Supreme Court dismisses appeal refusing stay pending EU Commission proceedings due to unproven risk of conflicting decisions.

THE SUPREME COURT

2008/103

Murray C.J.

Denham J.

Hardiman J.

Geoghegan J.

Fennelly J.

Between

MARY O’ LEARY & OTHERS

ApplicantS / AppellantS

-v-

AN BORD PLEANALA, IRELAND AND THE ATTORNEY GENERAL

RESPONDENTS

AND

INDAVER NV, TRADING AS INDAVER IRELAND & OTHERS

NOTICE PARTY

AND

THE SUPREME COURT

2008/106

BETWEEN

RINGASKIDDY AND DISTRICT RESIDENTS’ ASSOCIATION LIMITED

APPLICANT/APPELLANT

-v-

ENVIRONMENTAL PROTECTION AGENCY

IRELAND AND THE ATTORNEY GENERAL

RESPONDENTS

AND

INDAVER NV, TRADING AS INDAVER IRELAND & OTHERS

NOTICE PARTIES

DECISION of the Court delivered on the 31st day of July 2008 by Murray C.J.

This is an appeal by the applicants in the two above mentioned proceedings against an order of the High Court refusing their

application for the stay or adjournment of each set of proceedings pending the outcome of potential proceedings being brought by

the Commission of the European Union in the Court of Justice of the European Communities against Ireland for an alleged failure to

correctly transpose Council Directive 85/337/EEC, as amended. (The EIA Directive).

Background

In the first set of proceedings the appellants challenge the decision of the first respondent (“the Board”) of 15th March 2004 to grant

planning permission for a development consisting of a waste incinerator to be operated at Ringaskiddy, Co. Cork, by the notice party,

Indaver NV. In that case the appellants were granted leave to challenge that decision on a wide range of grounds by an order of the

High Court dated the 24th January 2005. That order granted the appellants leave to seek judicial review on a total of 41 specified

grounds set out in their application. Among those grounds is a claim that the decision to grant planning permission is invalid because

the Board failed to carry out an integrated assessment of the project as required by the provisions of the EIA Directive, which failure,

it is alleged, stemmed from the State’s failure to properly transpose the provisions of the EIA Directive into a domestic law. Apart from

those grounds there appears to be at least thirty other grounds which are relied upon by the appellants which are not related to

those issues.

In the second set of proceedings the applicant/appellant seeks to set aside a decision of the first respondent (“the EPA”) of the 24th

November 2005 to grant a waste licence to Indaver to carry out certain waste activities at the site in Ringaskiddy. Again among the

grounds relied upon to challenge that decision is a contention that as a result of the State’s failure to properly transpose the

provisions of the EIA into national law the decision was invalid. Again the applicants/appellants seek to challenge the validity of the

decision on a multiplicity of grounds only some of which relate to the transposition of the Directive into national law.

Apparently the question of fixing a date for the hearing of these proceedings had originally been adjourned on the application of the

State, with the support of the Board and the EPA, pending the outcome of an appeal then pending before this Court in proceedings,

namely, Martin -v- An Bord Pleanala & Others (Record Nos. 531 and 535/2004). The Board, the State and Indaver were parties to the

latter proceedings. The reasons given at the time of the adjournment of these proceedings on the application of the State was that

in the Martin case issues had been raised as to whether the State had correctly transposed the EIA Directive and those issues would

be determinative of some of the issues in the current proceedings. It is not clear whether the appellants in the two current sets of

proceedings acquiesced to that adjournment but in any event, the adjournment having been granted, they did not appeal against the

adjournment and they appeared to have been then content to await the determination of the issues, as they arose, in the Martin

appeal. On 10th May 2007 this Court gave its judgment in the Martin case (2007 2 ILRM 401). The Court held that the particular

grounds upon which it had been claimed that the EIA Directive had not been properly transposed into Irish law were not well founded

and dismissed the challenge to the validity of the planning decision given in that case.

Following the decision of this Court in the Martin case, steps were taken to bring on these cases for hearing, both proceedings being

re-entered in the High Court list by Indaver on 23rd July 2007. The appellants in both sets of proceedings envisaged that they would

proceed to hearing on the basis that the decision of this Court in the Martin case would be binding to the extent that it governed

issues in this case concerning the transposition of the Directive into national law.

The appellants altered their position and decided to seek the adjournment of these cases on learning, in October 2007, that the

Commission had decided to institute proceedings against Ireland pursuant to Article 226 of the Treaty in connection with an alleged

inadequate transposition of the Directive into Irish law. The appellants have referred to the relevant portion of a press release issued

by the Commission appropos that decision which was as follows: “The Commission considers that because of weaknesses in Irish

legislation splitting decision making between Irish planning authorities and Ireland’s Environmental Protection Agency, there are risks

that outcomes required by the [EIA Directive] will not always be achieved. When decisions are being taken on proposed incinerators

and other industrial projects, for example, Irish rules do not guarantee the interaction such as those between controlled measures

and the landscape will be adequately assessed and taken into account. In its response to the Commission’s June 2007 final written

warning, Ireland strongly defends its project approval procedure.”

The appellants state that they had become aware that a reasoned opinion had been notified by the Commission to the State on or

about the 29th June 2007 and that the State had responded to same and the Commission, having considered the response, had

decided to institute proceedings pursuant to Article 226.

Because the Commission had taken a decision to bring proceedings against the State for alleged inadequate transposition of the EIA

Directive into national law the appellants in these proceedings applied to the High Court to have the proceedings adjourned pending

the outcome of proceedings brought by the Commission although no proceedings have actually been commenced by the Commission.

The general basis on which the appellants have sought, in the High Court initially and in this Court on appeal, an order adjourning

these proceedings is the need to avoid a potential conflict of decisions between our Courts in this case and a decision of the Court of

Justice if the Commission were to succeed in its proposed proceedings.

Reasoned Opinion

The appellants initially took steps to obtain a copy of the Reasoned Opinion of the Commission of 29th June 2007 but did not pursue it

to a final conclusion when, apparently, Counsel for the State accepted that the issues which were raised in the Reasoned Opinion or

Opinions of the Commission included issues which are the same as the transposition issues made by the appellants in these

proceedings. It transpired in the course of this appeal that the Reasoned Opinion of 29th June 2007 was not treated as a stand alone

Opinion by the Commission for the purposes of Article 226 but that it is a second or addendum to an earlier Reasoned Opinion which

had been delivered by the Commission to the State in connection with the transposition of the said Directive as amended. It was

apparently in the light of the first Reasoned Opinion and the second Reasoned Opinion that the Commission finally made its decision to

initiate the proceedings as announced.

In fact the first Reasoned Opinion of the Commission had been referred to in the Martin proceedings and the State strongly contended

that the Commission’s Opinion was based on a misinterpretation of Irish law. However, the function of the Court in the Martin case

was to decide the issues raised and argued by the appellant in that case and the Court did not review or make any comment on the

Opinion.

In any event all that is before the Court for the purposes of this application is the press release issued by the Commission following its

decision to bring proceedings. No proceedings have yet been brought. Neither has the Court seen the Reasoned Response of the

State to the Commission’s first or second Opinion or any final assessment by the Commission of the State’s responses.

Arguments of the Parties

In the circumstances of the case the Court considers that it is sufficient to set out in general and summary form, but not

comprehensively, the arguments of the parties on the issue raised in this appeal, namely, whether there should be an adjournment of

these proceedings pending the outcome of potential proceedings of the kind referred to above being brought by the Commission

against the State.

The Appellants

It was submitted that the national courts of the member states have a duty to take such steps that are open to them to avoid a

conflict between decisions of the national courts and those of the Court of Justice and that where, as here, there are proceedings

pending before the national courts which could potentially conflict with proceedings before the Court of Justice then the national

proceedings should be stayed pending the outcome of those before the Court of Justice in deference to the primacy of community law

and the Court of Justice as the ultimate authority for the interpretation of community law.

In support of this general proposition the appellants relied, inter alia, on Article 10 of the EC Treaty (duty of member states to

facilitate the achievement of community tasks and objectives); the decision of the Court of Justice in Masterfoods –v- HB Ice Cream

Limited 2000 ECR I.- 11369 and a number of other cases decided in this country such as Friends of the Irish Environment case and

Kingdom of Belgium –v- Ryan Air Limited.

The appellants submitted that since the Martin case was determinative of a number of issues which they had raised in the current

proceedings, the High Court when hearing the present proceedings would be bound by the decision of the Court on those issues. If

they were to appeal the issues to this Court they would again be ruled by the decision in the Martin case. All this would mean that

the appellants would have been deprived of any reliefs to which they were entitled by reason of any incorrect transposition of the EIA

Directive should the Commission succeed in the proceedings which it says they will bring against Ireland.

The appellants argued that, as a matter of community law, the obligation on national courts to avoid the risk of conflicting decisions

is a wide one and applied to the circumstances of these proceedings. In relying in particular on Masterfoods the appellants cited, inter

alia, the following passage from that judgment; “When the outcome of the dispute before the national court depends on the validity

of the Commission Decision, it follows from the obligation of sincere co-operation that the national courts should, in order to avoid

reaching a decision that runs counter to that of the Commission, stay proceedings pending final judgment in the action for

annulment by the community courts unless it considers that, in the circumstances of the case, a reference to the Court of Justice

for a preliminary ruling on the validity of the Commission Decision is wrong.”

The appellants, of course, acknowledged that that was a decision in the field of competition law where the decision of the

Commission has a particular and binding legal status. In this case all the Commission has done is to form an opinion, contested by the

Government, that transposition of the Directive has been inadequate. Although that is not in any sense a binding decision the

appellants nonetheless argue that the reasoning of the Court of Justice in the Masterfoods case was such as not to confine the

principle of avoiding conflicting decisions to cases in which the Commission has reached a decision on a competition matter but

extended to proceedings such as a risk of conflict between a decision in these cases and the possible outcome of the Commission

proceedings before the Court of Justice.

The ultimate submission of the appellants is that, according to community law, if it appears to the Court that there is a substantial

risk of a conflict of decisions on issues in proceedings pending before the High Court and in proceedings pending before the Court of

Justice, the national court must adjourn the national proceedings pending the outcome of those before the Court of Justice.

The Respondents

The State parties, with the notice parties in substantial agreement, contended, inter alia, that there is no requirement of community

law that requires a national court to stay proceedings because a point of law has been raised in those proceedings which is governed

by a determination of that point of law by the highest national court in earlier proceedings and on the other hand infringement

proceedings may be brought before the Court of Justice which might result in a decision on the same or similar issues. To do so, it

was submitted, would fundamentally undermine the application of community law by the national courts. As regards the Masterfoods

case it was submitted that this was peculiar to the field of competition law where the outcome of a dispute before the national court

depends upon the validity of the Commission decision. In that case the ECJ emphasised that “the principles governing the division of

powers between the Commission and the national courts and the application of community competition rules should be borne in mind”.

The Commission decision in the competition matter was a legally binding decision. The recent Opinion relied upon by the appellants is

not legally binding, its effect is limited to the role it plays as a procedural precondition to the entitlement of the Commission to

commence proceedings against a member state pursuant to Article 226.

So far as Article 10 was concerned it was submitted that if national proceedings were to be postponed because there was, pending

before the Court of Justice, proceedings on or related to the same issue then the functioning of the national courts would be

paralysed. The risk that the law may be subsequently declared to be different is a risk that every litigant in every type of legal

system is always exposed to. Cases must be disposed of on the basis of the law as it stands. Were cases to be continually stayed on

the basis of the possibility of a subsequent decision being inconsistent with existing law, the operation of the legal system would be

paralysed.

In any event it was submitted that the circumstances of these proceedings and their relationship with any potential proceedings

which may be brought by the Commission before the Court of Justice are not such as to give rise to the risk of any conflict of

decision. There could be no conflict of decision in this case within the meaning of that concept even if that notion were to be

transposed from the Masterfoods case to the circumstances of this case.

It was also submitted that the community legal system is premised on the interpretation, application and enforcement of community

law in the domestic courts and the mere possibility that the Court of Justice may, at some undefined point in the future, declare an

Irish legislative scheme to be incompatible with community law cannot prevent proceedings being heard and determined in accordance

with the law as it stands. An adjournment on the premise sought by the appellants in this case, particularly having regard to the

speculative nature of the grounds for adjournment would fail to ensure finality and certainty in the application of the law in this case.

It was also submitted that the mere fact that the infringement proceedings have been commenced can have no legal effect. The only

legal effect which infringement proceedings can have is that based on the final judgment of the Court of Justice.

Finally it was submitted that in deciding whether these proceedings should be adjourned the Court had to engage in a balancing

exercise and have regard to the adverse consequences which an adjournment and a stay on the proceedings would have for the

development project in question, development projects generally which could be affected by any such stay, the need for legal

certainty and a resolution of disputes and such risk, if any, to the interests or rights of the appellants.

Decision

The Court does not consider it necessary in ruling on this appeal from the refusal of a stay or adjournment to resolve the issues

between the parties as to the existence of a principle of community law which might require national proceedings to be stayed or

adjourned pending the outcome of other proceedings on the same issue before the Court of Justice, or the scope and ambit of any

such principle.

Therefore it is sufficient for present purposes to note that according to the appellants’ submission, put at its highest, the obligation of

a national court to stay proceedings arises if it appears to the Court that there is a substantial or material risk of a conflict of

decisions between the national court and the Court of Justice.

If that is the principle, the onus must be on the party applying for the adjournment to satisfy the Court that there is such a

substantial or material risk of a conflict.

In its Reasoned Opinions it appears that the Commission did raise issues concerning non transposition of the Directive which are the

same as some of those issues relied upon by the appellants in these proceedings.

Although it appears that not all of the Commission’s earlier concerns were pursued in the second Reasoned Opinion, the Court does

not have before it the Reasoned Opinions, in particular the second one, which played a role in the decision of the Commission to bring

proceedings.

Of greater importance is that the Court does not know the basis on which these proceedings will be brought by the Commission. The

decision was taken on 17th October 2007 and no proceedings have yet been commenced. Again the Court is prepared to accept, for

present purposes, and at this stage, that the Commission, having made a decision to bring proceedings, will as a matter of probability

commence such proceedings at some stage in the future, although it is difficult to speculate as to when that will be. It remains of

course at least a possibility that the Commission may decide not to pursue this course of action.

Among the considerations which a Court ought to take into account in deciding an issue of this nature is the legal basis on which

each of the proceedings, which it is alleged could lead to a conflicting decision, has been brought so that the actual issues of law can

be identified. This should be an essential element in determining whether there is a substantial risk of a conflict in the decisions.

Furthermore, while it would be no function of this Court to review the decision of the Commission as such, it could at least be material

to examine any interpretative view of Irish law on which the decision was based in evaluating any potential risk of a conflict of

decisions.

It is somewhat remarkable that so long after a decision was taken to bring proceedings against Ireland that no such proceedings have

been commenced. If the proceedings had been commenced the Court would have had knowledge of the legal basis, as finally

formulated, of any such proceedings. Without such knowledge it is difficult, if not impossible, to form a considered view as to what

issues relating to Irish law and the Directive will in fact arise in such proceedings.

The Court must also take into account the fact that these proceedings commenced in 2005 and it is in the general interest of the

administration of justice both at national and community level, that proceedings are heard and determined with reasonable expedition.

These proceedings concern not only the rights of the appellants but also the rights of the respondents and notice parties.

Furthermore, in each set of proceedings there are a number of substantive grounds challenging the validity of the respective decisions

of the Board and the EPA other than those concerning the transposition of the Directive. It may well be that these proceedings can

be decided and finally determined, perhaps in favour of the appellants, independent of any issue concerning the transposition of the

Directive. Of course the Court cannot comment on the merits of any of the issues as raised in these proceedings and to anticipate

the outcome of the proceedings in one form or another would be entirely speculative.

The problem is that the Court is being placed in a position where it is rather a matter of speculation as to what extent the

proceedings that the Commission say they will bring could result in the conflict of decisions of which the appellants argue is a real

risk. Indeed the appellants’ proposition that there is a real risk of a conflict of decision is not only based on certain assumptions as to

the legal basis of future proceedings but also on the speculation that the Commission would be successful. On the other hand it is

based on the assumption that the litigation before the High Court will necessarily involve a decision on the transposition issue.

Without going into the merits of the case it is difficult to have a considered view on that.

Moreover, since a significant amount of time has elapsed since the decision was taken by the Commission without any proceedings,

having been brought the Court has no knowledge and no way of knowing when proceedings will actually be commenced.

There is also a degree of speculation in the appellants’ contention that they would be deprived of any remedy should it transpire that

in these proceedings that the consent granted to the project to proceed were to be found valid in circumstances where the Court of

Justice found the transposition of the Directive to be inadequate. Apart from the assumptions as to the outcome of the proceedings

and whatever legal basis there might be for such a finding, it cannot be said with confidence that there would not be any benefits or

remedy for the appellants arising from such a finding depending when a final decision was given by the Court of Justice. That again

would obviously depend not only on the outcome of proceedings before the Court of Justice but perhaps also its timing.

Given that no proceedings have been commenced by the Commission and that it is not nown when, assuming that they will

eventually, be commenced there is a risk of a denial of justice to the respondents and the notice parties if this case were adjourned

without any knowledge or even perception as to when the proceedings might eventually commence and, consequently, when they

might conclude.

In all the circumstances the Court is satisfied, that the criteria advanced by the appellants, namely the substantial risk of a conflict

of decisions, (within the terms which they have argued) has not been established and therefore will dismiss the appeal against the

refusal to grant a stay or adjournment.

To adjourn these proceedings effectively sine die pending the outcome of as yet non existent proceedings could deprive the

respondents and/or the notice parties of any effective protection for any rights which they might be found to have.

The foregoing reasons for upholding the decision to refuse an adjournment are not exhaustive of the grounds upon which it might be

refused. This being an appeal in an interlocutory matter the Court considers it sufficient to decide it on the above grounds.

The Court also has a general discretion under national law to grant an adjournment of proceedings for any reason should the interests

of justice to one or more of the parties so require. These proceedings are of long standing, the parties are ready to proceed and deal

with the issues at a trial and the Court is satisfied that the interests of justice for the parties would not be satisfied if this case were

adjourned pending the outcome of other potential proceedings.

Accordingly the appeal is dismissed.