Supreme Court allows appeal, holding CAO designation invalid due to lack of statutory authority for universities to administer applications.

THE SUPREME COURT

Record No. 040 and 415/2009

Hardiman J.

Fennelly J.

Finnegan J.

Between:

CENTRAL APPLICATIONS OFFICE LIMITED

Plaintiff/Appellant

-and-

THE MINISTER FOR COMMUNITY, RURAL AND GAELTACHT AFFAIRS, IRELAND AND THE ATTORNEY GENERAL

Defendants/Respondents

JUDGMENT of Mr. Justice Fennelly delivered the 13th day of May 2010.

1. The CAO needs no introduction to the present generation of school-leavers or their parents. Since 1976 it has enabled

our institutions of third-level learning to reconcile annually the choices of the hopefuls—more than 60,000 last year—

seeking to embark on a chosen career path.

2. The legal issue on this appeal is whether the Central Applications Office Limited, the appellant, (hereinafter “the CAO”)

was lawfully designated by the Respondent Minister (hereinafter “the Minister”) as a public body for the purposes of the

Official Languages Act, 2003 (the “Act of 2003”) and thus subject to a number of obligations imposed or potentially

imposed by Part 3 of the Act concerning the conduct of its affairs in both official languages.

3. The Minister designated the CAO as a public body for the purposes of the Act of 2003 by the Official Languages Act

2003 (Public Body) Regulations, 2006, S.I. No. 150 of 2006 (hereinafter “the 2006 Regulations”). The CAO claimed in High

Court proceedings that this designation was ultra vires the Minister’s powers under the Act of 2003. MacMenamin J, in his

judgment of 14th October 2008, held that the designation was within the power of the Minister under one provision of the

Act (paragraph 1(5)(d) of the First Schedule), while rejecting the Minister’s reliance on a different provision. The CAO has

appealed to this Court against the decision holding the designation to have been validly made. The Minister has served a

Notice to Vary the judgment insofar as it held that the Minister was not empowered to make such a designation under the

provisions of paragraph 1(5)(c) of the First Schedule.

4. The general purpose of the Act of 2003, as proclaimed in its long title is “to promote the use of the Irish language for

official purposes in the State” and, more specifically, "to provide for the use of both official languages of the state…………

in communicating with or providing services to the public and in carrying out the work of public bodies…………”

5. The Act of 2003 was enacted in both official languages of the State. In such a case, by virtue of Article 25, section

4.6 of the Constitution, “the text in the national language shall prevail” where there is “conflict between the texts…”

6. Part 3 of the Act provides for a range of means by which public bodies, as defined, are to meet the statutory

objectives. Section 10, for example, lists a number of documents such as annual reports, policy documents and otherwise

which must be published "in each of the official languages simultaneously…” Sections 9, 11 and 13 provide for the

adoption of regulations by the Minister or the preparation of schemes by public bodies. It is only fair to say that the CAO

maintains that it already conducts significant parts of its business in the Irish language. For present purposes, it suffices

that it has the standing in law to maintain the present claim. The only issue is whether it is a public body for the purposes

of the legislation. To that end, it is appropriate to summarise the provisions which have led it to be so designated as to

bring it within the scope of Part 3.

7. The term “public body”, by virtue of section 2, “is to be construed in accordance with the First Schedule.” Paragraph 1

of that schedule commences: “Each of the following shall be a public body for the purposes of this act…” Paragraph 1

then comprises five subparagraphs listing or defining public bodies. Subparagraph 1 lists all government departments and

offices. Subparagraph 2 comprises a list of more than two hundred named agencies, boards, state companies (commercial

and non-commercial). Paragraph 3 refers to "a local authority;” paragraph 4 refers to "a health board." Subparagraph 5 is

in issue in this case and should be quoted in its entirety. It refers to:

“any body, organisation or group standing prescribed for the time being, with the consent of such other (if any)

Minister of the Government as the Minister considers appropriate having regard to the functions of that other

Minister of the Government, and being—

(a) a body, organisation or group that receives moneys directly from a Minister of the Government, a Department

of State, the Central Fund or a public body specified in subparagraph (2), (3) or (4) of this paragraph in

circumstances where the amount or aggregate of the amounts so received constitutes 50 per cent or more of the

current expenditure of that body, organisation or group in a financial year,

(b) a body, organisation or group that at the date of the coming into operation of this Schedule is a public body

but subsequently comes under private ownership and control,

(c) a body, organisation or group performing functions which previously stood vested in a body, organization or

group under public ownership or control, or

(d) any other body, organisation or group on which functions in relation to the general public or a class of the

general public stand conferred or permitted by any enactment or by any licence or authority given under any

enactment.

8. The term “functions” occurs in both subparagraphs (c) and (d). Section 2(1) provides that the word “includes powers

and duties.”

9. The Minister justifies the designation of the CAO by reference to paragraphs (c) and (d). Section 4(1) of the Act

provides:

“The Minister may, with the consent of the Minister for Finance –

a) by regulations provide, subject to the provisions of this Act, for any matter referred to in this Act as prescribed

or to be prescribed,”

10. In the purported exercise of this power, the Minister adopted the Regulations, i.e. S.I. 150 of 2006 prescribing a

number of bodies including the CAO for the purposes of subparagraph 1(5) of the First Schedule.

11. MacMenamin J analysed the texts of the Act of 2003 in both official languages. He noted that “the Irish text must

take precedence,” but added: “In the event that there might be an apparent conflict or inconsistency of meaning

between the two texts, a Court must seek to reconcile the Irish and English versions, giving precedence to the Irish

text.” He found no conflict, with one possible exception.

12. The learned trial judge heard evidence regarding the founding, constitution and activity of the CAO. It is a company

limited by guarantee and is a non-profit body. It was formed in 1976 and is based in Galway. Normally it employs ten

people, but this increases at peak examination times. Its function is to receive and to process applications from school-

leavers for admission to third level colleges and institutions. Its revenue is almost entirely derived from the fees paid by

students. It receives no funds from the State, though it was provided with a small amount of seed capital (long since

repaid) at its establishment. The State has no responsibility for its operation. The members of the CAO are the third-level

institutions which it serves.

13. Prior to the establishment of the CAO in 1976, there was no centralised system for processing applications from

students seeking admission to third level. Each student applied directly to chosen universities or other schools. As

numbers seeking admission to education at third level increased, significant problems emerged. Most particularly, students

might be offered and have accepted places in more than one university. When such a student that took up a place in one

college without notifying the other, the latter would often learn after the start of the academic year, that it had unfilled

places.

14. The universities then consisting of the constituent colleges of the National University of Ireland at Dublin, Galway,

Cork and Maynooth, together with Trinity College, Dublin, decided to form a single body to process applications. The CAO

now has 44 participant Higher Education Institutions, many of them regional technical colleges.

15. The process by which the CAO matches applications (from students) and offers (from institutions) is as follows. Each

student makes a single application to the CAO early in the year. The student specifies, in order of preference, the

preferred colleges and courses of study. Each institution decides on the number of places it will offer in each category

and informs the CAO. The CAO relates the student’s application with his leaving-certificate results. It then makes an offer

to the student on a form described as “offer notice” which specifies the course being offered and the institution offering

it. It invites the student to return a part of the form specifying acceptance. In addition, the form states: “A HEI [Higher

Education Institution] making an offer of a place will send a separate communication to you containing an account for

fees and details of registration.”

16. Based on this evidence, the learned trial judge made the following important finding of fact:

“The Central Admissions Office does not itself admit candidates to any university or other third level institution. Its

function is to process the initial offers, as instructed by the higher education institutions. The clear evidence in

this case was that the function of admission by such institution was reserved to itself. I find the C.A.O. is

therefore, essentially a service provider relating to applications only. It provides a process of determining

applications in accordance with identified criteria, but now on a centralised basis, in accordance with place

availability and point attainment.”

17. He summarised the general nature of the service provided by the CAO as follows:

“1) the C.A.O. functions in a single location;

2) it engages in one single placement application procedure for all candidates;

3) it deals with applications only and not admissions;

4) it processes examination results in accordance with grades and points;

5) it allocates places in higher educational institutions in accordance with points attainment;

6) it is a private company.”

18. The learned trial judge considered whether the Minister had validly designated the CAO as a public body pursuant to

either subparagraph (c) or (d) of paragraph 1(5) of the First Schedule.

19. For the purposes of subparagraph (c), the learned judge concluded that the CAO was not “performing functions

which previously stood vested in a body, organization or group under public ownership or control…” In the first instance,

he held that, prior to 1976 each of the individual universities separately processed and admitted students. This function

was performed by each educational institution for its own purposes. He continued:

“But in 1976, I consider the function, of processing applications and admitting students, were separated, the first

thereafter effected by the C.A.O.; the latter reserved to the higher educational institutions themselves.”

20. He found that the “essential function” carried on by the CAO “was and is, the regulation, administration, organising or

processing of applications in courses in all the universities ...” He described this as being performed in “a distinct and far

more complex way than by the universities” and concluded: “The difference is one of essence not of degree.” Hence, he

held, the function carried out by the CAO was a new one and had never "stood vested" in the universities. In this

respect, the learned trial judge drew attention to the Irish text of the Act, which uses the phrase “dílsithe le dlí”. This, he

held, “connotes not simply “established” or “secured” but vested by law.” Finally, following a detailed comparison of the

Irish and English texts, he concluded that the universities, prior to 1976, were not “under public ownership or control…”

21. Consequently, the learned judge held that the 2006 Regulations in designating the CAO could not be justified by

reference to the Minister’s power under subparagraph (c).

22. Turning to the language of subparagraph (d), the learned judge held that the CAO performs functions in relation to

the general public or a class of the general public. He identified the true question as being “no……whether the C.A.O. is

the subject of enactment, licence or authority but whether its functions are so subject, or whether they are so

permitted.” He stated that universities were permitted by statute to “create subsidiary companies which deal with one of

their functions, that is to say the administration of applications and admissions.” He referred to Paragraph 14 of the

Second Schedule to the Regional Technical Colleges Act 1992, which deals with the power of admission of students into a

college. He concluded that “the functions of the C.A.O. are statutorily encompassed…” The learned judge referred, inter-

alia, to the bodies listed in subparagraph 1, not all of which are in state ownership and emphasised that what was at

issue was not the corporate structure of the CAO but the exercise of its functions. He then said:

“There is no “grey area” here between permission and prohibition. The logical conclusion of the plaintiff’s case here

is that the C.A.O. is now exercising functions which are not permitted by any authority given under any

enactment. I do not think this is a tenable position. It is not justified by any statutory prohibition to which I have

been referred. To the contrary there is a permission for such functions as outlined in the statutes.

“I find that the plaintiff comes within the category of any other body on which functions in relation to a class of

the general public stand permitted by the enactment relating to such institutions or by an authority given under

those enactments. It has never been suggested the “functions” are unauthorised. The issue is not whether the

C.A.O. itself is permitted under any enactment but whether that body is permitted to exercise powers and duties

by virtue of an implied or express authority under an enactment.”

The appeal

23. The CAO takes issue with the reasoning of the learned trial judge in equating the requirement for the function of the

CAO to be permitted or authorised by an enactment with the absence of a prohibition. It is accepted that the CAO is a

body which performs functions related to a class of the general public. It does not, however, operate by or under a

statute or by virtue of any licence, or other administrative decision taken pursuant to statutory power. It is entirely

governed by private law. The learned judge was mistaken in referring to the Universities Act 1997, which was not in force

in 1976 and could not have been the authority which enabled the universities to join together to set up the CAO. The

power of the universities to determine the admission of students does not depend upon or derive from statute. That is

either an inherent or an implied power. Subparagraph (d) was designed to permit the designation of entities which

themselves performed functions in relation to the general public which are either conferred or permitted by statute or by a

licence or authority given under statute.

24. The Minister supports the High Court decision with regard to subparagraph (d) for the reasons set out in detail in the

judgment. The CAO was established by the universities and other third level institutions which themselves were conferred

with powers or permitted to exercise powers relating to admission of undergraduate students by statute. The Minister

relies on sections 13 of the Universities Act, 1997 and, in particular the power conferred by section 13(1) of that Act to

“do all things necessary or expedient in…… to further [its] objects and development of the university.” He also cites

paragraph 14 of the Second Schedule to the Regional Technical Colleges Act 1992.

25. The Minister seeks to vary the judgment in respect of subparagraph (c), which he advances as a second source of

legal power. The Minister contests, in particular, the finding of the High Court that the function performed by the CAO

after 1976 was a new one. Its functions had been carried out previously by individual universities and institutions, even if

by using different methods. The essential function of the CAO is the same as that which was carried out by the

universities. Furthermore, it is submitted that the learned judge, while right to refer to the phrase ‘dílsithe le dlí,’

misinterpreted its effect. He was wrong to hold that the particular function needed to have been vested in the

universities by law. They are vested by law with functions which imply a power to process applications. Finally, it is said

that the learned judge was incorrect in holding that there was not a sufficient measure or degree of public control for the

purposes of subparagraph (c): there is a measure or degree of public control over these bodies; he provision does not

require absolute public control.

Consideration of the appeal

26. Normally, the appellant’s case should be considered first and the notice to vary would arise only if the appeal

succeeded. However, I propose to consider paragraphs (c) and (d) in that order, as it follows the logic of the High Court

judgment which contains key findings of fact under the first heading, which are relevant to the second.

27. Subparagraph (c) empowers the Minister to prescribe a body as a public body if it is:

“a body, organisation or group performing functions which previously stood vested in a body, organization or group

under public ownership or control…”

28. The learned trial judge ruled against the Minister in his reliance on this provision for three reasons:

1. the functions performed by the CAO were not previously performed by the universities before 1976 when the CAO

was formed;

2. they were not, in any event, “vested” in them: “dílsithe le dlí,” being the Irish and prevailing text;

3. the universities are not, in any event under public ownership or control.

29. If the learned trial judge was correct in any of these respects, the Minister fails in his attempt to vary the judgment.

30. The learned trial judge examined the evidence regarding the functions performed by the CAO since 1976, on the one

hand, and the universities before that, on the other hand. The crucial finding of fact, in this respect, was that, after the

establishment of the CAO, the functions of processing applications and admitting students, previously carried out by the

universities as part of one process, were separated. The first was thereafter effected by the CAO; the second was

reserved to the higher educational institutions themselves.

31. I am satisfied that this conclusion of fact was warranted by the evidence. The universities and other institutions offer

places; the CAO does not. It is true that the “offer notice” emanates from the CAO, but it is clear that that body is doing

no more than communicating to the student an offer which the relevant university or other institution authorises the CAO

to make. The CAO plays no role of any kind in deciding what types of academic courses will be provided by those

institutions or how many places it will make available. The notes on the offer document refer at two points to the higher

education institution “offering a place” or “making an offer of a place.” It follows from all this that the function of

admitting students, including the offering of a place, is performed, not by the CAO, but by the relevant higher education

institution.

32. Once it is clear that it is the higher education institution that offers the place, it follows that the CAO is not

performing that function as formerly performed by the universities or others. What remains is that it receives and

processes the applications and sorts them out as between offering institutions. The latter function was, of course, not

performed at all prior to the establishment of the CAO. What finally remains and is performed by the CAO is the essentially

mechanical act of receiving and sorting applications. This is such a minimal act as scarcely to warrant the description of

“function.” It is performed for the entire country by a staff of ten. I would uphold the finding of the learned trial judge

that the functions performed by the CAO, however, described were not previously vested in the universities.

33. In addition, I am in complete agreement with the learned trial judge in holding, as an alternative, that the function of

processing applications was not “vested” in the universities prior to their being delegated to the CAO. Even in English, the

word “vested” connotes some degree of legal solemnity. The learned trial judge cited the definition, “established, secured,

or settled in the hands of, or definitely assigned to a certain possessor; esp. with right or interest,” from the Shorter

Oxford English Dictionary, (3rd Ed.). However, the matter was put beyond doubt by the phrase in the Irish text, “dílsithe

le dlí”. This, as the judge said, connotes not simply “established” or “secured” but vested by law. The function of

processing applications was never vested by law in the universities. It was a function which they had the power to

perform merely because of their nature: they were universities and they ran courses of study, for which naturally they

received applications.

34. Since these two points make it sufficiently clear that subparagraph (c) was not available to the Minister for the

purpose of prescribing the CAO as a public body, it is unnecessary to consider whether the various institutions of higher

education are also in public ownership or control.

35. I turn, therefore to subparagraph (d), which it is necessary to quote once more. The Minister may prescribe as a

public body:

“…any other body, organisation or group on which functions in relation to the general public or a class of the

general public stand conferred or permitted by any enactment or by any licence or authority given under any

enactment.”

36. It is accepted that the CAO provides services in relation to the general public or a class of the general public. The

function of receiving applications from students falls well within that description. The question at issue relates rather to

the legal source of that function, which, it will be recalled, includes “power or duty.” The immediate source of its legal

power to perform the function is located in its memorandum and articles of association in the following terms:-

“to establish carry on and manage and maintain an establishment or organisation in Ireland for the purpose of

regulating, administration, organising or otherwise processing in any manner whatsoever applications for admission

to courses to all universities, colleges of education, higher technological institutes, teaching colleges and other

institutions offering third level education and to carry on in cooperation with all or any of such institutions, all or

any administrative procedures to facilitate the admission of students to such institutions in any manner

whatsoever.” (emphasis added.)

37. However, the memorandum and articles are not an enactment and the question at issue is whether the power to

perform the function can be linked with an enactment in any of the ways envisaged by subparagraph (d). Firstly, it is not

suggested, nor could it be, that the function “stands conferred or permitted” on the CAO itself by any enactment. Thus,

none of the words as far as “enactment” on the third line are relevant. I pause, however, to observe that the use of the

word “permitted” is unusual to say the least. Counsel was unable, at the hearing, to point to any other example of a

statutory power being conferred in this way. Indeed, if the word, “permitted,” is taken in isolation, one is left with the

ungrammatical formulation: “any …body……on which functions ……stand conferred or permitted…by any enactment…”

Conversion of the passive into the active exposes the absurdity more clearly. One has to postulate an enactment: “which

permits functions on a body.” The learned trial judge described the wording of this provision, moderately, as “infelicitous.”

38. It would, of course, be pointless to pour scorn on the wording of the provision on merely grammatical grounds. It is

the fact that the words just described form an essential part of the wording linking the “functions” of the body under

consideration and the later part of the provision, upon which the Minister rests his case, i.e., the expression or “any

licence or authority given under any enactment.”

39. It has never been suggested that any question of a “licence” arises. The proposition for the Minister is, even if not so

expressed, that there is an authority “given under [an] enactment” which “confers or permits the function of receiving

and processing applications on (sic), meaning to be performed by, the CAO.”

40. There appear to be three components to this issue: the “function;” the “authority;” the “enactment” under which the

authority is given. The difficulties concern the second and third.

41. According to the learned trial judge, the “true question is not as to whether the C.A.O. is the subject of enactment,

licence or authority but whether its functions are so subject, or whether they are so permitted.” (emphasis added). He

is certainly correct to concentrate on the “functions” rather than the CAO as a corporation, though he seems not to have

followed this principle through consistently.

42. The learned judge examined section 13 of the Universities Act, 1997 and paragraph14 of the Second Schedule to the

Regional Technical Colleges Act 1992.

43. Section 13(1) states that the “ functions of the university are to do all things necessary or expedient in accordance

with this Act and its charter, if any, to further the objects and development of the university. Section 13(2) provides,

without limiting the generality of that provision, that a university:

“may establish by incorporation in the State or elsewhere, or participate in the establishment of, such trading,

research or other corporations as it thinks fit for the purpose of promoting or assisting, or in connection with the

functions of, the University…”

44. This provision persuaded the learned trial judge that “by logical extension, universities are undoubtedly permitted to

create subsidiary companies which deal with one of their functions, that is to say the administration of applications and

admissions.”

45. The Second Schedule to the Regional Technical Colleges Act provides, under paragraph 14, that the governing body

of such a college is to carry out all the functions assigned to it by the Act and, in particular, that it:

“shall determine subject to such directions as the Minister may give from time to time the conditions under which

persons should be admitted to the college and to any particular course of study therein.”

46. There are two difficulties about the reference to section 13 of the Universities Act. Firstly, it was not in force when

the CAO was formed and cannot, therefore, be the source of the authority granted to that body by its memorandum and

articles. It is not necessary, for the purposes of this judgment, to decide whether any or all of the universities must now

trace their establishment and origin to the Act of 1997. I note that section 7 provides that the constituent colleges of

the National University are thereby to "become and be universities.” Whatever the effect of that provision, the CAO was

formed in 1976; its formation, which is what is in issue on the present appeal, was not authorised by the Act of 1997.

Secondly, the judgment does not identify any enactment, such as is necessary under subparagraph (d), providing a power

for universities to administer applications. The learned trial judge appears to have assumed that it is sufficient that the

university, as a body, enjoys the power to admit students and that it is not necessary to point to any statutory provision

to that effect. As I will explain later, I do not interpret the provision in this way. Furthermore, the exercise of power to

incorporate a body such as the CAO is not the same thing as authorising it to perform a function.

47. The same question arises in a different way in respect of the Act of 1992. Paragraph 14 of the Second Schedule

undoubtedly authorises the Minister to give directions with regard to “the conditions under which persons shall be

admitted to the college and to any particular course of study therein…” However, as has already been pointed out, and

as the learned judge found as a matter of fact, the universities had reserved to themselves in 1976 the power to admit

students. Here is a corresponding express provision for the regional colleges. The learned judge was at pains to distinguish

the function of admitting students from the function of receiving and administering applications. Therefore, paragraph 14,

while it refers to the admission of students, has no bearing on the question of whether the Regional Technical Colleges,

governed by the Act of 1992, have authorised the CAO to receive applications on their behalf.

48. In my view, the Minister has been unable to identify any "enactment” under which any “authority [has been] given.”

The power of the Minister to prescribe bodies is dependent on the existence of both an enactment and an authority given

under the enactment. At one point, the learned judge appeared to apply a test of ultra vires to the universities and the

governing body of the CAO (see paragraph 22 above). The question is not whether the CAO or their member institutions

acted ultra vires. Whether or not the CAO was acting intra vires is not relevant to whether the Minister had power to

designate the CAO. The exercise of the Minister's power must be examined objectively by reference to subparagraph (d).

There must be an enactment creating or, at least referring to, the function in question and, as a separate matter, an

authority for the performance of that function by the body, organisation or group which is to be designated. The

Minister's case is based on essentially vague assertions regarding statutory power and authority. In my view, the 2006

Regulations were adopted in excess of the power of the Minister in so far as they designated the CAO as a public body for

the purposes of Act of 2003.

49. I would allow the appeal and grant a declaration to the foregoing effect. I would dismiss the notice to vary.