such bodies may be entitled to locus standi in proceedings of this nature, although they cannot point to any property or economic interest being affected by the relevant decision. In Blessington Heritage Trust Limited -v- Wicklow County Council, High Court , 1997, No. 101 JR (McGuinness J) 21st January, 1998, McGuinness J said of companies such as the appellant (at page 34):- ‘Blanket refusal of locus standi to all such companies may tip the balance too far in favour of the large scale and well resourced developer.’ I would agree with that approach, although not with its application by the learned High Court Judges in the present case.” 13. The passage in which the above short excerpt from the judgment of McGuinness J in Blessington Heritage Trust appears is as follows:- “In cases like the instant case it may well be argued, as it was in the Lancefort case, that companies such as the applicant company have been incorporated simply to afford the true applicants ‘a shield against an award of costs’ to use the words of the learned Morris J. I have no doubt that this is a relevant factor and one which must cause concern to a developer such as the Notice Party. However, it could also be argued that in cases such as the present the individual member of the public may in practice be denied access to the Courts - or at least have that access made much more difficult - by the danger of an award of costs against him in a case where his opponent is a large development company with resources which enable it to pursue lengthy and costly litigation with comparative impunity. Over reliance on the incorporation of companies such as the applicant in this case may tip the balance too far in favour of objectors or concerned local persons: on the other hand blanket refusal of locus standi to all such companies may tip the balance too far in favour of the large scale and well resourced developer. It seems to me that the balance is best preserved by the course followed by the learned Morris J. The Court should look at the factual background in each case and, if necessary, maintain the balance by the making of an Order for security for costs. I therefore conclude that the applicant company has locus standi to maintain the present proceedings.” 14. As I have noted, that approach found favour with the majority of the Supreme Court in the Lancefort appeal, albeit its application in that case by the High Court Judges was not approved. 15. In stating his conclusions on the locus standi issue, Keane J (as he then was) in Lancefort not only accepted as a general proposition that companies limited by guarantee owning no property affected by a challenge to planning permission may be entitled to locus standi in proceedings of this nature but further accepted that there may be circumstances in which it would be wrong in principle to deny standing to such a body even though it was not in existence at the time of the impugned decision. 16. In considering the issue he was prepared to assume in favour of the persons concerned in the formation of the plaintiff company in Lancefort that they were genuinely concerned to ensure that good planning decisions were made in Dublin and elsewhere and that they incorporated the appellant with that objective in mind. He considered that the case being made was merely formal or technical and without substance in actual environmental terms and cited with approval the English decision in R. -v- Inspector of Pollution Ex. P. Greenpeace Limited (No. 2), (1994:4:AER:329) where a challenge to the locus standi of Greenpeace was rejected by a Court which pointed out that they had a genuine interest in the matter raised and had 2,500 supporters in the area of the plant who might not otherwise have an effective means of bringing their concerns before the Court. 17. Whilst acknowledging the concern of potential defendants that plaintiff companies can be formed “ ... simply to afford residents’ associations and other objectors immunity against the costs of legal challenges” , Keane J (as he then was) went on to say:- “Our law, however, recognises the right of persons associating together for non-profit making or charitable activities to incorporate themselves as limited companies and the fact that they have chosen so to do should not of itself deprive them in every case of locus standi . While shielding the members against an Order for costs in the event of the company becoming involved in litigation may well be a consequence of limited liability, it is not necessarily the only reason why citizens concerned with issues as to the environment may decide to incorporate themselves as a company. It must also be remembered, that, in the case of such a company, the High Court may order security for costs to be provided...” 18. The foregoing citations set out, I believe, the principles which I must apply in considering the present application. 19. The evidence on Affidavit for the Plaintiff is that the fishing clubs and organisations represented by the Plaintiff company in the manner I have already described “ ... comprise a total of well over 2,000 anglers who I say on a daily/weekly basis carry out not just fishing activities on the Shannon but are involved in all aspects of seeking to preserve, promote and develop the fishing activities on the Shannon for a very considerable period of time”. Two of the six subscribers to the Memorandum are stated to have express authorisation from the Defendant to carry out eel fishing activities on the River Shannon and other members of the Plaintiff company are stated to have salmon fishing licences from the Defendant. It is stated that the company was formed to avoid the necessity of bringing proceedings with 2,000 anglers making the application in their own name and it is explicitly averred that the with the backing of 2,000 individuals that the Plaintiff company fully intends to discharge any Costs Order that may be made against (it). 20. It is clear in my view that the case made in these proceedings differs from that under consideration in Lancefort in that a very real and substantial environmental issue is directly raised by the Plaintiff in the present proceedings whereas Keane J (as he then was) observed in Lancefort that:- “... It has not been shown that this (alleged illegality) had the slightest adverse effect on the attainment of the objectives of the directive and the regulations which implemented it in this State.” 21. Insofar, therefore, as it is appropriate to examine the merits of the case when considering the locus standi of the plaintiffs to make it, the present case can be clearly distinguished from that of the applicants in Lancefort . 22. It may be said that the Plaintiff company itself cannot have a lengthy “ history ” of environmental involvement since it was only formed on the 6th October, 1999 some seven weeks prior to the initiation of these proceedings. It is clear, however, that the individuals behind the company have a longer involvement and are supported by in excess of 2,000 individuals who clearly have a long history of environmental involvement and interest in the issues raised in this case which in turn directly concern matters of substantial environmental public as well as private interest. 23. I must conclude, therefore, that the Plaintiff does have locus standi and accordingly reject the Defendant’s primary submission on this motion. 24. With regard to the Defendant’s alternative claim for an Order directing the Plaintiff to provide security for costs, I note that the Plaintiff is a company limited by guarantee and I assume that these are not open or unlimited guarantees since if that were the case I would inevitably have been so informed in the able submission of their Counsel. 25. Not only, therefore, would I accede to this alternative application of the Defendant in the exercise of my discretion, but I should make it clear that in reaching my conclusion on locus standi I have borne in mind the fact that an application is being made by the Defendant in the alternative for just such an Order. 26. Accordingly, I decline to dismiss the Plaintiff’s claim as sought by the Defendant but direct the Plaintiff to furnish security for costs and put a stay on all further proceedings until such security has been so furnished. © 2000 Irish High Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII